Natural Resources Committee on Feb. 3rd, 2026

[Gaétan Malette, Conservative, Kapuskasing—Timmins—Mushkegowuk, ON]

Thank you.

Mr. Pineau.

[Pierre-Olivier Pineau]

I don't have much to add.

As Normand said, biofuels and biomass are already competitive in some markets. They don't benefit from big players, so we would probably need larger players to be able to structure the market and to make these efficiencies where we need them. As Normand said, in many regions, heating from biomass is good.

Developing heat networks—district heating with biomass—in many places does make a lot of sense, and that is also very good, not only from a competitive perspective, but from a resilience perspective. Also, to foster the local economies and local competitiveness, there's a very good match here.

[The Vice-Chair, Conservative, Shannon Stubbs]

Thank you.

We just went over so that you could finish that thought.

Now we'll go to Mr. Clark.

[Braedon Clark, Liberal, Sackville—Bedford—Preston, NS]

Thank you very much, Madam Chair.

I will be as brief as possible with my one question.

Mr. Pineau, you've spoken quite a bit—both of you have—about the need for electrification and electricity generation. To that end, I just wanted to highlight a major project that's being championed by my home province of Nova Scotia: Wind West. This is a project that represents, at full build-out, up to 66 gigawatts of renewable electricity, which is 27% of our current national demand. It's a tremendous project with incredible potential around interties and all of the things that have been discussed today.

Mr. Pineau, could you just touch on that project in particular and what you think about it? If you're unable to—and I know I'm putting you on the spot with this one—just more generally talk about what your views might be on offshore wind as a potential electricity generation source in the short, medium and long term for our country.

Thank you.

[Pierre-Olivier Pineau]

I think Wind West or offshore wind is very interesting and is a potential we should definitely look at. However, we should look at it from a more integrated perspective: not only from a Nova Scotia perspective, but really from an Atlantic Canada perspective, including Quebec. We should make sure that we have all of the interties so the surplus wind can move to other provinces to the west of Nova Scotia, and then reciprocally, so that Nova Scotia can benefit from the supply from other provinces, because there will still be some hours with less wind. If we look at it in a more integrated manner, then we can optimize these benefits.

So far, we've been unable to have this kind of regional planning in Atlantic Canada, and across Canada in general. We desperately need this more general and joint regional planning, to make sure that these investments are optimally sized and the adequate transmission lines are built.

[Braedon Clark, Liberal, Sackville—Bedford—Preston, NS]

I agree.

Thank you.

[The Vice-Chair, Conservative, Shannon Stubbs]

Thank you very much, indeed.

To that point—that very salient point from the witness—I would just point out that this very committee recommended to the federal government to start with interties in 2017 or 2018, and they've done nothing whatsoever. Thank you for that comment, and thank you to my colleague Mr. Clark for his concluding question.

Thank you to the witnesses for their participation.

I just want to make sure you know that you can also submit input in writing. The committee will need to adopt that into the report if you do that. If there are additional things that you didn't get to speak to, that's an option for you. Of course, the more Canadians participate in these sorts of debates, contributing to the public policy discussion, the better it is for our democracy and the better it is for government decisions, ultimately.

Thank you for all of your participation. Just so you know, you have that follow-up option as well.

[Normand Mousseau]

Thank you.

[Pierre-Olivier Pineau]

Thank you very much.

[The Vice-Chair, Conservative, Shannon Stubbs]

Thank you.

That is all the time for this panel today.

Again, I would just like to thank the witnesses.

As colleagues know, now we will suspend for a few minutes to welcome our next witnesses, and maybe for me to run to the bathroom as fast as I can with my short legs.

[The Vice-Chair, Conservative, Shannon Stubbs]

Without further ado, let me first introduce our two witnesses.

From Canadians for Affordable Energy, we have the Honourable Dan McTeague, who is the president of that organization. From the Macdonald-Laurier Institute, we have Heather Exner-Pirot, director of energy, natural resources and environment.

All witnesses who are appearing virtually have conducted a mandatory witness onboarding test.

I'm going to make a few comments for the benefit of the witnesses. Please wait until I recognize you by name before speaking. For those participating by video conference, as you both are, click on the microphone icon to activate your mic, and please mute yourself when you are not speaking. I remind you that all comments should be addressed through the chair, although I don't get sticky about that.

You'll have five minutes each for your opening remarks, and then I'll open up the floor for questions.

Honourable Mr. McTeague, you have the floor for five minutes.

[Dan McTeague, President, Canadians for Affordable Energy]

What a pleasure it is to be here again, Madam Chair. It's great to see you, as well as my colleagues, who I tip my hat to. I've been where you are, and I can tell you that it's not an easy job, but it's very rewarding, both before and after.

I would also say that I see the setting is a lot better than what we had to put up with 10 or 20 years ago, with plastered walls, some of them filled with asbestos. It seems that the facilities are a whole lot more amenable, and of course we can meet virtually, which I think is just wonderful.

I will make my comments in English, but I'm also able to answer your questions in French. So it's up to you to choose.

In 2024, total Canadian energy exports reached $208.2 billion, accounting for 29% of all Canadian goods exported. In fact, natural resources is the only sector in which Canada has a trade surplus. Oil and gas exports alone totalled $188 billion in 2024, and 94% of that went to the United States. Indeed, 89% of energy exports by value, roughly $184 billion, goes to the U.S. annually.

Canada supplies about 60% of U.S. crude imports, and nearly 100% of all American natural gas imports—and that's a good thing for both sides. It provides jobs, economic vitality and, by stimulating domestic energy industry, affordable energy on both sides of the border—including, of course, the United States and other players that are important to this role. That doesn't mean we shouldn't be looking for other markets to exploit. The more oil and gas we export, the stronger the economy will be right here in Canada.

However, the major limiting factor here is infrastructure. We have recently seen some positive developments on this score. As you know, in 2025, our first large-scale liquefied natural gas export facility, the LNG plant, went online in Kitimat, B.C., enabling us to begin transporting material volumes of LNG to other markets, especially South Korea, Japan and, of course, China. The Trans Mountain expansion, completed in 2024, has provided some tidewater access from Alberta to the port of Vancouver, in Burnaby.

Still, that's a drop in the bucket, and it's difficult to imagine any major changes to this dynamic with Bill C-48, the Oil Tanker Moratorium Act, and Bill C-69, the “no new pipelines” act, which, of course, is still in force.

This is an important opportunity for growth, since hydrocarbon energy provides the vast majority—more than 80%—of the world's primary energy needs, and global demand for these fuels is increasing, not decreasing. If Canada does not step up and supply the hydrocarbon energy for which the world is desperate, it will be supplied by poorly regulated, undemocratic, authoritarian countries that are less environmentally responsible than we are, not to mention less concerned with human rights.

The war in Ukraine has exposed the dangers of overreliance on one despotic trading partner. Most of the nations of Europe would have happily swapped Canadian oil and gas for the Russian products they had to buy. A nation like India—which of course has been very much in the news these days, both in the United States and in Canada—which imports half of its natural gas and nearly all of its oil, is still trying to wean itself off Russian energy. They would be an ideal customer, I think, for Canada and for Canadians, if we indeed had the capacity and the willingness to step in and fill that void.

There would be environmental benefits, to be sure, in doing all this, as well as economic ones, enabling those nations that are still extremely reliant on coal to reduce emissions and improve air quality by transitioning to our natural gas. The fact of the matter is that, if we were to follow the advice of the net zero-obsessed, anti-fossil fuel activists and the “leave it in the ground” mantra, global emissions would increase, along with energy prices, and the Canadian economy would indeed suffer.

Energy is Canada's leading export sector, and defending and expanding our energy exports are necessary for paying down things like our national debt, for strengthening our dollar and for safeguarding our sovereignty. Of course, increasing our energy exports would also enable us to increase our global influence, as well as the energy security of all our allies and trading partners.

Most importantly, it would enable us to bring down the elevated cost of living, which is making it so difficult for Canadians to heat their homes—on a day like today in eastern Canada—to gas up their cars and to pay for the basic necessities of life.

I'm here for your questions. Thank you very much.

[The Vice-Chair, Conservative, Shannon Stubbs]

You're exactly like a pro—right on time. Thank you, Honourable Mr. McTeague.

For the Macdonald-Laurier Institute, Ms. Exner-Pirot, you have five minutes.

[Heather Exner-Pirot, Director of Energy, Natural Resources and Environment, Macdonald-Laurier Institute]

Thank you, Chair, and thank you, committee members, for the opportunity to speak to you today.

This topic of energy exports is critical to Canada's economy and to its global influence and power, and it's essential that we better position ourselves for success.

Canada is a world-class energy producer with well over a century of reserves of oil, gas and uranium. To reiterate what Mr. McTeague said, Canadian energy exports are worth over $200 billion, about 90% of which is oil and gas. According to NRCan, oil and gas comprised 26% of Canadian exports in 2024.

I will focus my remarks on oil and gas, but I would be pleased to further discuss uranium, electricity, propane and coal during questions. I would just note that Canada has recently become as likely to import electricity as to export it, a stunning and unfortunate turn of events, and this state of affairs deserves much more attention.

Until 2024, Canadian oil and gas exports went almost exclusively to the United States via pipeline. It is only with the start-up of the Trans Mountain pipeline and LNG Canada that we have become a global rather than a regional exporter.

Although the cost overruns of TMX are well known, the pipeline itself has proven its worth again and again. It narrowed the differential, or the price difference, between WCS and WTI crude oil benchmarks by about six to eight dollars a barrel, adding billions in revenues, royalties and taxes, even before accounting for the additional volumes we've been able to send to global markets. Those additional volumes are significant.

Although Trans Mountain has not been in service for even two years, it is already running very full. Last week, it ran at about 825,000 barrels a day, or 92% full. This is despite very high tolls for Trans Mountain, which are more than double the cost of sending crude to the Midwest. Recent data shows that tolls were about $14.40 a barrel from Edmonton to Westbridge, in B.C., but only $6.60 from Edmonton to Flanagan, Illinois.

Our crude oil exports to the United States have now dropped from what used to be an average of about 97% of the total to just 84%. China counts for about 10%, with the remainder going to other countries, including Spain, India, Hong Kong, Singapore and South Korea.

It's clear from Prime Minister Carney's and Minister Hodgson's recent trips to China and India that there's an appetite for more Canadian oil and gas in Asia, and that this will be key to any trade diversification strategy we advance.

Canadian oil and gas producers are world-class operators and will incrementally grow production and global market share when they get new pipeline space to fill. The situation today is relatively healthy. LNG Canada has started up its second train very recently and is still ramping up exports. Cedar LNG, Woodfibre LNG, Ksi Lisims LNG and LNG Canada phase two are expected to reach a final investment decision in 2026.

For pipelines, the immediate focus is on expanding what we already have. Enbridge has already announced the optimizing of its main line to the United States of up to 400,000 barrels a day over two phases. Trans Mountain is planning an expansion of up to 360,000 barrels per day. Coastal GasLink was built to already accommodate LNG Canada phase two.

We need two new pipelines in the medium term. The first is the Prince Rupert Gas Transmission, which is already approved and on the Major Projects Office list. It is intended to serve Ksi Lisims. We can sequence that pipeline building in northwest B.C. by planning to build the west coast oil pipeline, which Alberta is leading, right after PRGT is finished. That means we must get our ducks in a row now. We don't need a new million-barrel pipeline today or tomorrow, but we will need it around 2031 or 2032, and that absolutely means that the planning and execution must start now.

Alberta and Canada should take the necessary steps to develop a route, submit a project, conduct the duty to consult, clear initial legal and regulatory hurdles and financially de-risk a new oil pipeline through indigenous loan guarantees, to the point where a private proponent feels confident that the pipeline can be built in Canada in a reasonable amount of time and that we are once again a safe place to invest capital.

Private proponents must consider Canada safe to invest in for upstream production as well, in order to fill these new oil and gas pipelines to reach new global markets. Although the rhetoric and focus on being an energy superpower are much improved, there are mixed signals coming from the policy side: for example, in methane regulations, carbon pricing and indigenous consent. These need to be addressed for us to meet the lofty goals Prime Minister Carney has set for us as a nation.

Thank you. I look forward to questions.

[The Vice-Chair, Conservative, Shannon Stubbs]

Thank you, Ms. Exner-Pirot, and thank you to both witnesses.

I feel a bit awkward about this, but if colleagues will consent, I will lead the first round of questions. Claude, you can time-check me. The clerk will keep me on track.

Thank you. Let's start.

Thank you to both witnesses for being here today.

Why don't we start off the top with a point both of you made about the necessity of infrastructure in order to stimulate investments so that products can actually be shipped?

I'd invite you both to describe the approach to energy development in Canada by this same government during the past 11 years, and exactly why no private sector proponents are willing to propose intergovernmental, interjurisdictional pipelines for export—two proponents did, but couldn't see the way to the end of the regulatory system.

Could you please explain why the government regulatory framework is absolutely, inextricably linked to a private sector proponent's determination of a business case?

[Heather Exner-Pirot]

I can start.

You're exactly right. There isn't a business case for a private proponent to build an export oil pipeline to the west coast.

People build pipelines every day in this country. There's a business case to build pipelines, and there's a business case to expand pipelines. I think the fact that Enbridge and Trans Mountain are both expanding their oil pipelines indicates that there is indeed a case for growing oil production and exports.

Also, we are likely to get FID for Prince Rupert Gas Transmission. We will be building a new export pipeline. It just happens to be natural gas and totally within British Columbia, which means that it isn't under the regulation of the Canada Energy Regulator.

However, for oil pipelines, the cancellation of northern gateway after it had been approved, when it needed a few more conditions met, was absolutely the biggest red flag you could send to the international investment community. It told them that Canada was not a safe jurisdiction, that it had a risk premium and that you'd be better off putting your money anywhere else.

Then Trans Mountain's ballooning costs and all the legal issues that happened and the delays that were easily imposed—the blockades and all that—again told capital that we are not a safe jurisdiction to put their money into for an oil pipeline. No CEO would go to their board and say, “Hey, we're going to invest $20 billion or $25 billion into an oil pipeline in Canada”, with—as Dan pointed out—Bill C-48's oil tanker ban still in place. Without some assurances, some signals, who is going to put money into a pipeline when an oil tanker ban is still in place?

B.C. is again signalling that they intend to use their powers to do what they can to frustrate it, even if they don't have the power to stop it. It's very important, and we've seen this happen with LNG, where there was political alignment. You did get the political signalling from both B.C. and Ottawa that this was encouraged. As a result, you are seeing progress, you are seeing construction and you will see FID. We need to see that same level of support on regulatory certainty for the oil pipeline side.

[The Vice-Chair, Conservative, Shannon Stubbs]

Mr. McTeague, maybe you can comment—and you can as well, Heather.

There's been much talk about fast-tracking Bill C-5 to build projects at speeds never seen before. At the back of that bill is a list of laws and regulations that the Liberals admit block building, because they want to create a workaround. Now we have a scenario of politicians recommending projects to politicians, while the government refuses to define the national interest. They have an MOU, but nothing at all has actually happened. There will be a conditional approval, probably some time later, with major pieces still undone while nothing at all has happened.

You may want to make comments about whether or not this government is actually focusing on fundamentals that need to be fixed for every private sector proponent. There are more than 60 of them across natural resources that are stuck in front of federal regulators right now. Maybe you can comment on whether or not the Liberals have actually effectively fixed the problem that they themselves have created.

[Dan McTeague]

Notwithstanding, I think the mixed signals that the government has given really confuse.... I don't know of any other country in the world that has the energy prowess of Canada—the third-largest or fourth-largest approvable reserves in the world—that is required to decarbonize before it's able to get infrastructure built or to get products to market. We impose this on ourselves. While it might be interesting and very important in certain corners, it is leaving market and capital with an absolute, definable decision on Canada: that it's too risky.

You know, I worked with GasBuddy during the period of time when the B.C. government took the position of using every tool in the tool box to block the Trans Mountain pipeline. Kinder Morgan, a company that was prepared to spend $6 billion out of its own pocket to build a pipeline that we desperately needed, was chased away. As a result, you and I wound up picking up the tab, $32 billion to $50 billion, based on a number of estimates.

The reality is that if we continue to say, in condition, the way in which we're prepared to build infrastructure in this country, no one is going to be interested in doing this, save the Canadian government. The last time I checked, our financial situation is, to put it very bluntly, very weak. To suggest that somehow we should be trading away our most important, most valuable golden goose under the idea that we can't do these things, that we shouldn't be doing these things, is a negative to the Canadian economy and the people who are looking for work today.

Governments have a real problem with balancing their books in the way my government, in the time of the 1990s, knew how to balance a book and understood very well the importance of building pipelines, building our energy infrastructure. Yes, that was the Jean Chrétien-Paul Martin government, of which I was a member.

[The Vice-Chair, Conservative, Shannon Stubbs]

Thank you.

Even though I have 97 more questions, that's time for me.

We will move on to the next questioner, who is Mr. Hogan.

You have six minutes.

[Corey Hogan, Liberal, Calgary Confederation, AB]

Thank you very much, Madam Chair.

Thanks to our witnesses as well.

There is, of course, a growing opportunity. You and other witnesses have talked about how energy has become an increased part of Canada's exports, which I also want to flag. It doesn't really suggest that exports are in decline in the energy sector, but we also need to be thinking about where the market is going. I do believe that, even in a world that uses less oil, demand for Canadian oil can continue to grow.

I worked on the northern gateway project. I worked on the energy east project. I worked on the TMX. I do think we need to be pretty honest with ourselves here. There are absolutely regulatory efficiencies to be found, and those need to be resolved. However, there are also fundamental economic challenges. We're talking about going west over the mountains or going east over an entire country—greenfield construction. These are not the most economic solutions available to our oil and gas sector. This is a north-south continent. I mean, you see it in the pad system and in existing infrastructure.

Ms. Exner-Pirot, you talked about tolls. It is challenging to say, “Go build something that is less economic, and then we are going to toll you on it.” Here is my quandary: Free markets are naturally going to gravitate towards that north-south market integration and that infrastructure. How do we incentivize east-west infrastructure, and how do we incentivize export infrastructure without badly distorting the market?

Maybe we can start with you, Ms. Exner-Pirot.

[Heather Exner-Pirot]

Well, that's a great question.

I would say that the northern gateway project was free market-led, and they did make that decision. They did have a route, which was initially approved to go into Kitimat, so there was a private market case to build that pipeline over mountains a few years ago. Enbridge has said itself that it spent almost $1 billion on that; it obviously saw that there was a business case.

Now we're in a different position—to your point—and I think we are asking ourselves, if we don't want to go more north-south.... I mean, I haven't heard anyone say that they want to export less to the United States, but the option of being able to send oil to other markets is obviously very appealing and would give Canada different leverage and a different set of tools in the current geopolitical situation. There's actually a national security case to build to the west coast. The reason we usually talk about the west coast is that Asia is simply a better market than going to the east coast. It's much larger, and it's growing much faster, so there's more opportunity to displace existing producers.

For me, it's obvious that what's happening is that we need to de-risk it to a point where a private proponent could take it to its board to get approved and wouldn't get slammed by shareholders the very next day in the markets. I think what Alberta is doing—acting as a proponent, getting over some initial hurdles, getting it listed with that Major Projects Office, getting it designated as a nation-building project—are the right moves.

I think Alberta could spend a lot of the time doing some of the initial duty to consult, which has to be done anyway, and then waiting for the market to be ready. It's true that, at $61 per barrel in 2026, the market isn't looking for a million-barrel pipeline from Canada. However, we expect that in 2028-29, the market will be looking for those barrels, after the Trans Mountain expansion is optimized and is delivering its additional barrels. Since our Achilles heel is long timelines, it's very important that we, as Ottawa and as Edmonton, do as much legwork as we can to get that pipeline in a position for a final investment decision for a private proponent to take over.

[Corey Hogan, Liberal, Calgary Confederation, AB]

Thank you.

I totally take your point. I think, however, that Enbridge had a lot of sunk costs. It also didn't have the benefit of seeing how much the TMX cost and the complexity of some of the crossings, which gets to the fundamental challenge. We need to be building these things. The Alberta-Canada MOU has a commitment to a west coast pipeline. This is something we need to produce.

I want to flag again that I'm worried about how we do it in a way that doesn't distort the market, because we also want a free market. I worry about exactly what's going to occur without really giving some thought to that.

Mr. McTeague, do you have any thoughts on that?

[Dan McTeague]

Yes, Mr. Hogan. Those are very good points you've made.

I, too, take your point about going south, because, of course, that's where refineries, over the past 20 years, have been reconfigured to take the heavier slates of oil, which Canada is well known for and Venezuela was at one point. Even Mexico was, to a large extent, until it discovered that it had problems with the quality of its oil, in terms of both water and salt contamination.

This also speaks to the need for expanding the markets to meet what the IEA.... It's never been very big on the idea that we need more hydrocarbons, but now it's admitting that, yes, this is in fact going to go up.

The question is, do we have the infrastructure? It's not just the pipeline. Do we also have the advanced cokers? Do we also have the upgraders? The cost that has to go into these things, more than just an MOU, by some estimates.... I looked at the numbers earlier for the costs of carbon sequestration. Who's going to pay for that?

The actual costs of increasing the carbon consideration from $95 to $130 could be an extra $10 a barrel, making Canadian oil less attractive from the get-go, and perhaps explaining why there hasn't been a stampede toward building any pipeline under these conditions.

[Corey Hogan, Liberal, Calgary Confederation, AB]

That is the perfect lead-in to my next question.

In your opening remarks, you said that if we don't produce, the production will come from countries that are “poorly regulated” and “less environmentally responsible”. I'm trying to understand regulation and environmental responsibility. Are they something our customers are concerned about internationally?

[Dan McTeague]

I think they want the lowest price where they can get it, but they also want to make sure that it meets high standards.

We produce a heavy slate of oil that's needed for things like diesel. The United States doesn't produce heavy oil to the extent that we do here in Canada. It's one of the reasons why most of the imports it brings in come from Canada. It's because you can't run your economy without diesel and heavy oil.

To the point about—