Natural Resources Committee on May 30th, 2016

[The Chair, Liberal, James Maloney]

Mr. Serré, we'll go over to you, and I think that's going to be all we have time for.

[Marc Serré, Liberal, Nickel Belt, ON]

I'll be sharing my time with Mr. Tan.

[Geng Tan, Liberal, Don Valley North, ON]

Thanks, Marc.

My question is for you, Mr. McGowan. It's a quick question. The government has planned to phase out the fossil fuel subsidies over the middle term. Do you have any strategies in place to best compensate this loss in revenue? Is increased innovation your answer? Or should we look at developing new markets to export more oil or value-added products, as you've just promoted?

[Gil McGowan]

For us, the important thing is to move up the value ladder here in Canada. Frankly, we're skeptical of the arguments that have been made by industry, which you've just heard repeated today, that the construction of pipelines and access to tidewater will automatically give us a price lift. That's based on a whole bunch of unproven assumptions.

I've sat through a lot of committee hearings like this and listened to a lot of presentations over the last 10 years, and what strikes me is that a lot of the arguments that are being made now by industry are the same arguments that were being made by industry before the price of oil collapsed. There doesn't seem to be a recognition that the global oil market has fundamentally changed and that this change has implications for the way forward for our industry here.

The reality is that even if we get access to tidewater there is a global oversupply of oil of about two million barrels per day. Getting access to tidewater is not going to change that situation. It'll just make it worse. Adding to the glut doesn't end the glut; it makes it worse.

For all the reasons I spoke of in my presentation, we don't see and I think a lot of other observers don't see any change in this fundamental situation. Going forward, we're looking at a lower-for-longer situation in terms of oil prices, so betting on a pipeline right now.... I know it's the thing that people say right now, and it's the thing that people have been saying for five years, but the world has changed, and we need a new framework to look at this industry going forward.

For us, the direction seems to be moving away from oil to be developed as a fuel. The real question is not about how we can stop that global trend, because it's out of our control. The question the policy-makers should be asking is, with these global trends, how can we prosper? We think that using the resources we have to fill new market niches, perhaps for something other than fuel, is the way forward. Manufacturing petroleum into other kinds of goods will create jobs here and actually deal with the world as it is, not with the world the way we want it to be.

[Geng Tan, Liberal, Don Valley North, ON]

Thank you.

[The Chair, Liberal, James Maloney]

Mr. Serré.

[Marc Serré, Liberal, Nickel Belt, ON]

Thanks to all of you for your presentations. I saw you a few weeks ago for your presentations. I want to go back to the earlier comments.

We've talked about public confidence, about trying to engage Canadians, communities, and first nations, and about the environment. We heard a statement that the Conservative Party understands and supports the oil sands, and I want to mention first that I was really impressed with the environmental work you've done. At our meeting, you talked about how you haven't really shared that enough with the public in order to gain their confidence.

We know that in the last five years we haven't had any pipelines to tidewater. What could have been done over the past five years and what could be done now to increase the public confidence to help build pipelines to tidewater?

[Patricia Nelson]

I'm going to take this one, because I think it's a critical that we all have a message that we carry outside of our offices to people not only outside of Canada but also across Canada. The message is that we're very small in population but very mighty in resources, human and natural.

I look at the development that's taken place. There's been massive partnership from coast to coast, whether we're talking about the people manufacturing steel in Ontario, the people building pipelines or rail lines, or our indigenous people, who have been some of the best partners you could ever find in the world.

It was mentioned earlier that some of our top service companies for the oil sands in Alberta are owned and operated by the aboriginals. If you could get them and book them, you'd be doing great. They are the best of the best. They're totally engaged in the process with us, and it's been a phenomenal relationship.

I'm going to tell you a quick little story, Mr. Chair. I've heard about environmental issues. I look at Syncrude. I see Syncrude doing a reclamation process that involves reclaiming mined lands, which is very difficult, and bringing them back to be better than what they were. In partnership with our aboriginal people, they've been able to breed baby buffalo on that reclaimed land to restock Wood Buffalo National Park at the north end of our province. It's a testimonial to a partnership coming together to make things happen.

The long term that we need to look at, whether it's for renewables or the changes that are taking place.... Alberta is the only jurisdiction in all of Canada that has already installed cogeneration in our industrial campuses, and the vast majority of it is in the oil sands area. We've already done that in Alberta, not because a government said to do it or a political group said to do it, but because it made sense. Over 4,000 megawatts of power today is installed and working in Alberta, and 2,600 megawatts of that power is in the oil sands. They're a leader in the transition to a new carbon, lower-carbon future that we need for this country. That's the messaging we need to send internationally. There are lots of countries out there. As for our friends to the south, they're always going to, but they never get to it.

Canada has been the leader. That's why Canada gets applauded often, for moving forward. We're not afraid to step up without policies or laws being made. We do it because it makes sense. We've done that in Canada all across the board. When it makes sense to do it, let's get it done.

If we continue on that path, then whether it's jobs, whether it's innovation, or whether it's technology, we can make that happen. We all have to be prepared to think differently. We can't think about the way it was 20 years ago, because it isn't like that today. We're into a new era of innovation and technology. We can be the best competitor ever if we put our heads together and we back ourselves. That's the messaging on the PR side, as far as I'm concerned, that has to take place.

It doesn't matter which province or which political party you're from, we're all Canadians. Canada needs to be in the global market. We can show the way to a lot of countries that don't have any future or any opportunity, that can't feed themselves, or that have no industrialization. Our message could be that we can be there to help them develop so that they could look after themselves. We have the technology and the smart young people, brilliant young people, who can lead the way.

To me, the thing that binds us is coming together and making that happen. That's what our IOSA members are all about. Let us go out and compete. Don't hold us back. Give us a structure and an environment that let us do what we do best. We can train. We can guide. We can help. And we're there, because we believe in the future of this country. That's the whole message.

[The Chair, Liberal, James Maloney]

This is a good place to wrap up.

Thank you very much.

[Voices]

Hear, hear!

[The Chair, Liberal, James Maloney]

Just for the record, you're the first witness who has generated applause. I personally get booed periodically.

Thank you, all three of you, for being here today. Your presentations were excellent and well received. We're very grateful.

We'll see everybody on Wednesday.

The meeting is adjourned.