Natural Resources Committee on Feb. 17th, 2011

[Ted Lomond, Executive Director, Newfoundland and Labrador Regional Economic Development Association, Town of Bay Bulls]

The only thing I'd add is that there's obviously been a big change in the province over the last number of years. Earlier, Mr. Andrews asked what we could do to encourage exploration. Well, right now in Newfoundland and Labrador about 50% of our GDP is underpinned by geological work. About 11% of our GDP is coming from mining, and around 39% to 40% of our GDP is coming from oil and gas.

What we need to do is, as you say, to be able to create opportunities for young people. It's not just through training; it's through some of the other things we've mentioned. Training is great, but training and research are not just for the industry but for what comes after the industry. How do we diversify? How do we build on the skills that we've acquired in operating in harsh environments and lever those skills to use in other industries, whether it be fishing or whatnot?

We've got a project of 30 years or more. If we were to put in place a 30-year knowledge mobilization plan, the skills we could acquire could be a source of competitive advantage for years to come, as Mr. Mullowney said.

In the interests of time, I won't ramble on about that.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

That's interesting. It's great to see that potential being realized.

I want to talk to Mr. Staples a bit, and this has to do with the realization of the potential we're talking about. In talking about the number of person-years that are going to be required in Alberta over the next while, you mentioned about 4 million over 10 years. Do you have comments on the challenges to fill that workforce?

We've talked about this, and some of our other witnesses have, but you're talking a lot about other areas. What are the challenges to fill that? Maybe Newfoundland has some of that same challenge as well, if not Labrador.

[The Chair, Conservative, Leon Benoit]

Mr. Staples, go ahead.

[Larry Staples]

They're interrelated, certainly. The 2006 to 2008 period could be described as frantic in Alberta. We certainly had workforce challenges, and they constrained the rate at which we could build projects and bring them online and start creating wealth.

I think there's every expectation that we're headed in the same direction starting in late 2011 and into 2012. We're going to have to apply the lessons we learned and work hard to produce the projects and start bringing the wealth on stream.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Do you have the same challenges, Mr. Mullowney?

[Harold Mullowney]

I would echo that. I know right now that in Newfoundland and Labrador we have a number of megaprojects out there in the wings. I fear if they were all to come to fruition in a short period of time, we wouldn't know where we'd find the workers.

Most individuals who want to be working are working. There's a high level of skills that we require for some of these projects, and this is a mobile workforce that travels the planet, so if you wanted to start several of those projects at one time, the workers really are not there right now. That's a challenge.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

I have just one more question to wrap up.

We have had some witnesses in here who have suggested that it would be better if some resources weren't developed right now and that we should leave them in the ground. I pointed out that our province already tried that, and it didn't work very well.

I would like reflections from both of you on what you think your province would be today without the development of the natural resources they have chosen to develop.

[The Chair, Conservative, Leon Benoit]

By “both”, I suppose you mean Mr. Staples and Mayor Mullowney.

Go ahead, Mr. Staples.

[Larry Staples]

That is actually one of the charts in our reports. When you get the report, you will be able to look at one of the figures and track the total GDP in Alberta over time. There's a line where we have subtracted conventional oil, and another line where we have subtracted bitumen and unconventional sources. Then there's another line where we have subtracted all of the resource industries. Needless to say, that bottom line is about 40% of what it is now.

[The Chair, Conservative, Leon Benoit]

Go ahead, Mayor Mullowney.

[Harold Mullowney]

I would believe that without the spinoffs and the direct moneys from oil and gas development, our province would be in a very sad position indeed today. It has been a tremendous boon, a tremendous windfall. I always say that it could be much more. As my colleague Mr. Lomond said, we're probably looking at a 30-year window. We're well into it now.

Who's looking beyond 30 years? There are not too many people. I think we need to be really focused on the fact that we'll reach peak oil, and then it will start to drop off. We really need to look at the sustainable industries that sustained us for all those years leading up to oil. They still can be there and can be great drivers of our economy in the future, and now's the time to be at it. Now is the time to be developing and to be looking in those directions. There are lots of other resources out there that we have put on the back burner. The skill sets to even pursue some of them have disappeared.

We're missing a tremendous opportunity in enjoying this brief boom in cash.

[The Chair, Conservative, Leon Benoit]

Mr. Sorenson, you can have just a very short question.

[Kevin Sorenson, Conservative, Crowfoot, AB]

Thank you.

I do not usually sit on this committee. I chair public safety. I find this study quite fascinating.

First of all, I pass my sympathies on to you, Mr. Mullowney, on the loss of your brother. Certainly tragedies like that one lives with forever, and our sympathies go out to you.

I wanted to thank both Mr. Staples and Mr. Anderson for appearing. I'm an Alberta member of Parliament, and I thank you for the work done by you and other groups like yours, such as CAPP and other groups and organizations that are involved in advocacy.

Mr. Staples, a couple of times you mentioned bitumen. This maybe isn't part of the study they're presently doing, but if you're doing it on security of energy in Canada presently, what is your opinion as to the capacity for refining bitumen in Alberta and in Canada right now, compared to just shipping the bitumen down to the United States? Are we low in capacity? Do we need to increase that greatly? Is it a better model to have refineries than it is to ship?

Do you have an opinion on that?

[Larry Staples]

Certainly the best plan for Alberta and Canada is to add the most value we can to the resources before they're exported, but right now the economics of doing so are not in our favour. The Alberta government has certainly been promoting technology development to change those economics to allow us to add more value.

In the final analysis, the market will dictate that, but it depends on how clever Dr. Isaacs and the scientists in the Devon labs and the scientists in industry are in coming along with technology that makes it economical to add value in Canada. That has to be the goal.

[The Chair, Conservative, Leon Benoit]

I'm sorry, Mr. Sorenson, but our time is up. People have flights to catch.

I want to thank all members of the committee for a great discussion here today. I especially want to thank all members of the panel for your presentations and for your answers to the questions. Thank you very much for appearing. We appreciate it.

The meeting is adjourned.