Natural Resources Committee on May 21st, 2013

[Joan Crockatt, Conservative, Calgary Centre, AB]

What would you say to Canadians who might be influenced by a vocal minority that is opposing pipelines? You've obviously given this a lot of thought.

[John Telford]

The first thing I'd tell them is that they probably don't know very much about a pipeline. Some of the problems we had in Michigan and some other places were because of 45-, 50-year-old pipelines. We're getting the absolute best pipe in the world now, the best welding procedures, the best detection systems. These things are going to be “safetied” like you wouldn't believe, and so they should be. If you put a brand new pipeline in the ground right now, you won't have any problem with it. There's going to be a time when there's going to be a problem with it. Time wears out things.

[Joan Crockatt, Conservative, Calgary Centre, AB]

I was intrigued by your comments about how we need our daughters to get interested, how we need youth, how we need aboriginals. I'm sure you're aware that they are some of our underemployed Canadians—

[John Telford]

Yes, for sure.

[Joan Crockatt, Conservative, Calgary Centre, AB]

—that we're trying to target. To tie us back to the study, do you think that international market access represents an opportunity for those underemployed groups in Canada?

[John Telford]

If we put an LNG and an oil transport at Kitimat, what's most of the population around Kitimat going to do? They're going to go to work. We've had what we consider a huge success in northern Alberta with natives and women in the trades. Five years ago, I probably wouldn't have had this position, but I've always supported women in the trades, and now I've seen women in the trades. They're coming to the trades now and are very efficient, very good workers, the same as everybody else. They just want to make a living. There's a terrific living to be made in the skilled trades.

[The Chair, Conservative, Leon Benoit]

Thank you, Ms. Crockatt.

Go ahead, Ms. Liu, for up to five minutes.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Thank you to all the witnesses.

Let's come back to the question of reversing the flow of line 9. Mr. Brunelle, perhaps you could talk to us a little more about the expected consequences for Montreal in terms of jobs and private investment if the line 9 flow reversal were to go ahead.

[André Brunelle]

First of all, when we talk about reversing the flow of line 9, I think you are all aware that in fact, we are talking about a “re-reversal”. When this line was built in the 1970s, it was in fact designed to bring oil from the west to Montreal. It is always a question of markets and options. Then the direction changed. Now the goal is to reverse the flow back in the original direction.

People often ask me what this would change and if it would create new possibilities. The key to success is to be able to preserve what we have. Obviously when we have different options available to us in terms of raw materials, this allows us to look further ahead. I was listening to one of the witnesses speak about Suncor earlier. I don't know if you listened to the speech that was given in front of the shareholders, but he was talking about the flow reversal of line 9 and saying that he had some ideas for making investments. This is what gives people options when it comes to raw materials. People can plan further ahead. They can explore how to benefit from existing equipment, change it or add new elements to make this industry even more competitive.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Do you think the future of the Suncor refinery in Montreal will be threatened if Enbridge does not get permission to reverse the flow of line 9?

[André Brunelle]

I clearly cannot speak on behalf of Suncor. However, like all investors, we are considering the options. If other refineries or other locations provide better options, then we will have to make some decisions.

I will continue asking the association to give us equal options compared to the others, and that way we will be confident that we can do things well in Montreal East. That is our main message. Other refineries elsewhere in Canada and in the United States have access to this oil. I come back to my bear theory: give me the opportunity to run as fast if not faster than my neighbour. We will be able to do it with a plant that runs efficiently.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

You make a good point. Your presentation focused particularly on the need to maintain the value added of our natural resources.

The line 9 project raises a serious concern, because Enbridge is considering one day extending their pipeline to Portland. In that case, Quebec would not benefit from oil transiting across its territory. Basically the province would be taking on the risks without reaping the benefits.

Is it a risk in your opinion? Do you support the idea of extending the pipeline to Portland?

[André Brunelle]

After reading the published figures, I understand that, currently, the flow reversal of line 9 linking Montreal to Portland would produce up to 300,000 barrels per day. The Suncor refinery in Montreal produces 140,000 barrels per day, and the Ultramar refinery from the Valero group in Lévis produces 270,000 barrels per day.

By doing some basic math, one will realize that there isn't an extra drop of oil that can go any further. Clearly Canada needs exports. We shouldn't be preventing oil from going further, because we are creating a niche market. That's not how things work. It is by giving us access and letting us compete that we would be able to do things better than others, and hopefully, thereby obtain value added. That is the message we meant to convey, not that we fear the oil will be transported further. If we have access to that oil, we will have a chance at competing.

I would like to mention something important about new pipelines. The gentleman is right, the quality of today's pipelines is better. However, one must not underestimate the older pipelines, because there are programs that monitor the quality of pipelines and technology has evolved significantly in this field.

I have noticed myself that certain pipelines are quite old. However the quality of these pipelines is not on the inside but often on the outside. Thanks to modern-day inspection systems, we can now identify the specific location on a pipeline where it is damaged in order to replace the section in need of repair. There is no need to be worried about old pipelines, because maintenance and link detection technologies are much more advanced today.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

As my colleague mentioned earlier, I feel that the Conservatives have undermined the social acceptability of these projects by gutting the Canadian Environmental Assessment Act last year. This means that many citizens do not trust the federal government's environmental evaluation process.

If I understand correctly, you are not in favour of extending the pipeline to Portland.

[André Brunelle]

Am I against extending the pipeline to Portland? I am not taking a stand on that question. All I am saying is that there currently is not enough oil to go further. We have to have the option of getting our hands on that oil from the west in order to be competitive.

Like I said, I am not afraid of competition because we have a strong workforce and we are able to do things well. We should be given access to this oil in a competitive context to be able to do our job well in the east of Montreal.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Thank you.

[The Chair, Conservative, Leon Benoit]

Thank you.

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

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Thank you, Chair.

Mr. Telford, I just want to follow up with you on the line of questioning that my colleague Ms. Crockatt was working on.

I'm an Alberta member of Parliament, as she is. I was formerly an instructor at Red Deer College, and I know very well about the massive investments that most of our community colleges have made in training tradespeople. It's wonderful to see virtually full employment in Alberta.

The sign I see most often in my riding in central Alberta is “help wanted”. That's a good problem to have, but we have to get these things right.

I do represent a large first nations community that still suffers from very high unemployment, notwithstanding the fact that they do have some oil and gas assets on reserve and some companies that do some work. They're not situated proximal to the oil sands, which is where the advantage of the Fort McKay band actually lies.

You said that in 2009, 10% of the oil sands workforce was aboriginal people and that there were contracts of up to $1 billion. Where do you see your organization playing a role in making sure that we can capitalize on what is the fastest growing population?

I represent the four bands at Hobbema. Over 50% of the population of those bands—some 16,000 people who live there—is under the age of 25. Unemployment is between 50% and 80%, depending on the numbers you believe.

Where can we go in terms of government partnerships and so on with an organization such as yours to make sure that we fill those gaps and make sure that Canadians have jobs?

[John Telford]

There are two things.

We run a program at our hall in Edmonton called Trade Winds To Success, and it is strictly for native youth. We bring them in, and don't hold me to this, but I think we hold them for about 30 weeks. We pay for it all. They don't come in as plumbers, pipefitters, and welders. They come in and we show them every aspect of the construction industry, we evaluate them, we take the young girls aside at the end and say. “We think you're suited to be an operating engineer. We think you are suited to be heavy equipment operator or a welder”.

I would imagine most of those people are Edmonton-type natives. I'm not sure where your people are from.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

No, that's fine.

[John Telford]

We also have contracts now with oil companies that write in aboriginal content. We have apprenticeship content written into their commercial contracts. I know that on the pipeline—I sit on the pipeline advisory board for Canada—we have aboriginal content written into those contracts.

The aboriginals get a lot of work in clear-cutting, getting the ground ready for the pipeline. They haven't cracked into my trade as much as they should; they have done so on the pipefitter institutional commercial side more than on the pipeline. But the pipeline's a very small group of people. When you compare the work that goes on in Wood Buffalo versus the work that it would take to get that line from Hardisty to Saint John, New Brunswick, Wood Buffalo is where the jobs are. That's where we should be concentrating on getting our young aboriginal youth working, up in that area, and writing into the contracts that they have to hire them.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Fair enough. That's a good thing. I agree your sentiments, that we should be hiring Canadians first, training Canadians first, and doing everything we can to do that.

In your opening remarks, you mentioned a travel cost tax credit. Could you elaborate on that? Other than just the notion or recommendation, do you have anything specific you could bring to the committee that your organization—

[John Telford]

I could give you an example.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Sure.

[John Telford]

When I was a younger man living in Kingston, I used to leave home to go to Thunder Bay. A buddy and I would jump in the truck, whoever's truck it was, and we'd drive to Thunder Bay for a 12-day shutdown in one of the paper mills up there. We had one overnight stay. It's an 18-hour drive from Kingston to Thunder Bay. We had one night in a hotel getting there. On a 12-day shutdown, because we were travel cards, we weren't local members, we probably got 10 days. I had to keep myself in a hotel for 10 days. I had to feed myself. If the job were in Bowater, which is downtown Thunder Bay, there was no travel and no board. I can't write off my hotel room. That's all I'm asking for: write off my gas, write off my hotel room, write off my gas home. The salesman who sold the welding rod that I used on that job got to write off his travel expenses and his supper.