Natural Resources Committee on Oct. 9th, 2024

[Jagmeet Singh, NDP, Burnaby South, BC]

You don't know how to answer because there's no answer that's justifiable.

[The Chair, Liberal, George Chahal]

Time is up. You'll get another opportunity afterwards.

Thank you.

We'll now go to our second round of questions.

Mrs. Stubbs, you have five minutes. The floor is yours.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thanks, Chair. I appreciate that.

I would just note that Mr. McKenzie said that the private sector could and should build pipelines in Canada.

Mr. Singh is here and raised this issue of the major struggles that Canadians now face because they can hardly afford to heat, eat, feed, drive and house themselves. Thanksgiving is coming, and there are pictures online showing that some Canadians are finding the cost of a 10-kilogram turkey to be over $80. After nine years, more Canadians are forced to visit food banks than ever before.

Chair, I would just like to move the motion that I gave notice of on April 12, 2024.

Given that,

1. On April 1st, the Liberal Government increased the consumer carbon tax by 23%.

2. 70% of Canadians and 70% of...Premiers are opposed to the latest carbon tax increase.

3. The NDP Premier of Manitoba recently came up against the carbon tax and plans to put forward a proposal to exempt the province from the carbon tax.

4. 1 in 5 Canadians [are struggling, they] live in energy poverty.

Therefore, all of us together:

In order to lower energy costs for Canadians living in energy poverty, the committee report to the House its recommendation that the Liberal Government abolish the consumer carbon levy, more commonly referred to as the carbon tax.

I would urge all members around the table to vote for this motion to axe the costly carbon tax so that at least a little relief can be provided to struggling Canadians, their families and their loved ones on this Thanksgiving weekend and so that they can afford to eat.

Why don't we vote on it right now?

[The Chair, Liberal, George Chahal]

We have a motion on the floor and we have a speaking order, so we'll get through the speaking order and hopefully be able to....

Ms. Dabrusin, the floor is yours.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

Thank you, Mr. Chair.

We have witnesses here we're definitely going to want to hear from, so I'm going to suggest that we go back to them.

Just before that, I appreciate that the member opposite talked about the upcoming Thanksgiving day, because it gives me a chance to highlight the fact that next week Canadians will be receiving the carbon rebate wherever the federal backstop applies. With that, they will be seeing for the first time the doubling of the rural top-up on that payment, so I recommend that they look in their accounts. It'll be a direct deposit or they'll get a cheque.

The carbon rebate is part of the carbon pricing system, which the Conservatives apparently are suggesting that we scrap, never mind the fact that carbon pricing, as I mentioned at the very beginning, is the most efficient. When I say “efficient”, it's the cheapest way of dealing with emissions. That is supported by so many economists who back us up on that. There may be other pathways to do it, not that the Conservatives have suggested a single other path they would use to do it, but I will say that the challenge is that it's an efficient system. I would fully support it.

However, I would like to suggest that, since we do have witnesses here and I would really like to be able to ask them some more questions, we adjourn the debate on this motion.

[The Chair, Liberal, George Chahal]

We will put it to a vote.

Go ahead and call the roll, please.

(Motion agreed to: yeas 7; nays 4)

[The Chair, Liberal, George Chahal]

Debate is adjourned.

We'll go back to Mrs. Stubbs for a question.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thanks, Chair.

Mr. McKenzie, maybe you can expand on the contributions that Cenovus and the oil and gas sector make to jobs, businesses and powerful paycheques for Canadians, as well as, importantly, all the very significant revenue that is sent, as is your responsibility, to all three levels of government to provide the social programs and services that all Canadians in every region benefit from, support and expect.

Also, could you comment especially on the importance in particular for indigenous communities and people in rural and remote regions, where the only economic opportunities available in some places are often operations like yours?

[Jon McKenzie]

I think I mentioned in my opening remarks that the oil and gas industry provides 450,000 well-paying jobs to Canadians. In Cenovus itself, we employ more than 8,000 employees, and those are well-paying jobs that pay well above the industry average and allow people to live independently and enjoy a high quality of life and a high standard of living.

Similarly, this industry, because we export our product, creates a demand for Canadian dollars, which increases the value of the Canadian dollar and supports all Canadians in the products that we import, which I talked about as well.

The biggest contribution by far is the amount that we pay in taxes and royalties. Royalties are actually unique to the natural resource industry in that we actually make contributions to the government well before we make any profits. Even in times of low commodity prices, governments across Canada can count on the support that they get from the extractive natural resource industry. Those amounts, including the taxes we pay, as I mentioned, are more than 50% of what we earn. When we make profits, Canada benefits not just in terms of royalties, taxes, jobs and the Canadian dollar but also in terms of the investment that we make.

[The Chair, Liberal, George Chahal]

Thank you, Mr. McKenzie.

We'll now go to our next speaker, Mr. Jowhari.

You have five minutes.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Mr. Chair.

Thank you, witnesses, for your testimony today.

I'll go back and focus on the Trans Mountain pipeline expansion. That's why we are here.

I'll frame my questions around three themes. The first is the economic benefit we've been talking about, but in a bit of a different way. I'd also like to get some sense of the investment being made in clean energy, especially carbon capture. Thirdly, when I get some more time, I want to talk about the safety aspect of the Trans Mountain pipeline.

I'm going to start with Mr. Sproule.

Can you give me some idea about economic benefits and whether they hit our GDP at the national level? We have an almost $3-trillion economy now. Talk about the jobs this pipeline will create and the trade surplus we've been experiencing, specifically the indirect, downstream impacts. Finally, talk about the benefit of the contracts being awarded to indigenous businesses.

Can you give us some indicators around that?

[Greig Sproule]

Thank you for your question.

I provided some statistics in my opening statement, but let me expand a bit.

In terms of post-construction, over the first 20 years of the project's operating period, Trans Mountain is expected to provide another 36,000 man-years of employment. That's a huge employment base and a huge tax base for the country. This is the kind of economic stimulation the country needs, in terms of contributing to the GDP and having a tax base.

On the export and balance of trade side, we're already seeing 300,000 to 400,000 additional barrels being exported from Canada. There's room for a couple hundred thousand more in there. That doesn't only have a benefit in terms of direct value. It also reduces the differential that was in place when Canada had a locked-in supply and one major customer. For every one dollar in reduced differential, it's a $1.2-billion increase in GDP for Canada. I think these numbers come from the parliamentary budget office.

At the time it was approving and reviewing the Trans Mountain expansion, the National Energy Board was thinking that the differential may shrink by approximately nine dollars. We don't have an exact forecast, but we've already seen a shrinking of that. This will lead to hundreds of billions of dollars in economic impact over a 20-year period for Canada. It would have been lost without this project going forward. That's a huge benefit in terms of trade balance, tax base and employment.

In terms of indigenous, I gave a number for direct employment and ongoing arrangements. The oil and gas industry has been a major employer of indigenous people. It's providing them with one of the highest...in terms of indigenous opportunities for employment. Our figures show that, on average, it's about $140,000 a year in terms of salaries for indigenous jobs. It has closed the wage gap between indigenous and non-indigenous. We're seeing, now, the opportunity to not just move forward with jobs and benefit agreements but also to move towards equity participation in the energy industry. It's leading the country. That's the next generation of opportunity for indigenous communities.

Thank you.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you.

I have only about 10 seconds. I want to set the stage for when I get to the next round. I'll be focusing on clean energy and carbon capture.

Mr. McKenzie and Mr. Sproule, please get ready.

[The Chair, Liberal, George Chahal]

Thank you.

We'll now go to Mr. Simard for two and a half minutes.

Please, go ahead.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

Earlier, Mr. McKenzie, you ended your answer to my question by talking about the competitiveness of the oil and gas sector. If I understand correctly, you're in favour of a carbon tax, as long as it can be combined with the competitiveness of the oil and gas sector.

Currently, in the context of the climate crisis, most large companies are aware that we need carbon pricing, so there's a bit of a lag.

You may have seen my colleague Ms. Stubbs' motion earlier. Some people see carbon pricing as a plague. I heard the Leader of the Opposition say that teachers in Alberta were quitting because schools could no longer be heated. I heard the leader of the official opposition say that nurses in Alberta were quitting because hospitals could no longer be heated. Personally, I wonder whether this verbal outburst is serving the people in the oil and gas sector.

Isn't there a disconnect between the oil industry, on the one hand, which is trying to implement measures like the Pathways Alliance and update its practices to reduce its carbon footprint, and the Conservative Party, on the other, which is even more pro-oil than the industry itself?

[Jon McKenzie]

To be clear, I think what I said is that the carbon tax erodes the competitiveness of our industry and that it's nationally applied as opposed to globally applied.

I'm sorry. I missed the last part of your question. If you wouldn't mind quickly repeating that, I'll answer that.

[Mario Simard, Bloc, Jonquière, QC]

I was simply saying that you seem to have environmental practices that aren't to the Conservative Party's liking.

In short, would you say that you have a slightly higher environmental conscience than the Conservative Party?

[The Chair, Liberal, George Chahal]

Give a short answer, Mr. McKenzie, because we're out of time.

[Jon McKenzie]

I think that the Canadian oil industry is one of the most heavily regulated industries in Canada and produces some of the most responsible oil that's produced globally.

We've had a Conservative government here in Alberta for decades. If we go beyond carbon to look at fresh water use, land reclamation and aboriginal reconciliation, among other things, I think that this industry is leading the globe in terms of sustainably producing barrels for the international market.

[The Chair, Liberal, George Chahal]

Thank you, Mr. McKenzie.

We'll now go to Mr. Angus for two and a half.

Go ahead, please.

[Charlie Angus, NDP, Timmins—James Bay, ON]

To put this meeting in perspective, it was called to look at why the government gave $34 billion of taxpayers' money so your industry could massively increase oil production, which you're determined to do, and massively increase fossil fuel burning in total disregard of science and Canada's global obligations.

I expected better, honestly, yet you came here and both of you said not a single word about climate—not a single word. When you were asked about it, you gave us this impression that you didn't really know, you didn't understand if there was any connection at all, and that we were all in this together.

No, we're not all in this together. This is your industry doing this. We have now 86-plus lawsuits coming in from Chicago, Colorado and California about what you knew and when you knew it.

I'd like to ask you, this Mr. McKenzie. I'll read you the California indictment. It's fascinating. I'm sure you should read it.

It said:

Defendants could have refrained from undermining the global effort to mitigate the impacts of GHG emissions, or contributed to... practical technical strategies...that would have allowed them to continue their business ventures while...supporting a transition to a lower-carbon future.

Meh, you weren't going to do that. Am I right?

It goes on:

Instead, Defendants devoted significant efforts to deceiving consumers, lawmakers, and the public about the existential hazards of burning fossil fuels....

It said that you knew back in the 1970s and 1980s the exact kind of catastrophe that our children are living now.

Here you are again. This is like the big tobacco moment. You could come here and you could say, “Yes, we have a responsibility. Yes, we're going to mitigate.” No, you're blowing smoke in our faces, saying you're not going to want an emissions cap and saying it's the public's responsibility to work with you if we want to lower emissions. You won't even release your environmental reports. You're keeping them secret.

It's a simple question: What do you say to my children, your children and our grandchildren who are going to live on a burnt planet because you were too busy making money hand over fist to even come and take responsibility for addressing the crisis that your industry caused?

[Jon McKenzie]

I think—

[Shannon Stubbs, Conservative, Lakeland, AB]

Wow.

[The Chair, Liberal, George Chahal]

Mr. McKenzie, I'll say just a short answer.

Go ahead.

[Jon McKenzie]

I think what we've said, Mr. Angus, is that we recognize we're 25% of Canadian emissions, and we've given, through the Pathways Alliance, we think, a path forward on how we can reduce that.