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

10:40 a.m.

Prof. Michal Moore

The price differential we can capture certainly impacts not only the ultimate royalty regime, because it's a reflection of how much you can ship, but tax revenues. We conclude that the differential represents several hundred billion dollars over a 20- to 30-year period that's available to government.

It is being able to reach what amounts to a tidewater access pricing point. It's important to differentiate between where our products actually go versus where they're priced. Right now, some of the knock on the Keystone pipeline, which is coming from various sectors in the U.S., suggests that all we're trying to do is export to foreign markets. That's silly. Where we have an advantage is in getting into the U.S. gulf coast, where our products can be processed and then transformed into gasoline and other distillates, and reaching out to a U.S. market. When we can do that, we get a higher world price, and that translates directly back into tax revenues and royalties that are significant, literally, for every province in Canada.

10:40 a.m.


The Chair Conservative Leon Benoit

Thank you.

Thank you, Mr. Calkins.

We go now to Mr. Gravelle for a couple of minutes.

10:40 a.m.


Claude Gravelle NDP Nickel Belt, ON

All right. Thank you very much.

My question is for Mr. Hughes.

Mr. Hughes, I'm going to quote Robyn Allan, the former president and CEO of the Insurance Corporation of British Columbia. She said:

“Northern Gateway is neither needed nor is in the public interest.” Moreover the project, if built, would raise the price of every oil barrel by $2 to $3 dollars in Canada over the next 30 years, and thereby create an inflationary price shock that would have “a negative and prolonged impact...by reducing output, employment, labour income and government revenues.”

I'm getting a lot of calls in my office about the price of gas being too high. She's saying it's going to rise by $2 to $3 a barrel per year.

Also, there is a report out today from a Mr. Ervin, who is based in Calgary. He's saying the price of gas is going to rise by five to ten cents a litre over the summer. Can you comment on the price of gas going up that high?

10:45 a.m.

Prof. Larry Hughes

I'm not really in a strong position to comment.

It's just an observation. I'm not surprised at all, given the declining refining capacity and the growing world price of crude. I would agree with what has been said. The price increases are inevitable, whether it's directly because of the Northern Gateway or because of a natural evolution of world prices.

10:45 a.m.


The Chair Conservative Leon Benoit

Excuse me, Mr. Gravelle, but the bells are going and we have a vote, apparently.

Our time is up. I would like to thank all of the witnesses for some very helpful information today and all of the members of the committee for your questions and comments.

We look forward to our next meeting on this subject on Thursday.

The meeting is adjourned.