Natural Resources Committee on March 27th, 2012

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

Thank you, Mr. Chair.

Thank you, Mr. Minister, for presenting yourself here today.

You've stated that your intention is to gut the National Energy Board review process and eliminate public input on particular pipeline and mining projects. You call the process outdated, but it was chiefly designed to protect the rights of property owners.

Does this mean that property owners and first nations affected by these projects will have to resort to civil disobedience to save their lands from expropriation?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

That's quite a question, with a number of false assumptions.

We do not intend to gut the process. Quite to the contrary, we want to strengthen it and make sure that no project goes ahead if it isn't safe for Canadians and the environment. We will not be eliminating the role of the National Energy Board. The National Energy Board will continue to do comprehensive environmental reviews, as it has done before. We obviously respect the right of all Canadians, including property owners.

I think people should wait to see precisely what they're going to do. The fact that the proposals are criticized before people have even had a chance to see them is probably indicative of what they're going to say once they've seen them. Frankly, it undermines the credibility of critics to criticize them before.

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

So you're committing that the public will have a chance to comment on these changes you're proposing. We'll have a chance to review them at this committee, and then you'll be conducting widespread public consultation before you go ahead with changing the National Energy Board review process—or will you just go ahead and do it in the budget on Thursday?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

The proposed review will require legislative change; therefore, it will undergo the same sort of review that every other piece of legislation does.

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

But you've committed, in the papers anyway, to putting it in the budget on Thursday.

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Yes, it will be announced in the budget on Thursday. There will be legislation dealing with it subsequently.

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

Will that be buried in the budget bill, or will there be a separate process by which this change will be reviewed?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Nothing is buried in the budget bill. I have not seen the budget, but I'm told there will be a high-level discussion of this. Then, of course, there will be a detailed explanation when the legislation is brought forward.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Stewart.

We'll go now to Mr. McGuinty for up to seven minutes.

[David McGuinty, Liberal, Ottawa South, ON]

Thank you, Mr. Chair.

Thank you, Minister, for being here this morning.

I just want to pick up where my colleague left off. Before your election your government actually did bury, in a paragraph in budget bill 2010, changes to the Canadian Environmental Assessment Act. Are you now publicly committing to Canadians that there will be a separate legislative process where this committee, or the environment committee, or perhaps a special legislative committee, will be brought together to review the changes you're contemplating?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

This, as you know, Mr. McGuinty, is my first session, my first year, in Parliament. I haven't gone through this legislative process.

I can tell you there is discussion in the budget. There will be a rollout of the legislation such that everyone will understand precisely what is being proposed, and it will go through as all legislation does.

As for the specific details surrounding it, I'm not in a position to say at this point.

[David McGuinty, Liberal, Ottawa South, ON]

I appreciate that, Minister.

It would be important, though, just to note as the new minister, recently elected, that Canadians are a little skeptical. In 2010 the Supreme Court of Canada ruled against your government with respect to the Red Chris mine in northern B.C. Your government, to overcome the decision by the Supreme Court of Canada to uphold the way in which the Canadian Environmental Assessment Agency was doing its job, actually brought in legislation, through a budget bill, which was never properly debated and never sent to the appropriate committee.

Perhaps, going forward, it would be better for Canadians to have an opportunity, as my colleague suggested earlier, to have some input.

I want to turn, if I could, to theme number two, Mr. Minister. I want to talk about aboriginal participation. I don't know what you did or did not say in a speech, which was reported as quoting your having said that there are aboriginal communities that are socially dysfunctional. I don't know what you meant. I don't know what the context of those remarks were. I think they were perhaps intemperate remarks. But I want to talk to you about aboriginal participation.

You alluded earlier to the notion that there would be appropriate consultations and discussion. In your thinking about regulatory reform and perhaps creating the better environment for the exploitation of our massive natural resources, is your government contemplating equity participation by aboriginal communities?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

First of all, to your comments about what I said in the speech, I didn't say anything like that in the speech. There was a question period after and I was referring to the potentially transformative impact that resource development can have on aboriginal communities. I cited a visit that I had the privilege of participating in with the Prime Minister during his tour of the north, to Baker Lake, where the unemployment rate had decreased from 40% to 50% down to 2% as a result of a mine being opened in the area.

I said there are immense opportunities for communities that have been suffering from high unemployment for a very long period of time to extricate themselves from this situation through the employment opportunities, as well as cash payments and equity participation, which I gather is being offered right now by the sponsor of the Northern Gateway project. So I don't want to talk about that project beyond that, because it's under regulatory review.

But it is a fact, it's in the public record, that there is some billion dollars on the table for aboriginal communities, and therefore there are opportunities for these communities to really extricate themselves from, in some cases, long periods of high unemployment rates, which all of us decry.

We're living in Canada, a wealthy country, and we all want the very best for aboriginal communities. We see resource development as being potentially an extremely positive opportunity for these communities and for other Canadians as well.

[David McGuinty, Liberal, Ottawa South, ON]

Could I turn to theme number three now, Minister, because of the shortage of time? I want to talk to you about the Prime Minister's speech in 2008, when he delivered his first “Canada as energy superpower” speech in London, England.

At the time, Mr. Harper stood up and told the world that by 2016 Canada would be pricing carbon at $65 per tonne. Obviously, given your mandate in the natural resources sector, this is an important announcement. Can you tell us where you are with this? What is your thinking? Where is the government going? Will you be achieving a price of $65 per tonne in the next three to five years?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

You are obviously an historian, Mr. McGuinty, because you're confronting me with a lot of political history. I'm not aware of that, and won't comment on it directly.

In any case, it's a matter that falls under the responsibilities of the Minister of the Environment.

[David McGuinty, Liberal, Ottawa South, ON]

It does? Canada has a sustainable development act that binds your department. It binds the Prime Minister's office. It binds every line department and agency, board, and commission in the country. It was ratified by your government three years ago.

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Well, you know that we fought and won an election in part against carbon taxes. You understand what our government's position is on that.

[David McGuinty, Liberal, Ottawa South, ON]

So the government's position is that you will not be pricing carbon emissions.

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

The government's position is that we will not be imposing a carbon tax.

[David McGuinty, Liberal, Ottawa South, ON]

Are you bringing in a cap-and-trade system?

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. McGuinty. Your time is up.

We go back to the government side. This is a five-minute round now, starting with Mr. Calkins, please.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Thank you, Mr. Chair.

Thank you, Minister, for being here today. I certainly appreciate it.

As a member of Parliament from Alberta, I just want to publicly say thank you very much for some of the comments you've made in the House of Commons with respect to defending Alberta's natural resource sector. I would also like to thank you for bringing to Canadians' attention some of the issues pertaining to resource extraction and resource development.

I know, as an Albertan, how beneficial our natural resource sector is to not only our economy in Alberta but also the broader economy across our great country. My questioning will be along that line.

Minister, you made a comment in your opening speech here about the fact that our government wants to focus on creating jobs and economic opportunities, at the same time doing so in a responsible manner while streamlining the regulatory process.

Could you remind this committee of how many jobs we are looking at when it comes to Alberta's oil sands in particular? There are a number of sources for this information, but whether it's the Canadian Energy Research Institute or various other forecasting bodies, they all predict economic investment and the spinoff jobs that would be created by that.

Could you just remind us of what the current levels of jobs are in the Alberta oil sands? As well, what is the projected number of jobs and opportunities that would come from the projected investment that's coming down the road?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Thank you for the question.

The oil sands are, as I said, one of the most important economic engines in our country, and the largest energy project in the entire world. This resource has attracted more than $137 billion in capital investment—of that, more than $116 billion in the last ten years alone.

The oil sands are responsible for more than 400,000 jobs in Canada. These jobs are in every sector of the economy, in the skills trade, manufacturing, clerical, financial—everywhere.

Of course, as I said, they are a large source of revenue for governments at all levels. In fact, over the past five years the oil and gas extraction sector has added $22 billion a year to government revenues. That's $22 billion for governments to invest in things like education, health care, roads, bridges, cutting-edge research, and lower taxes for Canadian families. I talked about the 700,000 jobs, on average, over the next 25 years, assuming the oil sands proceed and are developed with all the accompanying infrastructure.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Let's talk about some of that accompanying infrastructure, then. As we know, and we have had witnesses before this committee who have testified, increasing the ability to export our products, whether it's to the United States through the Keystone pipeline, whether it's to the west coast through the Northern Gateway pipeline, or whether it's shipping it east in Canada through a change in how our pipelines are flowing.... For example, there are some pipelines that currently are flowing east to west rather than west to east in our country, particularly in eastern Canada.

Some of the issues pertaining to this, of course, have been political issues in the United States. We have domestic political issues here, and we have the regulatory review process, which, as you have eloquently articulated, is perhaps not as efficient and effective as it could be or needs to be.

The reality, Minister, is that Canada is an environmentally and socially responsible producer of energy, and we know that the world is looking for those energy opportunities. Our committee heard testimony from various economic witnesses about the fact that when the sole export market for Canada's oil is the United States, there is a lot of money left on the table.

Do you have any information, Minister, that you could share with us about the impacts of broadening our market opportunities to, say, the Asia Pacific gateway and through a potential pipeline that's being built to the west? What could that do for not only my province of Alberta but also for the federal government and all Canadians?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Let me answer that specific question first, and then I'll comment more broadly.

It's been estimated by the economist Jack Mintz, who did a study for the University of Calgary's public policy group, that the differential between the domestic price we're currently attracting for our oil in the United States and the international price would, over the next 25 years, result in a difference of $132 billion. So that much is at stake just in the price differential, to say nothing, of course, about the additional size of the market that diversification would bring to Canada.

We're really on the edge of a historic choice, which is to diversify our markets away from our traditional trading partner or to continue with the status quo. With the massive growth seen in the Asia Pacific, and the enormous demand for energy, it's very clear to our government what we should do.

I had the opportunity to go to China twice in the last several months, the second time with the Prime Minister. There's tremendous complementarity. We want to diversify our markets. China and other Asia Pacific economies want to diversify their sources of supply. There is a tremendous interest in all our resources, not just oil but also gas, particularly in Japan, and also minerals, throughout the area.

We have an enormous opportunity there, but it's highly competitive. If we don't move fairly quickly, others will enter into long-term contracts, and we could be disadvantaged in that regard. The market in the United States is simply not large enough for all of our resources.