Natural Resources Committee on March 25th, 2014

[Mel Norton]

Historically what we've seen in Saint John is that when there has been some optimism for large growth, there has been some increase in property values. But generally, the property values in our city have remained relatively flat since approximately 2008. I would expect and I suspect that individual homeowners and property owners would benefit from some increase in property value, but certainly we have never experienced the kind of rapid inflation in home prices or property values that other places in Canada have seen.

[Christine Moore, NDP, Abitibi—Témiscamingue, QC]

In your estimation, how many more people can Saint John accommodate? How many more people could move there without any adverse impact on the level of services delivered by the city?

[Mel Norton]

The city was originally planned to have, at this point in history, a quarter of a million people living in it, and we have 70,000 people.

[The Chair, Conservative, Leon Benoit]

Thank you.

Thank you, Ms. Moore.

Continuing with the five-minute round, we have Mr. Leef, followed by Ms. Duncan and Ms. Block.

Go ahead, please, Mr. Leef.

[Ryan Leef, Conservative, Yukon, YT]

Thank you, Mr. Chair, and thank you to all our witnesses.

Mayor Norton, I was going to ask questions along the same vein as questions that Ms. Moore was asking, and you touched on the subject. I'm a member of Parliament for the Yukon, and we've certainly benefited from the Atlantic Canada labour force as well over the years, particularly from Newfoundland and Labrador.

The interesting thing we noticed, and it's the reason we engaged in this study in the first place, is that, to get down to the kitchen table items for Canadians, there has to be a discussion about risk versus reward. Many people either see the footprint or they picture the negative aspect of development—not just of oil and gas, but of all kinds of development in the country—but don't, we feel, necessarily appreciate the depth and the breadth of the rewards that come with it.

You've talked about the social licence and you don't see large development as a problem. What do you think are the largest contributing things to having that licence? Is it the vacancy rates, both commercially and independently, or are your projections of having a 250,000-person community that only has 70,000 people in it now spurring a desperate need for growth, or is it something deeper ingrained in your community that just welcomes it? I would say the situation is probably very different across the country, in terms of welcoming development.

May I have a quick comment on that?

[Mel Norton]

Mr. Leef, thank you for the question.

We simply want what the rest of Canada in many ways already has, and that's the opportunity to pull ourselves up and be self-sustaining. We want to be a “have” place. We see what it has done in Saskatchewan, what it has done in Alberta, in Newfoundland, in British Columbia. We see so many provinces that are “have” places.

That culture of being entrepreneurial is ingrained in Saint Johners from the very foundation of our city. When they founded the city, they were entrepreneurs. It's embedded in the fabric of Saint Johners. We have not had much chance to ensure that we realize those opportunities, but we know that we drive the New Brunswick economy. We want to play a bigger role, and this is an opportunity for us to do that.

[Ryan Leef, Conservative, Yukon, YT]

It would be nice to be able to focus on the positive, but you're looking toward growth, so we have to talk a little about the negative aspect of this, because those are kitchen table issues for Canadian families.

What does it mean to your community when people board the planes and are away for three to four weeks at a time? What does it do in terms of the social fabric of the community, the development, and the growth? What does it mean for kids growing up, when they have a one-parent family and are having periodic time with intermittent parental relationships? What does it mean for community growth, and community strength and wellness, from that point of view?

[Mel Norton]

It's very difficult. It's very difficult for families who are in Saint John, not only for the parents and the children who are separated from their spouses for weeks at a time but also difficult for the grandparents. What we see increasingly happen—I have seen countless stories of this—is that parents who have worked in Alberta, for example, for a couple of years will finally decide to leave and go to Alberta. The grandparents are separated from their grandchildren, and suddenly the grandparents decide they need to be closer to that family, so they leave too. We've lost not just one but two and three generations of Atlantic Canadians and New Brunswickers.

This is slowly but surely pulling apart the fabric of the entire province. Right now we have experienced another population decline. It's not sustainable. We're either going to be self-sustaining or we're going to be reliant on the rest of the country to do for us what we should be able to do for ourselves.

It's as simple as that, Mr. Leef.

[Ryan Leef, Conservative, Yukon, YT]

This is the oil and gas, the energy sector, and Mr. Teed pointed out that there are six areas of focus. You just basically said it's among the top six, but where does it rank in terms of those six?

[Mel Norton]

In terms of opportunity, this is the top one. We see the opportunity for everything, from expansion of our refinery to just the tax base that would come from having a pumping station from the west-to-east pipeline running through our city, as just vital factors in ensuring the viability of our community.

[Ryan Leef, Conservative, Yukon, YT]

Thank you.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Leef.

We go once again to Ms. Duncan. You have up to five minutes, please.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Thank you very much.

Your Worship, my heart goes out to you. My family actually left New Brunswick, went to North Dakota, and came back up. Of course, that was when there wasn't enough farmland when you had 13 children. Now you're losing the families for other reasons. But you certainly come from a beautiful part of the world. My family is from the Petitcodiac, the Steeves gang.

I am trying to recall in the background...or I can remember some controversy around a proposal for a pipeline through the city of Saint John. Concerns obviously have been raised. Obviously people want the jobs, but there is the risk.

Can you tell us a bit about what kind of consultation is going on at maybe the provincial or the municipal level around managing the risks of increased refining? Have there been concerns about the rail traffic of Bakken and other fuels into Saint John?

[Mel Norton]

You've asked several great questions.

As many will know, about a year or more ago the Irving oil refinery put in place rail capacity to bring in 100,000 barrels per day of crude product from western Canada. Certainly there were conversations about the impact of that.

The community consultations are really driven by the reputation and the track record of Irving Oil. It has an exceptional safety track record. I touched in my opening remarks on the partnership between the City of Saint John's fire department and Irving Oil. Irving Oil of its own volition went out and purchased a state-of-the-art brand new super fire truck to respond to any issues. They've partnered with the Saint John fire department to provide training to the Irving Oil employees. It has been done in a way that will save money and generate revenue for the city. So we've seen really good community collaboration on dealing with risk factors.

In terms of the consultations, the challenge that you mentioned was the Brunswick Pipeline that ran through Saint John. That's been a really good news story. It was related to the development of our LNG terminal. It ultimately resulted in a multimillion-dollar investment in Rockwood Park, which is one of the largest municipal parks in Canada. It completely transformed the landscape of that park. I don't think you would find a Saint Johner today who has any concern with how that ultimately turned out.

Yes, there were conversations, and yes, there are individuals who...and rightly so. We have to make sure that the environmental regulations are there and the environmental safety is there. But ultimately Saint John is a place where you can on the one hand be in Rockwood Park, and on the second hand go out the door and be at the refinery. We don't see those as mutually exclusive at all.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Thank you.

If I have a few more minutes, I have a question for Mr. Teed or anyone else who would like to respond.

There is some consternation around the potential impacts of gas fracking. Of course we have been hearing lots of concern around opposition of fracking in New Brunswick. I'm wondering if you, Mr. Teed, or if any of you have been directly engaged in the Royal Society study and if you're anticipating that it will provide direction on potentially better regulation of the sector.

[William Teed]

No, I have not been involved in that study. Certainly the Government of New Brunswick has done extensive work on the regulating of the industry, and has recently released what they believe to be some of the toughest regulatory rules in place to govern the development of the shale gas industry.

The business community, I would suggest, is strongly supporting the development of shale gas. In fact, in a recent survey of the Saint John Board of Trade membership, of which about 40% of the members responded, there were specific questions about the extraction of natural gas. Over 75% of respondents said they were in support of that development. Then it went on to ask of that 76%, how many were supportive of the process of fracking, and 72% of that 76% said yes, 4% said no, and the rest were undecided. So I suggest that the business community understands what's about to take place—what we hope will take place—and that they feel comfortable with the regulatory regime that's been put in place.

[The Chair, Conservative, Leon Benoit]

A short question....

[Linda Duncan, NDP, Edmonton Strathcona, AB]

So you're saying the business community supports it, but what about the communities where the fracking is occurring?

[William Teed]

Obviously, there is still an educational process to take place, but again the comfort level, I would suggest, of the general population has increased immensely throughout New Brunswick. The fear of the unknown is sometimes hard to overcome, and the information that is now being dispersed, and the discussion that's taking place within New Brunswick communities, I think, is helping to educate people on the process, and helping them to basically understand it and support it now.

[The Chair, Conservative, Leon Benoit]

Thank you.

Thank you, Ms. Duncan.

We go now to Ms. Block, Parliamentary Secretary to the Minister of Natural Resources, followed by Ms. Moore and Ms. Crockatt.

Go ahead, please, Ms. Block.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you very much, Mr. Chair.

I, too, want to echo the comments of my colleagues in welcoming all of our witnesses here today. It's been very good testimony.

I also want to commend the members from New Brunswick. I think you make some very compelling arguments for the need to continue on this path of resource development and interconnecting provinces all across the country so that we can all benefit from the growth and prosperity that we see in some places.

I appreciate very much what you've shared about the impact on communities and families. I don't think that's something that I've taken into consideration up until this point in time. We certainly have heard many stats from many of our witnesses in regard to the revenue from taxes and royalties that provinces receive, as well as the benefits to local supply chains, but haven't really stopped to think about the impact on the fabric of a community when individuals get on a plane and leave for weeks at a time, or when whole families have to move in order to take advantage of employment opportunities.

We've also been getting a very clear picture throughout this study of the benefits across the country from the development of oil and gas in the west, and now we are being challenged to consider what that will mean for you on the east coast. I think we've also been made more aware of the opportunities that are being lost daily as we perhaps take a fair bit of time looking at how we can get our resources to tidewater. I know that's why we introduced the responsible resource development plan, and Your Worship, or perhaps it was you, Mr. Teed, spoke to the fact that we have made timelines more predictable and timely through that plan.

I guess one of the things I would ask any one of our witnesses to speak to, because I think it's becoming more and more something that we are aware of, is the imperative. I think there's an imperative here, and you've put that into context very well for us. I can tell you coming from Saskatchewan, managing growth and prosperity is the challenge of choice when you look at where we've been, so I would just like any one of our witnesses to speak to the imperative of continuing on this path of responsible resource development and making sure that we have the infrastructure in place to ensure that all provinces benefit.

[The Chair, Conservative, Leon Benoit]

Could you give me an indication of who would like to start with answers?

Mayor, you go ahead and start.

[Mel Norton]

Thank you, Mr. Chairman.

In terms of the overall picture in Canada, we know that even in recent years we've seen a number of refineries close in eastern Canada. Mr. Regan's hometown is no exception. A refinery was closed there recently. So we know just for the viability of existing industries the west-east pipeline is an imperative.

We also know that in Saint John, particularly, it's not even so much the arrival of the pipeline that's an imperative; it's the potential impact. So whether it's a bitumen upgrader, whether it's a coker, whether it's all the secondary plastics industries or other petroleum product industries that can develop, those are imperatives. If we're going to grow a city that is self-sustaining and really assist New Brunswick, those are imperatives.

[The Chair, Conservative, Leon Benoit]

Mr. Patterson, go ahead, please, sir.

[Anthony Patterson]

Thank you.

In the context of Newfoundland and Labrador, benefiting from the oil and gas blessing that we have at the moment is our number one priority. If we look at the cluster of companies in my peer group, our job over the next 20 years, while there is an oil industry that is investing in research and development, is to grow a high-tech industry that is globally competitive and that can generate revenues and jobs within our province so that we can step into place as being equivalent to the mining sector.

We're trying to do something very similar to what Norway has done. That's who we view as our number one competitor and our number one model when we look at the growth of the Newfoundland economy, and at taking the oil and gas benefits and reinvesting them into stimulating the growth of a new industry.