Natural Resources Committee on Nov. 24th, 2022

[The Chair, Liberal, John Aldag]

I call this meeting to order.

Welcome to meeting number 43 of the House of Commons Standing Committee on Natural Resources.

Pursuant to Standing Order 108(2), the committee is meeting to hear from witnesses on the study of federal assistance for various natural resource industries. Today we're in a hybrid format, and now that we're in session, no screenshots or pictures are allowed.

I have a few organizational points.

Please address your comments through the chair. I will recognize you before speaking. For those participating by video conference, you will need to activate your microphone and then mute yourself afterwards.

There's interpretation available for those in the room and online. You have the choice of floor, English or French. Comments should be addressed through the chair. For those in the room, if you would like to speak, raise your hand and I'll acknowledge you. If you're online, use the “raise hand” function.

As part of our routine motions, witnesses have completed the required connection tests in advance of our meeting.

Today we have a number of witnesses. Appearing virtually, we have Thomas Gunton. From Enserva, we have Andrea Hardie. From Environmental Defence, we have Keith Brooks. From the Macdonald-Laurier Institute, we have Calvin Helin and Heather Exner-Pirot. In person, from the Office of the Parliamentary Budget Officer, we have Yves Giroux, Parliamentary Budget Officer, and Philip Bagnoli. Finally, from the Resource Works Society, we have Stewart Muir. Welcome and good morning to everyone.

We'll go right into our opening statements, and first up, we'll go online to Mr. Gunton.

If you're ready, we'll turn to floor over to you. You have five minutes for your opening statement.

[Dr. Thomas Gunton, Professor and Founding Director, Resource and Environmental Planning Program, Simon Fraser University, As an Individual]

Thank you for the opportunity to appear before the committee.

I am a professor in resource and environmental management at Simon Fraser University. I've also held senior positions in various provincial governments, including assistant deputy minister of energy and mines, deputy minister of finance and deputy minister of environment.

I will begin my remarks with a brief overview of fossil fuel subsidies, followed by a more detailed review of the subsidy for the Trans Mountain pipeline. I will then conclude with a few recommendations.

As the committee is no doubt aware, Canada has made a commitment to phase out fossil fuel subsidies at a number of meetings and in the mandate letter for the Minister of Environment and Climate Change. Despite these commitments, we still provide significant subsidies in Canada, with estimates for 2020 ranging from between $4.4 billion and $86 billion. The lower end of the range is an underestimate because it omits a number of subsidies. The upper range includes environmental costs.

While there's a wide variation in definitions and methodologies, these estimates show that fossil fuel subsidies are significant. The evidence also shows that we have not made significant progress in reducing these subsidies. According to the OECD, the subsidies provided in Canada by federal and provincial governments in 2020 were at the highest levels over the last five years. We have rated last, along with France, among the 11 largest OECD countries in terms of reducing subsidies.

I would now like to focus on the Trans Mountain pipeline as an example of a subsidy. The Trans Mountain subsidy is not included in any of the estimates provided. In 2013, Trans Mountain submitted its application to increase the capacity of the pipeline to ship oil from Alberta to Burnaby, British Columbia. It was approved by the federal government in 2016 and again in 2019 after rehearing. In 2018, Kinder Morgan announced that it was suspending construction of TMX due to increasing financial risks. In response, the Government of Canada purchased the pipeline in 2018. When Canada purchased Trans Mountain, the official estimate of the costs of building the pipeline were $7.4 billion. Recently, in 2022, these cost estimates were increased to $21.4 billion.

Currently, the tolls approved by shippers on Trans Mountain are set to cover capital costs of just the $7.4 billion, plus approximately 25% of any additional capital cost increases. What this mean is the toll revenues will not cover the remaining 76% of the cost overruns, which are estimated to be about a subsidy of $10.6 billion to the oil company shipping on TMX. This is a very significant subsidy.

Tolls on other oil pipelines in Canada are set to fully cover costs with no government subsidies. Consequently, providing this subsidy on Trans Mountain creates an unlevel playing field among different pipeline companies and oil companies. It stimulates higher oil production and GHG emissions by reducing shipping costs, and it poses a significant opportunity cost by consuming public funds that could otherwise be used in other ways.

We completed a cost-benefit study of Trans Mountain, including all the costs and benefits to Canada, and our conclusion was that there was a net cost in the range of $8.3 billion to $18.5 billion. That was with the old capital costs. We're in the process of updating that with the new capital cost numbers of $21.4 billion. Those costs to Canada are going to be in the range of $15 billion to $25 billion.

Let me conclude by outlining a couple of recommendations for dealing with fossil fuel subsidies.

First, we need a comprehensive inventory of the value of all fossil fuel subsidies using the WTO subsidy definitions. This inventory should include an evaluation of the subsidies relevant to government objectives, such as reducing GHG emissions.

Second, we need to publish an action plan to eliminate these subsidies. It should include milestones and who is responsible.

Third, we need to provide for independent monitoring and annual public reporting to assess compliance with the plan and identify remedial actions to stay on course. This plan should include the elimination of the subsidy to TMX by directing Trans Mountain, which is owned by the government, to apply to the Canada Energy Regulator for approval of tolls to cover the TMX full cost of service.

I'll conclude by saying that with these measures, we will be able to deliver on our commitment to phase out fossil fuel subsidies.

Thank you.

[The Chair, Liberal, John Aldag]

That's great. Thank you. You're right on the mark at five minutes.

I should have mentioned that I have a handy visual cue system. I'll give you a yellow card when there are 30 seconds left in your statements. The red card means the time is up. Don't stop mid-sentence, but wind up your thought, and we'll move on to the next statements.

Next up we have Andrea Hardie online, with Enserva.

If you're ready to take the floor, I'll start the clock when you start speaking. You'll have five minutes.

[Andrea Hardie, Director, Health and Safety, Enserva]

Good morning, Mr. Chair and committee members. Thank you for the invitation to be here today.

My name is Andrea Hardie, and I'm here in my capacity as the director of health and safety for Enserva, formerly the Petroleum Services Association of Canada. I'm also joined today by Mattie McMillan, policy analyst at Enserva, who is listening in and supporting over the phone line.

I would like to acknowledge that Enserva is headquartered within Treaty 7 in Calgary, Alberta, which is where I'm joining you from today. In the spirit of reconciliation and to better honour Treaty 7, we acknowledge that we gather and work on the traditional territories of the Blackfoot Confederacy—the Siksika, Kainai and Piikani—the Tsuut'ina, the Îyâxe Nakoda nations and the Métis Nation region 3. Our members, their operations and the work of the association occur throughout Canada, and Enserva remains committed to playing our part in reconciliation and growing relationships and opportunities.

Enserva is a national trade association representing Canada’s energy service, supply and manufacturing sector. We are the energy sector’s innovators and solution-finders. The energy industry is a major global economic driver. In Canada, it accounted for 10.2% of nominal GDP—which equates to $219 billion—in 2019.

Enserva helps to unlock Canadian energy by making connections, accessing resources, delivering policy solutions and providing insights that accelerate the energy evolution. Our members provide the energy workforce that the world needs to thrive, with the most responsible and carefully regulated practices in the world. We make the world a better place by reducing energy poverty, empowering energy transformation and creating economic growth and jobs.

Our sector encompasses just under 500,000 workers, and our members and their teams are preparing the energy supply chain to reach our net-zero targets, provide sufficient capacity to ensure the future of energy security and get Canada’s energy where it needs to go. Enserva members are investing in Canada and equipping the next generation of workers with the tools, training and know-how to pursue a long and fulfilling career in the energy sector. Enserva is well positioned to bridge the gap between government, the private sector and the many stakeholders we serve, so we appreciate the opportunity to speak at this committee.

Our internal councils consist of leading industry experts in health and safety; human resources; environmental, social and governance, or ESG; indigenous relations; innovation; and tech, to name of few. This past September, our ESG council launched Enserva’s ESG playbook, a resource that supports our members—no matter where they are on their sustainability journey—to navigate the legal, regulatory and social norms that are rapidly changing in our sector.

Canada is leading the way in ESG best practices, and we're proud of our members’ contributions, from reducing fugitive emissions in the production of blue hydrogen and remediating soil and fill well above regulation and standards to supporting STARS air ambulance and countless other service groups across the country.

Another important initiative for Enserva members is the site rehabilitation program. This program supports the important work our sector has already been doing regarding environmental stewardship and ESG, as it helps accelerate environmental cleanup and creates jobs. With almost $1 billion going out in grants as of October 6, 2022, just in Alberta, the SRP has made an important impact in unlocking Canadian energy, creating jobs and increasing the quality of life for many Canadians. In addition, as of August 31, 2022, the Saskatchewan program has completed over 6,400 well abandonments, over 3,000 flow-line abandonments, 60 facilities and over 11,000 site remediation and reclamation activities, all while maintaining 1,400 full-time equivalent jobs in the sector.

The SRP is specifically for the energy services sector, and during a time when our sector has seen a significant labour crunch, the program has helped keep workers employed in the industry who have the technical skills to provide these services. The people who are completing the SRP work are the same people who will be doing the very technical work in Canada’s energy evolution and are partners on the road to net zero. Investment in them is an investment in our future. These efforts have also enabled business growth among indigenous partners and contractors through direct opportunities and meaningful business relationships.

Enserva hopes to see this program continue, as the SRP cleans up the environment and helps create jobs in Canada’s energy services, supply and manufacturing sector. It is a welcome investment, and we support our indigenous partners in their advocacy to extend the program.

For over 40 years, Enserva has been a strong advocate of Canada’s energy service, supply and manufacturing sector to all levels of government, to our customers and to Canadians. We are a collaborative partner on several government committees and councils across Canada. We also work together with our industry partners on policy initiatives such as regulatory modernization and harmonization.

Just this year, our members are reporting more than 2,000 employment vacancies that we must fill to ensure that both domestic and global energy needs are met. As we know, without a sustainable and diverse workforce that is ready for the jobs of today and tomorrow, our sector's ability to keep up with the global energy demand will no doubt be hindered. We share a common goal of ensuring Canada's energy sector is efficient, successful and sustainable for many years to come.

Thank you, Mr. Chair. I'm pleased to respond to questions.

[The Chair, Liberal, John Aldag]

That's excellent. Thank you for your opening comments.

Next we will go online with Environmental Defence Canada and Keith Brooks.

The floor is yours.

[Keith Brooks, Programs Director, Environmental Defence Canada]

Good afternoon and thank you for inviting me to speak to you today about this important topic. My name is Keith Brooks and I'm the programs director at Environmental Defence.

I just want to acknowledge that I'm sitting in today for my colleague Julia Levin, who is our resident expert on what this committee is referring to as federal assistance for the oil and gas industry and what we generally refer to as fossil fuel subsidies.

As I'm sure committee members are all aware, Environmental Defence tracks fossil fuel subsidies closely. In 2020, we pegged federal subsidies at $18 billion, and in 2021, the figure was $8.6 billion. Federal subsidies in 2022 so far amount to over $18 billion. That's not including the subsidies around Trans Mountain that Mr. Gunton referred to. These are direct transfers to the fossil fuel industry and fossil fuel companies. That's just the subsidies that we can track, because many are not available to the public.

These subsidies include monies allocated to support R and D for carbon capture and storage, money from the net-zero accelerator earmarked to reduce the emissions of oil and gas companies and other funds. Our running tally can be found on our website at environmentaldefence.ca. The full link can be shared afterwards.

Of the $18.4 billion, Export Development Canada has given out $5.96 billion in subsidies in 2022 according to its own figures, and a subsidy of about $12 million has been allocated directly to the Trans Mountain pipeline expansion, $10 billion of which is in the form of a loan guarantee. Canada is very generous in this regard. To put it in context, a report from Bloomberg New Energy Finance found that from 2015 to 2019, the Government of Canada provided $100 million to the fossil fuel sector and raised its level of support for fossil fuels by 40% over those years, which is the second-largest increase among G20 countries. Globally, Canada provides more public financing to oil and gas than any of the other G20 OECD countries.

I know that some of this debate about subsidies gets hung up on differences of opinion concerning what counts as a subsidy and, in some cases, what counts as an inefficient subsidy. It's our opinion that all support given to the oil and gas sector should be considered as fossil fuel subsidies and that fossil fuel subsidies are inherently inefficient.

When it comes to the definition of “subsidy”, we suggest that Canada harmonize with the international community and adopt the WTO's definition of the term. The definition contains three elements. It's a “financial contribution...by a government or any public body...which confers a benefit.” In the WTO's definition, the financial contribution includes grants, loans, loan guarantees and incentives. The WTO says that “the existence of a benefit is to be determined by comparison with the market-place (i.e., on the basis of what the recipient could have received in the market).” A loan guarantee, for example, that's intended to de-risk private equity would clearly fit this bill.

With respect to the question of inefficient subsidies or whether giving tax breaks and other incentives to reduce emissions should be counted, this too has been explored. In fact, the G20 commitment describes inefficient fossil fuel subsidies as those that, among other things, “impede investment in clean energy sources and undermine efforts to deal with the threat of climate change.”

Given the scarcity of capital, a subsidy to oil and gas companies can well be seen as impeding investments in clean energy sources. Otherwise, how else can we explain why subsidies for fossil fuels exceed those for clean energy? They most certainly undermine efforts to deal with the threat of climate change because they make the construction and expansion of fossil fuel infrastructure viable when it would not otherwise be so, and they delay and obfuscate what is actually needed to reduce emissions in Canada and the world, which is to phase out fossil fuels.

Subsidies for carbon capture and storage are extremely inefficient. The Canadian public has spent $5.8 billion on CCUS since 2000. Collectively, these expensive projects have captured only 3.5 megatonnes of carbon per year, which is 0.05% of Canada's greenhouse gas emissions. Furthermore, 70% of the carbon captured has been used for enhanced oil recovery, which is actually increasing oil production, so these public subsidies have likely resulted in more emissions, not less.

I would further argue that fossil fuel subsidies are inefficient in Canada, as they run directly counter to one of Canada's most prominent policies: carbon pricing. Effectively, subsidies for the fossil fuel sector act as a negative price on carbon. Subsidies for cleanup also run counter to the polluter pay principle, which is the foundational concept underpinning carbon pricing in Canada.

I want to make one final point. Canada promised to phase out international fossil fuel finance a year ago at COP26. That's a great thing. Specifically, the agreement says that countries will “end new direct public support for the international unabated fossil fuel energy sector by the end of 2022”.

I think Canada should recognize that its fossil fuel sector is international. We export nearly four million barrels of oil per day. Smoothing the way for domestic oil and gas production intended for export should be viewed as support for the international fossil fuel sector. Indeed, it's Export Development Canada that provides all of these subsidies.

Thank you, committee members, for the opportunity to speak to you today. I will be happy to take any questions when the time comes.

[The Chair, Liberal, John Aldag]

That's great. Thank you for your comments.

Continuing online, we'll go to the representatives from the Macdonald-Laurier Institute. I believe Heather Exner-Pirot, senior fellow, will be giving the opening statement. Heather is accompanied by Calvin Helin, CEO of INDsight Advisers.

When you're ready, you'll have five minutes.

[Dr. Heather Exner-Pirot, Senior Fellow, Macdonald-Laurier Institute]

Good morning, Mr. Chair and committee members. My expertise is resource geopolitics and indigenous engagement in Canadian resource development, and I'll focus my brief remarks on those issues.

To briefly set the context, the COVID pandemic and the Russian invasion of Ukraine have heightened our awareness and concerns about the security of our supply chains. As a top global exporter of oil, gas, lumber, nickel, uranium, grains, oilseeds and other resources, we are being turned to by our allies as “friend-shoring” becomes not only an economic imperative but a security imperative.

Canada is the largest oil exporter of any OECD country, and the only OECD country in the top 10 globally for proven reserves. It is not an exaggeration to say that the energy security of our allies in the decades to come will rely on Canada's continued exports of significant quantities of oil and gas. The consequences of becoming reliant on authoritarian regimes to supply the world with their biggest source of energy are dire, as we are seeing in Europe already.

The programs that NRCan and EDC have to support businesses in the oil and gas industry are important to continue, but as discussed here, Canadians get back much more than what governments put in. According to a recent report by Peters & Co., the oil and gas industry alone will be providing over $50 billion in royalties and taxes to federal and provincial governments in 2022.

As all sides of the political spectrum are committed to reconciliation with indigenous peoples in Canada, one of the best opportunities the federal government has to both address the need to supply more energy and resources to our allies and advance the economic and social well-being of first nations, Métis and Inuit peoples is to provide low-interest, guaranteed loans that enable indigenous people to take equity positions—ownership stakes—in major projects. Doing this can de-risk projects, attract investment and allow development to happen at a faster pace; ensure that indigenous interests are included when environmental, cultural and safety issues are being decided on; and provide stable, own-source revenue streams to those communities. The Alberta Indigenous Opportunities Corporation is an example of such a model, and it has provided significant financial support for the recent equity position in seven pipelines in the Athabasca region by 23 communities, as well as in the northern courier pipeline system deal with eight indigenous communities, also in northern Alberta.

Despite the incredible own-source revenue opportunities in the sector, the federal government has not made such loans available to indigenous people for deals in the natural gas and oil industry. In my opinion, this is an error.

This brings me to TMX. It is widely anticipated that the government will sell TMX to an indigenous consortium when it is completed, something I believe can be transformative in terms of the revenues it will generate and the economic self-determination it will provide. I hope all parties will support a deal when the time comes.

I'll note that my colleague, Calvin Helin, is well placed to answer questions on first nations' involvement and interest in major resource projects.

I also want to iterate that in my opinion, the wrong lesson to draw from TMX cost overruns is that oil and gas is a money loser for Canadian taxpayers. The correct lesson, in my view, is that a pipeline that could have been built for $7 billion 10 years ago now takes well over $20 billion due to our—

[The Chair, Liberal, John Aldag]

I'm sorry, but I'm going to interrupt you for a second. We're picking up an echo that just started. I don't know if you can adjust the boom on your headset perhaps. I want to make sure our interpreters can hear. It just started, so I don't know what happened here.

Okay, it seems a mike in the room might have been accidentally turned on, so I've stopped your time. If you want to try again, we'll make sure that we're cleaned up here so that everybody can hear the audio clearly.

I'll go back to you, Ms. Exner-Pirot.

[Dr. Heather Exner-Pirot]

The correct lesson, in my view, is that a pipeline that could have been built for $7 billion 10 years ago now takes well over $20 billion due to our political, legal and regulatory systems. This is a huge problem that needs to be addressed. We seem to be discussing only TMX because the federal government owns it, but project proponents in the private sector have to deal with cost overruns, regulatory burdens and legal delays all the time. It is a sap on our productivity and prosperity and a barrier to, as Minister Freeland puts it, fast-tracking energy and resource projects that our allies need so badly.

The best assistance the government can provide to the natural resource sector is to reform the regulatory system and make investing in natural resources more competitive and attractive in Canada.

Thank you for your time.

[The Chair, Liberal, John Aldag]

That's great. Thank you for your comments. I'm sorry about that interruption. The last part was good once we got over that little glitch.

Next we're going to the Office of the Parliamentary Budget Officer. Our Parliamentary Budget Officer, Yves Giroux, is in the room.

The floor is yours.

[Yves Giroux, Parliamentary Budget Officer, Office of the Parliamentary Budget Officer]

Thank you, Mr. Chair.

Good day, members of the committee.

Thank you for the invitation to appear before you today. We are pleased to be here to discuss our analysis related to your study of federal assistance for various natural resource industries. With me today I have Philip Bagnoli, advisor-analyst.

Consistent with the Parliamentary Budget Officer’s mandate to provide independent, nonpartisan analysis to Parliament, my Office has released reports on the cost of federal tax provisions related to the fossil fuel sector and the value of exempting agricultural activity from the federal carbon levy, as well as extensive financial analysis of the Trans Mountain assets.

Our report, entitled “Energy sector and agriculture: federal revenue forgone from tax provisions”, which was published on December 7, 2021, in response to a request from Senator Galvez, estimates that resource-specific expense claims by oil, gas and coal mining corporations reduced annual federal tax revenue by $1.8 billion, on average, from 2015 to 2019. Furthermore, the carbon levy exemption for agriculture was worth an estimated $179 million in 2019 when the levy was $20 per tonne. This figure will rise significantly as the levy increases to $170 per tonne.

We would be pleased to respond to any questions you may have regarding our analysis related to the natural resource sector or other PBO work.

Thank you, Mr. Chair.

[The Chair, Liberal, John Aldag]

Thank you.

Lastly, for opening statements, we will go to the Resource Works Society with Stewart Muir, executive director, who is in the room.

Whenever you are ready, please take the floor.

[Stewart Muir, Executive Director, Resource Works Society]

Thank you, Mr. Chair, for the chance to come here from Vancouver to speak to the committee.

Since 2014, the Resource Works Society, a not-for-profit based in Vancouver, has been conducting public interest advocacy. I am a former journalist and was national editor and business editor of the Vancouver Sun. I worked through the Canadian Press with The Globe and Mail and the Toronto Star to streamline business processes in those companies, and I continue my work in this domain. It's a privilege to be here.

The Canadian government really has only so many levers at its disposal to be able to affect what companies do. There are very good reasons to use incentives, which some might call subsidies, in order to exert public policy. We sometimes hear the belief that a dollar deployed in one area equals a dollar withheld from another. We hear this in subsidies all the time. That's simply not how things work.

Let me give you a little example from British Columbia, where $80 billion in upstream natural gas investment was triggered by two billion dollars' worth of subsidies in the form of deep-well royalty credits. Great social and climate benefit was created by bringing this lower-emission fuel to market because of those subsidies. I would challenge anyone to show me a more productive return on subsidy dollars from any sector that is supported in any way by subsidies. That's a pretty good ratio.

Nevertheless, the industry, I feel, has faced an onslaught of opposition on the grounds that the credits were handouts, representing the one-way flow of public funds to private interests for no public benefit, which is really the exact opposite of the truth. When you listen carefully to what corporate Canada is asking for—I'm not here to advocate for them; I'm observing this—they quite reasonably would prefer a hand-up in a highly competitive world and not a handout. You don't see that.

In 2022, more decision-makers around the world are realizing that the simplistic conceptions of energy systems can no longer be indulged if we want to be serious about climate change. I have three examples of this.

In July, the European Union passed the Complementary Climate Delegated Act, recognizing that natural gas power plants are climate friendly. That's their definition. I'm not making it up.

President Biden’s Inflation Reduction Act was passed in August. It's deploying billions of dollars of subsidies to achieve green goals via the private sector. How are they doing this? They're doing it through an enhanced carbon capture tax credit. They're spurring other climate-friendly technologies, such as hydrogen, advanced nuclear reactors, sustainable aviation fuel and many other things. I know the act here in Canada has been applauded by some because it relies on subsidies and has been criticized by others because it relies on subsidies. There you go.

In Egypt last weekend, the final text of COP27 recognized the place of low-emissions energy in climate action. Until now, COP language has been narrowly focused on promoting renewables, which are an important part of the solution but not the complete solution to energy transition. This shift, urged by the International Energy Agency and approved by almost 200 nations, is light on detail at this point and has attracted some criticism. Nevertheless, it's a clear sign of growing awareness that the world cannot wish its way to decarbonization goals by focusing solely on a very narrow band of sources.

Taken together, these three developments signal to me a positive trend for climate pragmatism.

To conclude, I would say that subsidies have their use. They should be seen in perspective. They're not about consumer fuel giveaways. The Ministry of Finance will tell us that we've already flushed out inefficient fossil fuel subsidies, so there's that. Let's recognize that it's market forces—the pursuit of profit—that will be the greatest force of change. That's certainly the Biden dogma.

Numerous factors affect how governments should decide climate and industrial policy via efficient markets. They have many levers at their disposal—emissions reduction, worker earnings growth as a goal, investment conditions, indigenous reconciliation, skills and employment, regional development, energy security, market access, energy reliability and affordability, and availability of alternatives, with the critical minerals and energy metals that are needed, which we can produce in this country for mass electrification. These are all considerations. It's not just subsidies in this very narrow discussion. You really need to broaden it.

A huge increase in low-emissions energy will be needed if the world is to hit climate targets. The fossil fuels versus renewables narrative is increasingly proving to be a difficult and impeding factor in this.

At this time, there's no evidence that a better path exists, if you are serious about climate goals, than to pursue what I've laid out.

[The Chair, Liberal, John Aldag]

Thank you.

We will go right into our rounds of questions. First up is Mrs. Stubbs, who will have six minutes on the clock. Then we'll have three others for six minutes before we go into another rotation.

Mrs. Stubbs, it's over to you when you're ready.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thanks, Chair.

Thanks to all of the witnesses for taking the time to participate in our meeting today. I very much appreciate Heather and Stewart for putting the sector in context.

There will be an ongoing debate around definitions of subsidies versus benchmark tax and fiscal treatment for industries and businesses across the country. However, it is important, if proponents are going to say that all of these fiscal measures and tax treatments count as subsidies, that there be a consideration about the return on investment, value for tax dollars and public good.

Certainly, in proportion, I think the billions of dollars in annual tax revenue to all three levels of government would show a major value in that regard. I invite, in your responses, any opportunity you want to take to expand on those concepts.

As a person who believes in a level playing field and isn't a fan of corporate welfare, I wonder if Stewart from Resource Works and Andrea from Enserva might want to expand on Canada's investment climate for the natural resources sector now, how we are viewed worldwide and whether or not we remain a first-choice country in which to do business in the natural resources sector.

I'll go to Stewart and then Andrea.

[Stewart Muir]

If I may, I would like to provide a little information on TMX, because there's been a lot more discussion on that than I expected. It is quite germane to the question by the member.

I checked in with Trans Mountain management last week—they're based out west—and asked them what's going on with the project. As of October 31, there were 15,800 individuals actively employed in the project. It's going to be four-fifths, or 80%, complete by the end of this calendar year. Over 3,000 Canadian hires came from outside of B.C. and Alberta, which is not a surprise. We also knew that TMX jobs would be distributed all across the country, even in Quebec and Ontario. Over the life of the project, more than 28,000 individuals have worked on Trans Mountain, including 3,059 indigenous persons, I'm told.

Here's a little note from the research I've viewed. The Urban Futures Institute showed that jobs in natural resources create five or six times the impact on GDP, because they create resource commodity exports and contribute directly to them. There's a five or six times greater impact than the average job. These 15,000 individuals have an impact on the economy of 75,000 average workers. When you think about it, that's not a bad return on investment.

In terms of the international focus, why was TMX not able keep a large foreign company as its driver? Why did Ottawa acquire the project? Well, obviously it was a project in the national interest. At the time the decision was made, Canada had begun to see a mass exodus, particularly from the Alberta oil patch. Many international companies had invested in what they thought were the economic strategies being employed in that province, but they realized that those were not going to come about because of policy. Many studies and reports have tried to measure the impact, but I won't attempt to relate those.

Anecdotally, for what it's worth, I think there's a sense that there was a punishing regime for investment. It has maybe passed a bit now. It was stronger in 2017, 2018 and 2019. There was almost a class of workers, young men in particular in Alberta, whose future expectations were crushed. It was hundreds of thousands of workers.

I know that people are puzzled about things like the trucker convoy and where that came from. Well, when you take whole generations of people and suddenly end the things they were aspiring to become, then you have side effects. It's not as surprising for those who observe things closely in Alberta perhaps—not to wade into that issue.

The investment outlook continues to be dampened. I recently travelled to India and Turkey. When people talk about investing in energy in Canada, it doesn't have the level of excitement that it used to. Whether that should be the case is a matter of judgment. I think all you have to do is go to Bay Street. They will tell you what their numbers show far better than I can.

The overall sense in Alberta continues to be that the great wealth and positive impact on environmental performance that can be supplied by the Canadian oil and gas sector have been deliberately forsaken.

[Shannon Stubbs, Conservative, Lakeland, AB]

I think my time is almost done.

[The Chair, Liberal, John Aldag]

Andrea can answer for half a minute, if you want.

[Shannon Stubbs, Conservative, Lakeland, AB]

Sure. I'll go to her, please.

[Andrea Hardie]

I'll jump in for a quick half a minute.

Investments are being hampered in part by the Inflation Reduction Act, with folks finding a better bang for their buck in the States than here, and because of labour shortages and difficulty in getting equipment here, it's just easier to go south. We therefore see more rigs in the American Midwest than in western Canada, and that jeopardizes our capacity for net zero and our capacity to unlock our energy today.

There are tools to improve this, such as flowthrough shares for investors to clean up well sites and grow capital. Other options are government grants and hand-ups, not handouts. They can help monetize our fleets and change the narrative back to Canada's favour.

I'll leave it there.

[The Chair, Liberal, John Aldag]

Thank you.

Unfortunately, Mr. Calvin Helin, we won't get you on this one, but we will maybe get back to you in another round of questions.

Next up we have Viviane Lapointe.

Madame Lapointe, you have six minutes.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you.

My first question is for Ms. Exner-Pirot.

In April you wrote a piece on the opportunities presented from what you called a “nuclear renaissance”. Could you provide this committee with some information on what this opportunity could look like and how Canada should capitalize on it?

[Dr. Heather Exner-Pirot]

Thank you so much for the question. I could talk about nuclear all day.

As you guys probably know, the Athabasca basin in northern Saskatchewan—I'm from Saskatchewan—has probably the richest reserves of uranium in the world, and we have done quite a good job of involving indigenous communities in that. It can really fill the uranium and nuclear fuel needs, for generations and hundreds of years, of our allies and ourselves, so we have this incredible opportunity. I think perhaps there was some opposition or some hesitation from the federal government on nuclear, but not in recent months. Everything that has been coming out of NRCan and out of Canada in the last few months has been very positive for nuclear and has really positioned Canada to be a leader in that space.

In terms of small modular reactors, not only the federal government but also the provinces are leading the way. Private companies are leading the way too. Uranium company Cameco, along with Brookfield Renewable, recently bought Westinghouse, which is a major builder of reactors—small modular reactors as well as regular ones—so there are many positive things happening in Canada in the nuclear space, which I'm very proud and happy about.

The one thing the Americans are doing maybe a bit better than us or differently is supporting some direct subsidies to develop nuclear fuel capacity, especially when we think about energy security and helping our allies get off coal especially and heating oil and move to nuclear. To get away from dependence on Russia—Russia is the biggest supplier of nuclear fuel in the world—it's going to be very important for Canada and our partners to supply nuclear fuel ourselves. The U.S. Department of Energy has been supporting that, and it would be great if Canada could also do that so the supply chain wouldn't ultimately be decided by just the Americans.

[Viviane LaPointe, Liberal, Sudbury, ON]

You touched on the global security of energy sources. Given today's global energy sector, how important is it, in your opinion, for Canada to have its own secure value-added supply chain for critical minerals?