Natural Resources Committee on Oct. 21st, 2024

[Mark Maki]

There are many good points and questions there. I'm not sure if I can fit it all in, but I'm going to do my best, Mr. Simard.

Will there be interest in this pipeline from others when it comes time to sell it? I absolutely believe so. Why? It is a strategic route for Canada. There are big infrastructure operators in the country that should be very interested. Some have said they're interested, but they also comment they would like to put some uncertainties behind us, and that goes to my point about being a disciplined seller. If you want to put them in a position to get the most money out of them, you get rid of uncertainties, so that's fundamental, number one. I will come back to that again and again. We have to be a disciplined seller in order to get the money back.

With respect to how the media perhaps views this as one of the worst fiascos, I would wholeheartedly, 100% disagree. This is an important nation-building project. It has improved the pricing for Canadian oil. That's a benefit to the whole country, and it is a big economic positive for Canada, so I think the merits of the project are the same as they always were.

I wish it hadn't cost this much, but that has nothing to do.... You made a comment about management discipline. The unfortunate reality now, when I look at other projects that are proposed for construction in western Canada, is that they cost about the same per kilometre as this one did. That's not a good sign. Something is not right. We need to find a way to do big infrastructure projects more efficiently than we are, because it's going to have an effect on everything, whether it's an oil pipeline, a gas pipeline or an ammonia pipeline for hydrogen, or electricity transmission, which will be critical for the turnover of the economy to a more electrified version.

[The Chair, Liberal, George Chahal]

Thank you, Mr. Maki. We're just over time. Hopefully, you can finish that off in the next round of questioning.

I'm going to go to Mr. Angus for two and a half minutes.

Go ahead, Mr. Angus.

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

Thank you.

I'm going to get a clarification from Mr. Maki, and then I'm going to move to Mr. Campbell.

Mr. Maki, we heard that the shippers think they're paying too much with the discount that they're getting. Can you confirm that?

[Mark Maki]

Yes, the shippers are challenging the level of the toll.

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

And you thought 50¢.... Did you say it should be 50¢ per barrel higher?

[Mark Maki]

Yes.

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

Okay. When we're paying.... They're getting a $13 break, so is 50¢ going to make a difference? We're going to have to run that pipeline for a couple of hundred years to get our money back, aren't we?

[Mark Maki]

No, sir.

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

No? Okay. A lot of people wouldn't believe you, but it's Monday, so I'm feeling really good.

Mr. Campbell, we've been told about the net benefit to this country, and yet when this project was set up, they were going to use 100% non-union labour. They didn't start to bring in trained union labour until they really needed you. How is it that we can be talking about using public money to improve things, whether it's energy or clean energy, but we're not making commitments for good union jobs and good wages? Otherwise, workers and their families are also paying the subsidy for this project.

What do you think has to be done in terms of policy so we make sure that when we put these major projects together, we're setting a proper rate and we're making sure the trained workers who have the skills coming out of the union houses are able to get those jobs?

[Patrick Campbell]

As I set out in my presentation, the unionized labour and the unionized contractors were not engaged in this project until the government got involved. It's important to keep that in mind.

The second piece to keep in mind is that we need to look at energy east as a national pipeline project. TC Energy invested billions of dollars into that project with absolutely nothing to show for it.

We cannot lose sight of the fact that today we have this piece of pipeline infrastructure that is completed to the highest standards anywhere in the world and is now able to get our resources to market. We can discuss the cost overruns as much as you want. We easily could have been here discussing cost overruns on a project that wasn't completed, but this project now is in service. I think it's imperative for this committee to not lose sight of that fact.

Construction costs are high in Canada, but they're high because we pay defined benefit pensions to our members. We pay health and welfare plans to our members. We pay excellent wages to our members. Construction costs are high in Canada because there's an expectation that when people go to work in Canada they get wages that are reflective of the services they bring to the situation.

[The Chair, Liberal, George Chahal]

Thank you.

We'll now go to Mr. Dreeshen for five minutes.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you very much, Mr. Chair.

This has certainly been an interesting conversation this morning with actors who understand what is taking place in the pipeline industry. I'm certainly pleased to hear that.

One of the key things we're talking about is net benefits. We often hear about the political action and the discussion in that regard. Of course, you just mentioned energy east and the significance that it could have had, but it was blocked politically. We have seen the same type of thing when taking energy across the border into the U.S. We know how much that has affected our opportunities.

Finally we get a pipeline that allows us to move a product that means so much to Canadians and allows us to start to realize the benefits from this, and not only to realize the benefits but also to recognize that we are taking the safest and cleanest product and moving it to market, which allows us to replace the type of energy that, otherwise, the world is going to get from different actors.

I applaud the efforts, and I appreciate the fact that we're talking today about the difference between the urban pipeline process and the hopscotching that you have to do in order to get this project done. I think a lot of folks look at it and say, “Well, there was a right-of-way there before.” Maybe it had to be wider. Maybe different things had to happen.

How did things change so much when you went from the traditional pipeline that was built decades ago versus this particular one? I think that's part of the question. Certainly, we didn't have the same type of urban footprint at that time as we do now. What lessons have we learned for the future for that type of project? I think that was one of the other concerns.

I was also concerned when you talked about other infrastructure projects. It is as though we've set the mould and that mould is extremely costly. I'm looking for some thoughts. Hopefully, people such as you can come up with plans for the future so that we can get a little more responsibility.

Perhaps, Mr. Maki, you could speak to some of those comments.

[Mark Maki]

That's a good question and they're great observations.

With respect to lessons learned, there are many on the project. One of the things that we have committed to with the regulator, with the CER, is to do a process like that, to have a sit-down and say, “Okay, what did we learn? What will we do different?” That is a take-away the company has with CER and that is intended for the very near future.

There are definitely lots of learnings with respect to engagement with the communities, indigenous and so forth, along the right-of-way. The absolute importance of the indigenous being a part of any major infrastructure project early, often and throughout, is another key learning.

Going back to permitting and so forth, we need to recognize that there are things that are going to come up that you don't know about that are going to bite you: the COVIDs, the fires, the floods and so forth. How do you respond to that?

There's the importance of having high-quality labour. Again, to the folks on either side of me, they did that. They provided that to the company, high-quality. That's one of the challenges the country faces now. There was a shortage of labour. Throughout the project, we had a lot of people the project execution leader referred to as “green hands”, people who were new to the business. There was an efficiency loss as a result of that. A lot of smart people learned a lot. Those will be skills that will be useful elsewhere, but they were learned on the job at Trans Mountain.

I think there's a lot to be taken from this. Certainly, finding a way to do the regulatory process and being sure about the conditions under which you can execute will be the ones I would expect we focus on at the CER.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you.

Of course, when we're speaking about labour, a lot of those green hands have now learned something. Therefore, when we're looking to the future, we have a skilled workforce that is able to take it on, whether it be pipeline construction or other types. There's a lot of learning on the job that had to take place. A lot of folks I know were involved in the project. Some had vast experience. Others were saying, “This is an opportunity for me to learn. Hopefully, I'll be able to continue to do these sorts of things in the future and make that part of what I've done.”

I have a question that I'm not likely going to get in. I appreciate that.

Thank you very much.

[The Chair, Liberal, George Chahal]

Thank you, Mr. Dreeshen.

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

Give him a red card.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

I saw it.

[The Chair, Liberal, George Chahal]

We'll now go to Ms. Dabrusin for five minutes.

Go ahead, Ms. Dabrusin.

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

Thank you, Mr. Chair.

I'd like to thank all of the witnesses here.

I wanted to make sure, Mr. Maki, about something. I felt like you were trying to finish a thought, particularly when you were responding to Monsieur Simard's question about finding ways to do big projects in a more efficient way. If you have one minute, would you want to say something about that?

[Mark Maki]

There are really a few points to make here. One is the importance.... Canada did step in on a project that otherwise, probably, would not have gone forward. I think that's important to recognize. There are great benefits to the country as a result of that. Again, on the private sector, it would have been good if they were there. They were not, unfortunately, at the time, so Canada did something that was really important. I want to comment on that.

With respect to other major projects and the execution of major projects, whatever it is—power lines, ammonia pipelines, hydrogen transport—all of that is going to need.... We have to find a way to get big infrastructure done in this country more efficiently. Otherwise, we're not going to be competitive.

You can look at the recent IEA study. In there, there is a lot of commentary on the reasons to be optimistic about the future, and there are a whole bunch of reasons to be pessimistic about the future. One of them is where the concentration of rare earths and the production for the technologies for the transition are. They're not here in Canada or North America at all. We have a lot of work to do there to support big infrastructure development, especially on the power side.

Hopefully, that catches the spirit of your question.

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

I appreciate that. Thank you.

Mr. Campbell, would you clarify too, because I was really interested in the part where you were talking about the benefits that go to unionized workers and the fact that, once the government was involved in this project, that's when unions got involved.

Are you aware of what would have been the benefits available to people on the prior plan? What's the difference in the quality of life for the unionized workers who were brought in once the government got involved?

[Patrick Campbell]

With respect to the compensation packages for the other contractors, I'm not aware of what those specifics are. My understanding is that the retirement benefits under those arrangements are of an RRSP-style versus a defined benefit style.

A big element of ours is the investments that come through our collective agreements into training. These are not publicly funded training institutes. These are member-paid training institutes that owner-clients can then access to engage early with indigenous communities to ensure that community members are provided with meaningful training so that they succeed on the project. I'm quite certain those elements are not in those other contractors' spaces.

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

Perfect. Thank you so much.

I thank all the witnesses for their attendance today.

In a previous meeting, I had moved a motion about orphaned wells that we had to adjourn, so I am going to be moving this motion once again. I will add, in prefacing the motion, that I'll also be asking that we dismiss the witnesses.

I move:

Given that:

There are 1,600 abandoned and orphaned oil wells in Alberta—

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

I have a point of order, Chair.

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

—polluting farmland, waterways, and air;