Thank you very much to the chair of the committee for the invitation to present insights here and to the clerks and technological staff for their assistance.
I'm a professor at York University in Toronto. Over the past 20 years, my research has concerned the geopolitics of the oil industry, with extensive field research in oil-producing regions in Mexico, Nigeria and western Canada.
I'm originally from Alberta. I studied at the University of Alberta and subsequently at Cornell University in New York state, and I was a post-doc at the University of California, Berkeley, before assuming a full-time position at York University in 2007.
Over the last decade and a half, a significant part of my research has concerned Canadian investment in the restructured Mexican energy sector, a restructuring brought about by the 2013 constitutional reform in Mexico.
I presented at this committee in June 2024, at the end of the Mexican leg of a course on the CUSMA agreement, but the continental dynamics have clearly changed considerably in that one-and-a-half-year period, and some of the cautions I suggested then with regard to Mexican energy sovereignty now apply equally to Canada, if not more so. I think you heard some similar cautions from previous speakers.
Given the nature of the times, it is also essential, I think, to be far more explicit today than I was in my previous remarks, as the rule of law internationally and increasingly domestically in our southern neighbour, the United States, is withering away alongside diplomatic norms.
While then I recommended extending the rapid response mechanism and labour provisions of the CUSMA to Canada and the United States, I also suggested raising the bar on environmental protections across the three CUSMA borders, and I suggested changing practices to ensure that states like Canada were protected from litigation should they seek to implement more stringent climate policy. I also called for ridding the CUSMA agreement of the vestiges of investor-state arbitration as it applies to the Mexican energy sector and noted that the Coalition of Trade Ministers on Climate has called for similar measures.
Now, while I still would agree with these matters today, I frankly no longer see a rushed renegotiation of this agreement. Granted, at the time, I also had concerns, but I certainly do not now consider it to be in Canada's interest. As I imagine you know, on Friday, the United States scuttled the International Maritime Organization agreement aimed at reducing emissions in the shipping sector, and they did so reportedly in the most undiplomatic of forms.
Trump has implemented tariffs on Canadian goods under section 232, which I know you will have heard about from Unifor, and under the IEEPA. The latter had been formally struck down as illegal, as I imagine you know, in U.S. federal courts, and now Trump is appealing this to the Supreme Court. However, the section 232 tariffs have already had devastating consequences for Canadian jobs in the steel and automotive sectors.
Our government seems to be caving on all manner of issues to Trump's agenda, the most egregious ones including the border security bill, which may violate Canada's Charter of Rights and Freedoms, and the rescinding of the digital services tax, something [Technical difficulty—Editor] negotiating tactic in this CUSMA renegotiation.
I'm particularly concerned with the apparent closed-door negotiations on energy, including the Keystone XL pipeline, which a Toronto Star journalist recently described as the “zombie pipeline” that seems to be able to rise from the dead. The current government seems to be employing this a strategy to appease the U.S. President.
TC Energy, formerly TransCanada, has described itself for some years as the single largest Canadian investor in Mexico, but it has also established major offices in Houston, Texas, and two of its senior executives there, who I believe are married, have traded off positions as senior advisers to Trump in the first and now the second Trump presidencies.
TC Energy has built much of the infrastructure that has led to the reversal of Mexican energy sovereignty so that the country is now dependent on U.S. fracked gas to feed its electrical grid. The implications of this gas for the actual greening of emissions are dubious at best and have not been thoroughly studied.
Despite Trump calling out critically that Canada is a net exporter of energy to the United States, the Keystone XL pipeline may be welcomed because the U.S. gulf refineries have spare capacity to process Canadian bitumen and Mexican heavy oil, and transporting these fuels to the American oil heartland would boost American petrochemical jobs, use their fixed capital and retain value-added in the United States rather than allowing for the creation of Canadian jobs through processing these hydrocarbons at home. Canadian-Mexican hydrocarbon exports to the U.S. remain geostrategic for the U.S.
I'm a proponent of looking toward a future beyond oil and gas. Even if I were not, the construction of the Keystone XL pipeline or further pipelines connecting the United States to our energy grid reduces our national options for how to allocate our hydrocarbon resources. We must avoid any agreement around energy that involves Canada committing to either exporting more bitumen or importing hydrocarbons, notably fracked gas and shale oil, from the United States. Either of these would decrease our options to build non-hydrocarbon electricity systems and climate-friendly infrastructure, and our ability to create protected Canadian jobs in a modern green energy sector, which is something that other parts of the world are leading in.
Finally, given that this is the Standing Committee on International Trade, I feel compelled to comment that, as a member of the Jewish Faculty Network, I must state that it is incumbent on the committee to cancel the Canada-Israel Free Trade Agreement until Israel respects the civil rights of Palestinians as guaranteed under international law.
