Natural Resources Committee on June 20th, 2019

[The Chair, Liberal, James Maloney]

I call the meeting to order.

Good afternoon, everybody. I hope everybody is doing well. I know that everybody's quite excited about today's events and the fact that this is our last official act before we can all go home.

Before we get going, Minister, I want to say thank you to a number of people, starting with our clerk and our analysts.

[Some hon. members]

Hear, hear!

[The Chair, Liberal, James Maloney]

We all started this journey three years ago. Richard, Shannon, T.J. and I were all original members of this committee and gang. We've come a long way since then.

Speaking for myself, I know that I never would have made it this far if it weren't for the support of everybody on this side of the table. Thank you very much. I honestly can't thank you enough. You've been tremendous. There were lots of times, I will readily admit, when I wasn't sure what I was doing.

[A voice]

We were going to point that out.

[The Chair, Liberal, James Maloney]

Yes, I know. Actually, sometimes you did.

I also want to say thank you to all the committee members. For four years now, we've prided ourselves in having a committee in which we worked incredibly well together. We disagreed at times, but we did so respectfully.

As a result, we've had a committee that other people have looked at with envy, I think, and it's something that we should all be very, very proud of. Thanks to all of you. It's been my pleasure to work with all of you. Honestly, it has. I hope to see all of you again in the fall, and I know you feel the same way too.

Also, there are the other people behind us. They're the ones who really add a lot to this equation as well. Without all of you, none of us could do our jobs, so I want to thank everybody who's on the perimeter of this room.

[Voices]

Hear, hear!

[The Chair, Liberal, James Maloney]

You make it all happen.

[An hon. member]

Except for the water people.

[The Chair, Liberal, James Maloney]

Except for the water people. They want to make sure we get out of here quickly, David.

[Voices]

Oh, oh!

[The Chair, Liberal, James Maloney]

Minister, I want to thank you. I know you've had a busy schedule for the last couple of days. We've had to move the time for this meeting a number of times, and you've been quite gracious in accommodating us and making yourself available. I believe you're in Calgary right now. We're grateful that you were able to make some time to do this.

You only have an hour, we know, so I'm going to stop talking now and turn the floor over to you. Thank you for joining us, Minister.

[Amarjeet Sohi, Liberal, Minister of Natural Resources]

Thank you, Mr. Chair, and good afternoon, everyone.

I first of all want to acknowledge something that is on everyone's mind today, which is the passing of a colleague and a friend to many. On behalf of our government and my family, I want to extend my deepest condolences to the family of Mark Warawa, my colleague, and to our colleagues from the Conservative Party and many others who have lost a friend today.

I would also like to take a moment to recognize that I am speaking to you from Treaty No. 7 territory. Such acknowledgements are important, particularly when we are meeting to talk about doing resource development the right way. Our government's approach to the Trans Mountain expansion project and the start of the construction season is a great example of that—of resource development done right.

Let me also begin by recognizing that I know this expansion project inspires strong opinions on both sides—for and against—and with respect to both sides of the debate, I want to assure everyone that our government took the time required to do the hard work necessary to hear all voices, to consider all evidence and to be able to follow the guidance we received from the Federal Court of Appeal last August.

That included asking the National Energy Board to reconsider its recommendation, taking into account the environmental impact of project-related marine shipping. It also included relaunching phase III consultations with indigenous groups potentially impacted by the project, by doing things differently and engaging in a meaningful two-way dialogue.

On that note, I would like to take a moment to sincerely thank the many indigenous communities that welcomed me into their communities for meetings over the last several months. I appreciate your openness, your honesty and your constructive ideas and sincerity of views.

Honourable members, no matter where you stand on TMX, this decision is a positive step forward for all Canadians. It shows how in 2019, good projects can move forward when we do the hard work necessary to meet our duty to consult indigenous peoples and when we take concrete action to protect the environment for our kids, grandkids and future generations.

When we came into office, we took immediate steps to fix the broken review system the Conservatives left behind. When the risks made it too difficult for the private sector to move forward, we stepped in to save the project. When the Federal Court of Appeal made its decision back in August of 2018, we made the choice to move forward in the right way.

When we finished this process, we were able to come to the right decision to deliver for workers in our energy sector, for Albertans and for all Canadians, a decision to support a project that will create jobs, diversify markets, support clean energy and open up new avenues for indigenous economic prosperity in the process.

Where do we go from here, now that the expansion has been approved? While these are still early days, we have a clear path forward for construction to begin this season and beyond. The Prime Minister laid out a lot of this on Tuesday afternoon as he announced our decision. Minister Morneau expanded on some of these details when he was in Calgary yesterday, talking about the road ahead and about launching exploratory discussions with indigenous groups interested in economic participation and about using TMX's revenues to ensure Canada is a leader in providing more energy choices.

We have also heard from the Trans Mountain Corporation about both its readiness and its ambition to get started on construction. Ian Anderson, the CEO of the Trans Mountain Corporation, made this very clear yesterday.

That's also what I heard when I visited with Trans Mountain Corporation workers yesterday in Edmonton. There were a number of contractors there. They are ready to proceed on the expansion of the Edmonton terminal, as well as on many of the pumping stations that are required to be built in this expansion.

The message is clear. We want to get shovels in the ground this season, while continuing to do things differently in the right way.

The NEB will soon issue an amended certificate of public convenience and necessity for the project. It will also ensure that TMC has met the NEB's binding pre-construction conditions. The Trans Mountain Corporation, meanwhile, will continue to advance its applications for municipal, provincial and federal permits. We stand ready to get the federal permits moving.

As all of that is happening, our government continues to consult with indigenous groups, building and expanding our dialogue with indigenous groups as part of phase IV consultations by discussing the potential impacts of the regulatory process on aboriginal and treaty rights and by working with indigenous groups to implement the eight accommodation measures that were co-developed during consultations, including building marine response capacity, restoring fish and fish habitats, enhancing spill prevention, monitoring cumulative effects and conducting further land studies.

We are also moving forward with the NEB's 16 recommendations for enhancing marine safety, protecting species at risk, improving how shipping is managed and boosting emergency response.

What is the bottom line? There is no doubt that there are a lot of moving parts. This is a project that stretches over 1,000 kilometres, but it is moving forward in the right way, as we have already proven with our $1.5-billion oceans protection plan, our $167-million whale initiative, our additional $61.5 million to protect the southern resident killer whale, and our investment of all of the new corporate tax revenues, as well as profits earned from the sale of TMX, in the clean energy projects that will power our homes, businesses and communities for generations to come.

Before making a decision, we needed to be satisfied that we had met our constitutional obligations, including our legal duty to consult with indigenous groups potentially affected by the project, upholding the honour of the Crown and addressing the issues identified by the Federal Court of Appeal last summer.

We have done that. We accomplished this by doing the hard work required by the court, not by invoking sections of the Constitution that don't apply or by launching fruitless appeals, both of which would have taken longer than the process we brought in.

While Conservatives were focused on making up solutions that wouldn't work, we focused on moving this process forward in the right way. We have confirmation of that, including from the Honourable Frank Iacobucci, former Supreme Court justice, who was appointed as a federal representative to provide us with oversight and direction on the revised consultation and accommodation process.

I will close where I began, which is by saying that we have done the hard work necessary to move forward on TMX in the right way, proving that Canada can get good resource projects approved and that we can grow the economy and deliver our natural resources to international markets to support workers, their families and their communities, all while safeguarding the environment, investing in clean growth and advancing reconciliation with indigenous peoples.

Mr. Chair, I think this is a good place to stop and invite questions.

Thank you so much once again for having me here today.

[The Chair, Liberal, James Maloney]

Thank you very much, Minister.

Mr. Hehr, you're going to start us off, I believe.

[Kent Hehr, Liberal, Calgary Centre, AB]

Just prior to my asking questions of the minister, I'd like to applaud the chair for his exceptional work and leadership for this committee. You've done excellent work.

[Some hon. members]

Hear, hear!

[Kent Hehr, Liberal, Calgary Centre, AB]

Minister, it's a thrill to have you back. I was in Calgary yesterday for Minister Morneau's presentation and his address to the Economic Club of Canada in Calgary. The excitement was present in the air, and there was a hop in the step of people in the room, which was good to see.

I think it's fair to say that last year's Federal Court of Appeal decision came somewhat out of the blue. The court said—and it was clear—that we needed to do our indigenous consultation better and our environmental considerations better.

I was chatting with Hannah Wilson in my office this morning, and I learned that this is happening not only here in Canada but also in the United States. In the case of Keystone XL, Enbridge Line 3 and other energy projects around the United States, the courts have been clear that this is the way things need to be done. Our government is trying to see that through, with indigenous consultation and environmental protections being at the forefront.

What was done differently this time, in consideration of the court decision that we were working with?

[Amarjeet Sohi, Liberal, Edmonton Mill Woods, AB]

The process we put in place this time was quite different from what was done in past consultations.

First of all, we co-developed the engagement process with input from indigenous communities. We provided proper training to our staff and we doubled the capacity of our consultation teams. They worked tirelessly to engage in a meaningful two-way dialogue.

We also provided participation funding to indigenous communities so they could properly participate in the consultation process. We held more meetings and we met with indigenous communities in their communities. I personally held 45 meetings with indigenous communities and met with more than 65 leaders to listen to and engage with their concerns.

I am very proud of the outcome. We are offering accommodations to indigenous communities to deal with their concerns over fish, fish habitat, protection of cultural sites and burial grounds, as well as issues related to oil spills, the health of the Salish Sea, the southern resident killer whales, underwater noise and many others.

The accommodations we are offering, Mr. Chair, actually go beyond mitigating the impact of this project and will also go a long way toward resolving some of the issues and repairing some of the damage that has been done through industrial development in the Salish Sea. They will respond to many of the outstanding issues that communities have identified, related not only to this project but also to many of the other cumulative effects of the development that communities have experienced.

[Kent Hehr, Liberal, Calgary Centre, AB]

Thank you for that, Minister.

The Trans Mountain Pipeline is important to Calgarians. In fact, it's in the public interest. It not only provides jobs for Albertans but also provides us an opportunity to get fair prices for our oil. None of that is possible without shovels being in the ground, so to speak. What steps must take place before that can happen? Will shovels be in the ground this construction season?

[Amarjeet Sohi, Liberal, Edmonton Mill Woods, AB]

Mr. Chair, as I said in my opening remarks, the National Energy Board will issue the certificate in the next couple of days. I was in Edmonton and had a chance to meet with workers and some of the contractors. They're ready to get down to work and they're preparing some of the work that does not require regulatory approval. The company can start mobilizing the contractors and subcontractors. They can start mobilizing their workers. They can start bidding for reconstruction work that is necessary and they can start applying for permits.

As we heard from the Trans Mountain Corporation, they're planning to put shovels in the ground by September. The goal is to complete the construction by mid-2022 so that we can start flowing the oil to markets beyond the United States.

It is very important, Mr. Chair, to understand that 99% of the oil we sell to the outside world goes to one customer, which is the United States. It is a very important customer for us. We need to expand our market with them, but we need to have more customers than one, because we are selling our oil at a discount and losing a lot of money. Over the last number of decades, the situation has remained the same. We want to make sure that this situation changes. That is why getting this project moving forward in the right way and starting construction is very important, not only to Alberta workers but also to all Canadians.

[Kent Hehr, Liberal, Calgary Centre, AB]

Part of the approval of the pipeline was deeply linked to meaningful consultation with indigenous peoples. Are there ways we are ensuring that indigenous peoples meaningfully benefit from Trans Mountain in terms of jobs and other opportunities?

Also, I've heard some exciting things around possible equity stakes. Can you inform us about any of those conversations?

[Amarjeet Sohi, Liberal, Edmonton Mill Woods, AB]

Yes, and a large number of indigenous communities have signed benefit agreements with the company. Those amount to close to $400 million of economic opportunities for indigenous communities. There are other communities that are still in discussions about economic benefits.

As Minister Morneau stated here in Calgary, he is launching a process whereby indigenous communities can explore options to purchase the pipeline or make other financial arrangements. This is something that I have personally heard, Mr. Chair, from a large number of communities that are interested in seeking economic opportunities for their communities to benefit from resource development. We see a lot of potential in that, and Minister Morneau is going to be leading that. Ownership by indigenous communities could be 25% or 50% or even 100%.

We are also providing funding for indigenous communities so that they'll be ready to participate in that process.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Hehr.

Ms. Stubbs is next.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thank you, Chair. I too want to express that I've really enjoyed working with you and with all the members of this committee over the past four years.

Thank you, Minister, for joining us in committee today in response to my request, through a motion that was supported here, to give some concrete details about the Trans Mountain expansion, which your government has approved formally for the second time now in two and a half years.

I want to start with something you mentioned. The backgrounder indicated, and you have just stated as well, that the government-owned Trans Mountain Corporation is required to seek approvals from the National Energy Board for construction and continued operation. I understand there will be several hearings required by the NEB in relation to the route of the pipeline before construction can start. Can you tell us exactly what the timeline will be for those hearings?

[Amarjeet Sohi, Liberal, Edmonton Mill Woods, AB]

As many of us will remember, the National Energy Board imposed a number of conditions on this project. Trans Mountain Corporation, like any other private company, would have to comply with those conditions and respond to the NEB, and would need to apply for those permits. As you heard from CEO Ian Anderson, they are putting a process in place to work with the NEB to get those permits issued in an expedited way. The construction is supposed to be starting in mid-September.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thank you, Minister. Of course, the Trans Mountain expansion used to be owned by a private company, but now, of course, it's a wholly owned subsidiary of the Government of Canada, which is why I'm asking you. It's also one reason, I assume, that your government delayed by a month your decision, which was supposed to have been made by May 22. I think it would have been reasonable for Canadians to expect all of those authorizations required by the NEB, as well as permits and construction contracts, to be firmed up by the time you gave your second formal approval, after spending billions of dollars and promising that it would be built immediately.

Something else that Ian Anderson said was, as you've indicated, that construction may start in September at the earliest, but that there could still be delays in the construction and completion of the pipeline caused by anti-energy activists and legal challenges. Unfortunately, those are the same risks that were posed to the project when you first approved it in 2016.

Can you tell us specifically what your government's plan is to deal with multiple legal challenges that will be filed by the project's opponents and other levels of government?