Natural Resources Committee on March 21st, 2023

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Thank you, Mr. Angus.

As you know, all investments, no matter their value, are subject to review under the Investment Canada Act. Paper Excellence's acquisition of Resolute was subject to the national security review provisions under the Investment Canada Act, and Canada's lead security agencies were consulted on the transaction.

Recognizing the need to ensure this investment continues to be in Canada's best interests, as part of the review process the investor had provided meaningful commitments to Canada, which include ensuring strong levels of investment, facilities in Quebec, maintaining existing patents, maintaining Canadian participation on Resolute's board and senior management team, and adhering to Canadian employment and environmental laws.

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

I find that interesting, because let's look at Northern Pulp in Nova Scotia, where the company was given an $85-million holiday from paying the money they owed to the people of Nova Scotia. They failed to pay $2.5 million in special pension payments. In December 2021, they launched a lawsuit against the people of Nova Scotia to the level of $450 million for “indemnified losses” because their plant in Boat Harbour was shut down due to pollution. A report recently said that Northern Pulp's mill there exceeded the federal threshold of emissions by 100,000%. I've never heard that number used anywhere.

How could a company that is suing the people of Nova Scotia, that has such a bad environmental track record, assure the federal government that they are going to abide by all of Canada's laws and be good corporate partners?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

As you know, the Government of Canada was very much involved in enforcing the provisions that actually led to the decision to shut down that plant because Boat Harbour was so polluted.

As I say, with respect to this particular investment, it was reviewed under the Investment Canada Act, there were a number of provisions that they had to prove to the relevant authorities, including the security agencies, and again, those procedures were all followed.

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

Would you say then that the review looked into their connection to the Asia Pulp and Paper company? There are serious questions about Asia Pulp and Paper: human rights violations, environmental damage, even accusations of murder against human rights activists.

The connection between APP and Paper Excellence seems to be that they're the same family, the same people, and the allegation is that this is set up as a “fibre grab” for Chinese mills backed by Chinese bank state financing.

Can you confirm whether or not the connection to Asia Pulp and Paper was investigated?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

What I can say to you is that all the relevant avenues under the Investment Canada Act were followed by the various agencies. As you will know, the Investment Canada Act actually resides under the Minister of Innovation, Science and Industry, not the Minister of Natural Resources.

As I understand it, Mr. Angus, you actually have put on notice the idea that the committee have a look at that, and that is certainly within the committee's purview.

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

I fully understand. Thank you, Minister, for that. It is the other minister's responsibility for the review. My concern is 22 million hectares of Canadian forest, fragile forest. This is something that all Canadians have a great stake in.

I'm wondering if you can tell us whether or not Jackson Wijaya Limantara is a Canadian citizen? Is he a permanent resident of Canada? We're looking into this guy. It seems that he's all part of the Wijaya family, which has a value of $10.8 billion, one of the wealthiest families in Indonesia and sole shareholder of the Sinar Mas Paper China Investment Corporation. They own 100% of the shares of all the seven Asia Pulp and Paper mills in China.

Can you tell us whether or not this man is living in Canada, or is this business being run out of Shanghai?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

I would say I certainly agree with your point that it is important for Canadians to understand the ownership of Canadian forests in the same way, and also to ensure that we are very thoughtful about the acceptance of Chinese investment. As you noted, we actually turned down three companies that were raising money in the critical mineral space from Chinese state-owned enterprises.

These are all the questions that obviously the national security folks would have looked at under the Investment Canada Act, but as I say, the committee is certainly within its purview to look to seek more detail from the relevant authorities.

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

One of their former managers at the APP Shanghai office says that their takeover of our Canadian mills is a “fibre grab” and that “They want to keep the perception that Paper Excellence is an asset of Canada for Canada and by Canada, but in reality, it's a feeder for the Chinese machine.”

Given the situation that we're dealing with right now with political uncertainty with China, can you confirm whether or not you will be looking into this matter?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

I think this certainly is a matter that the national security agencies and the relevant minister have been looking at, yes.

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

Thank you very much.

[The Chair, Liberal, John Aldag]

We're out of time on that round.

Next we have a couple of five-minute rounds. First up, I have Mr. Falk.

If you're ready, the floor is yours.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Mr. Chair.

Thank you, Minister, for coming to committee.

Last time I was able to ask the officials about TMX, and I want to continue with that a little bit.

For the benefit of folks watching these committee proceedings, I'd just like to give a little bit of background. In 2018, the Liberal government denied the Trans Mountain pipeline expansion. Then they turned around and bought it for $4.5 billion, with the understanding and the comment that to complete this Trans Mountain pipeline expansion would be an additional $7.4 billion.

At the time, there was great concern that they had overpaid for this project. In fact, former Green Party leader Elizabeth May said that the decision to buy the Trans Mountain pipeline will go down in history as one of Canada's greatest epic economical boondoggles.

I did a little research as far as Kinder is concerned just to show that they actually did overpay. Kinder Morgan in that year recaptured all the depreciation and amortization on that project, plus they had to book a $596-million capital gain. In fact, it was so lucrative that Elizabeth May said that Kinder Morgan will be “laughing all the way to the bank”.

I just want to share that the base compensation for Kinder Morgan executives is $400,000, but between 2018 and 2019 the vice-president and chief financial officer received $3.2 million, the chief strategy officer received $7.2 million, the president received $8.8 million, the vice-president of natural gas received $11.9 million and the president of terminals got $9.7 million. The CEO got only $16.9 million between wages and bonuses.

We know the Liberals didn't do a good job of buying it. We know from our last meeting, which was only three months ago, that this project was at $21.4 billion, so it had tripled in price. Today, three months later, we're being told it's $31 billion.

Minister, can you tell this committee when you found out that this project was going to be $31 billion?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Thank you.

I have just a couple of things. First, I should say that the government bought this project because it would not have proceeded otherwise, and it is an important part of the infrastructure in Canada. We certainly don't intend to own it over the long term.

The evaluation that was established at the time was established by investment banks. I am not sure if you're an investment banker, but investment banks actually established the fair value for the pipeline, not the Government of Canada.

The costs have gone up, yes. That is very unfortunate. We've seen costs go up for major projects across the board, but we have had two major investment banks actually establish that we will be able to sell it in the range of what it has cost us to date.

[Ted Falk, Conservative, Provencher, MB]

Okay.

Three months ago, your officials confirmed that the completed project cost would be $21.4 billion. Today we're being told that it's $31 billion.

How, in three months, can a project go from $21 billion to $31 billion? I don't understand it.

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

I think the Deputy Prime Minister was quite clear when she put out the press release—as you know, this falls under her purview—that it has to do with a whole combination of factors, but certainly inflation is part of it.

The costs of major projects have gone up across the board. You would find that if you looked at the Coastal GasLink pipeline, which is a private sector-driven project that actually has seen cost increases not different from Trans Mountain pipeline.

There are range of other things, including accommodations along the pipeline to address indigenous concerns.

[Ted Falk, Conservative, Provencher, MB]

Minister, when did you find out that it was going to be $31 billion?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

That work was going on with the folks at Trans Mountain, who were actually developing that until just before the Deputy Prime Minister announced it.

[Ted Falk, Conservative, Provencher, MB]

Three months ago your deputy minister committed to this committee that it was going to be $21.4 billion. In three months, there's a $10-billion error...?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

If you go back and look at Coastal GasLink, you will find very similar things with respect to a private sector-driven pipeline. This is an unfortunate reality—nobody likes it—of what is happening in major projects right now.

At the end of the day, what Canadians need to understand is whether we will recover the money. Both of the investment banks that we had do the analysis would say yes.

[Ted Falk, Conservative, Provencher, MB]

I got a list from the department of the $8.8 billion between the last estimates of $12.6 billion to $21.4 billion.

Will you provide this committee with a breakdown of the additional $10 billion of expenditures on those?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Again, this does not fall within my purview. If you want to ask the Minister of Finance that question, you are absolutely entitled to do so. It falls within her purview, and it is her decision as to what is publicly available and what is not.

[The Chair, Liberal, John Aldag]

I'm sorry, folks. We're out of time on this round.

We're going to go now to Mr. Chahal, who will have five minutes on the clock.

[George Chahal, Liberal, Calgary Skyview, AB]

Minister, thank you for joining us today.

I'm going to focus my questions on youth across Canada. My first question, Minister, is this: How will NRCan's youth programming contribute to the government's broader goals of investing in the green economy and building a skilled and inclusive labour force across Canada?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

That's a great question. I know you've been an advocate for supporting the skills development of your constituents in Calgary Skyview and across Alberta more generally.

The NRCan science and technology internship program - green jobs is a great program. Often called STIP, it provides funding to employers in the natural resources sector to help hire young and diverse talent while giving youth hands-on experience in STEM and other related fields that support Canada's green economy. Internships and training opportunities created with funding from STIP - green jobs meaningfully advance environmental outcomes in the natural resources sector across Canada.

About 80% of youth who do the program find full-time employment afterwards. We achieve an employment equity target of about 60%, and we work with initial recipients who can successfully serve youth experiencing barriers to employment opportunities. The transfer will provide NRCan with the ability to create 150 additional youth placements in the natural resources sector, for a total of 470 by March 31, 2023.

[George Chahal, Liberal, Calgary Skyview, AB]

Thank you, Minister.

Can you also provide details on the selection process for the additional 150 youth placements in the natural resources sector? How will they ensure that these placements are accessible to a diverse range of applicants?