Thank you, Mr. Chair, and good afternoon, committee members.
I represent the Business Council of Alberta, which is a public policy organization of Alberta's largest employers and most successful entrepreneurs.
I'm speaking from the traditional territory of Treaty 7 and the Métis Nation of Alberta regions five and six.
I'd like to speak to four key points: economic value, indigenous reconciliation, trade value and building major projects in Canada.
In terms of economic value, the oil and gas sector is Canada's most productive sector and our most important export sector. It's no secret that this country is struggling greatly with productivity and a lower quality of life for Canadians compared to our peer nations. Therefore, further production and export activity in that sector benefits Canada as a whole. EY estimates that between 2024 and 2043, the expanded Trans Mountain system will pay $3.7 billion in wages, generate $9.2 billion in GDP and pay $2.8 billion in government taxes. The Bank of Canada predicts a 0.25% bump in GDP in Q2 of this year due to the expansion.
The CER estimates that the TMX expansion will close the gap between benchmark oil prices and what Canadian producers receive by about nine dollars per barrel. This will result in more royalties and tax revenue for governments. CAPP notes that oil and gas companies paid $34 billion in oil and gas royalties to provincial governments in 2022, so it is reasonable to expect this figure will grow because of the TMX expansion, which will positively support Canada's finances.
We, as a nation, should be actively working to create more opportunities to grow our energy sector's production and export—not to curtail it with layered policy.
In terms of indigenous reconciliation, as has been noted by previous witnesses, the future of the pipeline could be a watershed moment in righting the wrongs of the past by enabling indigenous ownership of the pipeline at some point in the future. One can look at the opportunities for reconciliation being generated through the Cedar LNG project, which is majority-owned by the Haisla first nation. At the final investment decision announcement, Crystal Smith, chief councillor of the Haisla Nation, said, “Cedar LNG will make the most significant mark on economic reconciliation ever in our country. With Cedar LNG, we have proven that Indigenous communities can successfully forge a path to economic independence and generational prosperity.”
There is opportunity for the TMX expansion, at the right time, to do the same through an indigenous equity ownership position. That benefit will be on top of the incomes generated from the estimated $4.9 billion in contracts with indigenous businesses during the construction phase of the project.
From a trade value perspective, Canada's energy sector made up 23% of Canada's total trade export value in 2023. The expansion creates even greater value opportunity. However, Canada is highly reliant on a single trading partner—the United States. Exports to the U.S. account for 77% of Canada's total export trade value. With uncertainty as to the outcome of the looming U.S. election and for diversification of our trade portfolio, the expansion project provides welcome optionality for our energy products to go to other markets that can diversify our portfolio and reduce exposure to risks such as a downturn in the U.S. economy, energy demand or retaliatory trade measures.
Canada should be doing more to support the export of its natural resources to our allies and other nations in need of them, largely in pursuit of their own decarbonization efforts. Whether it is oil, LNG, propane, ammonia or critical minerals, the expansion can and should be the start of further expansion of Canada's resource export capacity.
In terms of building major projects, Canada struggled to get big things built and the TMX expansion project is illustrative of that challenge. We have a lengthy and uncertain regulatory and permitting process in Canada. It's a process with an inappropriate degree of political involvement. We must fix this so we can be recognized globally as a place that can build large projects quickly, efficiently, safely and to the highest environmental and reconciliation standards.
Our 2023 report, “Future Unbuilt”, addressed many of the changes needed in Canada's regulatory and permitting process. The ministerial working group on regulatory efficiency for clean growth projects' action plan made some progress but did not go far enough. Adding to that challenge, concerns remain that the federal government did not go far enough when it amended the Impact Assessment Act in response to last year's Supreme Court decision. We must use the experience of this expansion project and global best practices to further refine and improve Canada's regulatory and permitting process.
In closing, the TMX expansion is an important project for Canada's most productive sector—the energy sector. Even with cost overruns, it will be a huge net positive for our country. In fact, Canada needs more big projects like this one, and we need to build them faster.
Canada has a chance to globally step into the spotlight and deliver things the world needs right now—energy, minerals, food, wood and more. We must seize this moment for Canadians and for the world. We must improve our approvals process in Canada to allow us to build the right things for the world and build them fast. That will help generate prosperity for Canadians and solve global challenges.
Thank you. I look forward to your questions.