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Evidence of meeting #24 for Natural Resources in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was pipeline.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Christopher Smillie  Senior Advisor, Government Relations, Building and Construction Trades Department, AFL-CIO, Canadian Office
Larry Hughes  Electrical and Computer Engineering, Dalhousie University, As an Individual
Jack Mintz  Palmer Chair in Public Policy, School of Public Policy, University of Calgary, As an Individual
Michal Moore  School of Public Policy and ISEE Core Faculty, University of Calgary, As an Individual
Brenda Kenny  President and Chief Executive Officer, Canadian Energy Pipeline Association

9:40 a.m.

NDP

Claude Gravelle NDP Nickel Belt, ON

All right.

9:40 a.m.

Conservative

The Chair Conservative Leon Benoit

We go now to Mr. McGuinty, from the Liberal Party. You have up to seven minutes, please.

9:40 a.m.

Liberal

David McGuinty Liberal Ottawa South, ON

Thank you, Chair.

Mr. Mintz, I want to go back to your comments and your op ed in the newspaper some time ago about game theory. I'd like to ask you about your purported leverage with respect to game theory in the United States. Can you tell us where your leverage begins and ends with respect to our obligations under NAFTA and North American energy security?

9:40 a.m.

Palmer Chair in Public Policy, School of Public Policy, University of Calgary, As an Individual

Jack Mintz

First of all, we do have an agreement on NAFTA on the use of energy in terms of trying to, let's say, withhold it from the United States but still provide it in Canada. There are limitations on that. But I think the idea of trying to expand our markets is not something that would violate NAFTA at all. In fact, we do it in a lot of our industries that are under NAFTA. The idea is to really try to take advantage of the economic returns we can get from alternative exports.

9:45 a.m.

Liberal

David McGuinty Liberal Ottawa South, ON

So if we're obliged to supply energy in a North American context, what leverage do we actually have with the United States?

9:45 a.m.

Palmer Chair in Public Policy, School of Public Policy, University of Calgary, As an Individual

Jack Mintz

I think we have to remember what the economic gains are of our current exports to the United States. We do have an infrastructure of pipelines that go down to the United States. We also have refining capacity in the United States that demands our bitumen exports from Alberta and from the Bakken region as well, in certain areas. We also have, I think, opportunities for our exports to take advantage of the U.S. market. But that doesn't mean we shut down our pipelines going to the U.S. in order to expand alternatives elsewhere. What it means is that in terms of our growth—which is going to be quite exceptional over the next several years as our oil production and its availability for export increases quite dramatically—we should look at alternative markets as well.

9:45 a.m.

Liberal

David McGuinty Liberal Ottawa South, ON

Mr. Mintz, as an economist, do you believe that Canada should move to put a price on carbon emissions?

9:45 a.m.

Palmer Chair in Public Policy, School of Public Policy, University of Calgary, As an Individual

Jack Mintz

As you know, Mr. McGuinty, I've always been in favour of putting some price on carbon. In fact, in the past I have proposed, with Nancy Olewiler, carbon taxation. I think it's a better system than a cap and trade system, although with that I know there is a large amount of discussion and debate even among experts about the choices between the two. But if one is going to price carbon, I do see value to putting in a regime that would be a carbon tax, rather than trying to use ad hoc rules and regulations to try to deal with, let's say, carbon-reducing issues.

9:45 a.m.

Liberal

David McGuinty Liberal Ottawa South, ON

As a researcher and economist—a chair at the University of Calgary—you're presumably tracking the trends nationally. Have you seen anything at all from the government with respect to, for example, a follow-up on the Prime Minister's promise in 2008 to price carbon at $65 a tonne by 2018?

9:45 a.m.

Palmer Chair in Public Policy, School of Public Policy, University of Calgary, As an Individual

Jack Mintz

I think what's happening now is the choice the government is making with respect to the regulatory route. That is their choice in terms of how they want to deal with carbon reduction. I have a different view on how I think it should be done, but these are the kinds of issues that I think are important to debate concerning what people feel is most effective and most politically saleable.

9:45 a.m.

Liberal

David McGuinty Liberal Ottawa South, ON

I'll take that as a no.

Can I ask you a third question, Mr. Mintz? As an economist, can you tell us what ethical oil is?

9:45 a.m.

Palmer Chair in Public Policy, School of Public Policy, University of Calgary, As an Individual

Jack Mintz

I'm not sure economists are very good at answering questions about ethical oil in the sense that that's sometimes a value judgment.

9:45 a.m.

Liberal

David McGuinty Liberal Ottawa South, ON

You've been talking about geopolitics most of the morning in your testimony, so let's go through the door. When people talk about ethical oil, what does that mean?

9:45 a.m.

Palmer Chair in Public Policy, School of Public Policy, University of Calgary, As an Individual

Jack Mintz

I think that some people view ethical oil in terms of where it comes from—from regimes that, let's say, are totalitarian and lacking appropriate human rights. Other people might discuss ethical oil in terms of environmental objectives, which is another set of issues. If I were to try to put a brand on it, and frankly, I haven't gotten into this discussion at all, I would look at the overall issues related to the choice of production of different energy sources.

Frankly, that's why I began with my point at the beginning of the presentation with respect to three objectives. In my view, I don't get particularly interested in discussing what's ethical or not ethical in our choices of energy sources. I like to go back to the main issues, things like efficiency, environmental stewardship, and, in the case of pipelines, I like to talk about diversification.

9:45 a.m.

Liberal

David McGuinty Liberal Ottawa South, ON

So as an economist, using your three principles of market efficiency, environmental stewardship, and market diversification as fundamental to our energy discussion, you don't factor in a value on so-called ethical oil?

9:45 a.m.

Palmer Chair in Public Policy, School of Public Policy, University of Calgary, As an Individual

Jack Mintz

Obviously I've not included that.

9:45 a.m.

Liberal

David McGuinty Liberal Ottawa South, ON

Okay.

What's my time like?

9:45 a.m.

Conservative

The Chair Conservative Leon Benoit

You have a minute.

9:45 a.m.

Liberal

David McGuinty Liberal Ottawa South, ON

I'll go to Mr. Smillie.

Has the group you represent, the Building and Construction Trades, done a national assessment of the employment potential for the renewable sector?

9:50 a.m.

Senior Advisor, Government Relations, Building and Construction Trades Department, AFL-CIO, Canadian Office

Christopher Smillie

The national assessment we rely on would be the stuff that came out from CIRI. We haven't done a membership survey or an analysis per se. Based on past experience, we can estimate the number of person hours that would be associated in the renewables section.

It works out to approximately 30% of our person hours per year. So using logic, we can expect that if these pipelines are to be built and if Alberta is set to expand at the rate it is supposed to, the growth in person hours would grow exponentially with those opportunities.

The math is tough, but the logic is easy.

9:50 a.m.

Conservative

The Chair Conservative Leon Benoit

Thank you, Mr. McGuinty.

Mr. Calkins, go ahead for up to five minutes, please.

February 7th, 2012 / 9:50 a.m.

Conservative

Blaine Calkins Conservative Wetaskiwin, AB

Thank you, Mr. Chair.

I am one of those westerners who get a little bit nervous when people start talking about energy programs, so I appreciate the retraction there, Mr. Smillie. It is something that is quite concerning. However, I think there is a broad consensus throughout industry, government, and so on that we have to take a look at how we can best address issues going forward in the long term.

I'm not going to preface any of my questions by talking about a national energy strategy. I'll let those involved in the industry focus more on that.

I do want to ask a question of Ms. Kenny, though. I am actually quite concerned, and I want to understand the history of this. You're saying that the line 9 pipeline has already been reversed once. Is that correct?

9:50 a.m.

President and Chief Executive Officer, Canadian Energy Pipeline Association

Brenda Kenny

That's correct. It was built to flow Canadian crude oil from the west to the east in the late 1970s, and it was reversed once to go east to west. Now the desire is to go again from west to east.

9:50 a.m.

Conservative

Blaine Calkins Conservative Wetaskiwin, AB

For the first reversal, did the National Energy Board have public hearings?

9:50 a.m.

President and Chief Executive Officer, Canadian Energy Pipeline Association

Brenda Kenny

They did have public hearings. In fact, at the time, Mr. Calkins, I was working at the National Energy Board, and I remember those well. The primary focus at the time was actually related to markets and tolling, because this was a line that had been operating, frankly, with a federal subsidy for 20 years, in that its original purpose was geopolitical safeguarding.