Thank you, Mr. Chair.
Thank you to the panel members for putting these hearings on. I know it's no small imposition to do a cross-Canada listening and engagement tour, but I think it's very important when we talk about something as important as a trade agreement like this that would have a profound effect on all Canadians for many years into the future.
At CAPP we represent the upstream oil and gas producers in Canada. We don't represent pipelines or the downstream side, just the upstream side. That said, the ability to get our products to market is crucial to the ongoing success of not only our industry but also of many parts of the Canadian economy. With that principle in mind, we're very supportive of trade and free trade.
I'm going to highlight a few points where I think there will be a direct overlap with the Trans-Pacific Partnership and where it can enable Canada to be more competitive on specific parts of what we've seen of the agreement.
In a general sense, I did want to comment that some of our stakeholders we work with very closely are challenged and have put forward concerns that I think are legitimate and, certainly, need to be thoughtfully approached.
One concern would be the labour force. Our industry hires about 500,000 Canadians—today it's slightly less than that at 450,000—who are integral to the ongoing success of the oil and gas industry. At times, labour shortages are one of the biggest challenges facing our industry and labour mobility is something that we have and will continue to advocate for. I don't think it's one or the other. I think we need to ensure that even within Canada, we can make labour mobility a priority so that we can utilize Canadians as much as possible in any project that will go forward into the future.
I wanted to put on the table that there are a lot of aspects here that are certainly important.
If I shift to where I see the Trans-Pacific Partnership having direct impact on Canada's competitive position, one of the most obvious is diluent. In Canada we produce a lot of heavy oil or very heavy oil that requires diluent to dilute it so it can flow easily in pipelines. We don't produce enough diluent in Canada, so we have to import much of it. We do produce a substantial amount, but much of it is imported from the U.S. and from offshore. In any given year that could amount to about $40 million worth of tariffs, which decreases the economics of investing in Canada and, of course, affects the creation of Canadian jobs. If the TPP were to allow a freer flow of diluent, that would be very helpful.
Our industry is a technology leader. If you look at where oil and gas is produced around the world, Canada is out in front in almost every regard—in environmental standards and production techniques, and in many different ways. Our ability to export those high standards and new technologies around the world will have benefits around the world.
When we look at some of the challenges we're facing today in eastern Canada, we are seeing western Canadian gas being displaced by gas coming out of the U.S. In western Canada we have a carbon price on the gas produced in British Columbia on the compressor stations while the gas coming out of the eastern seaboard of the U.S. does not. I guess one approach would be to say that maybe we should have a tariff on gas coming into Canada that doesn't have the high environmental standards or the incentives to always be improving performance.
I think a better approach from our industry's point of view is that we make everybody better. If we can export our technology, not just to the U.S. but around the world, that will benefit countries that are also producing, and Canada can maintain its leadership position.
I also wanted to talk a little bit about the market access piece That is something we continue to work on, getting our products to those new markets around the world, be it natural gas and the LNG facilities, or oil through new pipeline infrastructure. I think the commitments that the governments have made on market access, both provincial and federal, are important and the Trans-Pacific Partnership would be a further reflection of that imperative of Canada's role in the world as an exporter of energy, of products, and of the resources that we produce.
In a general sense, I think that Canada can compete, that we will continue to be innovators, and that the Trans-Pacific Partnership will enable us to be competitive in this new world.
Thank you for your time today.