Thank you very much for the invitation to give testimony on the critical need for Canada to increase its energy exports, an absolute imperative for both our energy sector and Canada at large.
I'm going to apologize in advance if some of my remarks seem overly blunt. I am no politician, but it's time for someone to finally speak the unvarnished truth on this topic.
I come before you with an urgent call to action. We live in a world where the demand for oil continues to set record highs. Late last year, the International Energy Agency stated that under its base scenario, the demand for oil will grow until at least 2050.
Despite decades of future demand growth, the world is hurtling towards a supply crisis. In 2012, oil production from U.S. shale began its ascent. Since then, U.S. shale has accounted for 117% of total non-OPEC production due to production falling in other countries, making it by far the single-largest source of incremental barrels of the past decade plus. Importantly, it's estimated that due to geologic maturity and investor demands, U.S. shale production has now peaked.
What does this mean? The rise of U.S. shale was extremely destructive to the oil market, resulting in several price crashes, an exodus of investor interest and ultimately a meaningful drop in spending on exploration and long-lead development projects. As a result, not only is the United States' oil production forecast to peak this year, but so too is total non-OPEC production, with 75 of the 79 non-OPEC countries now in permanent decline.
Why does this matter? It's because non-OPEC production accounts for a staggering 68% of the global oil supply. Normally, this would not have been the profound challenge it is, as OPEC has historically had meaningful excess spare capacity, offering a form of insurance against declines elsewhere. This is no longer the case.
Since April of last year, OPEC has unwound most of its curtailed production that was shut in during the demand shock of COVID. Similar to non-OPEC countries, it has not been investing in meaningful incremental capacity. We estimate that OPEC only has 1.5 million barrels per day of excess spare capacity, which amounts to a meagre 18 months of demand growth.
The world has never before faced the energy challenge it faces now. Given an incremental 19 million barrels of demand growth by 2050, accelerating decline rates from existing fields, peaking U.S. shale, peaking non-OPEC production and imminent exhaustion of OPEC spare capacity, I pose this simple question: Where will the necessary future production come from?
This is where Canada comes in. Canada is gifted with the fourth-largest oil reserves in the world, and it produces 5.5 million barrels per day to the highest environmental standards anywhere on the planet. We have nothing, and I repeat nothing, to apologize for. This production benefits all Canadians, from coast to coast, through royalties and taxes. Canadian Natural Resources, Suncor and Cenovus—Canada's three largest oil companies—collectively paid $16.9 billion in royalties and taxes in 2025. This compares to $16.2 billion in taxes paid in 2025 by Canada's six largest banks.
Despite this windfall, we have for the past 10-plus years purposefully and intentionally practised economic self-flagellation, inhibiting our oil and gas sector with penalizing legislation and excess costs, all rooted in energy ignorance and a misguided notion that Canada can play a pivotal role in lowering global emissions. No other country in the world would do this to itself, and all we have accomplished is to willingly cede market share to other countries—many of which have far lower environmental standards—at a profound economic cost to us. This insanity must end.
What should we do? Canada today has modest excess pipeline capacity and, through several expansion projects, will increase pipeline capacity by up to 770,000 barrels per day by 2030. This is not enough. It is crucial to maintain excess pipeline capacity, as the price of all 5.5 million barrels per day of production is set off the one marginal barrel: one barrel of production more than pipeline capacity and the price of all 5.5 million barrels per day falls.
We are now up against the clock, as it is estimated that it will take at least eight years to build a new major pipeline, taking us beyond the 2030 time frame and risking a repeat of widening price differentials that would significantly impact revenue, royalties and taxes. We estimate that a single pipeline of one million barrels per day would generate an additional $5 billion in new royalties every year. This would be enough to hire 13,000 new doctors and provide health care to almost 17 million Canadians.
Eight-hour wait times with our children in an emergency room is a choice. Failing and inadequate infrastructure is a choice. Neighbourhoods—such as mine in Toronto—getting burglarized on a weekly basis due to insufficient police budgets is a choice. We do not have to live like this.
We have an enormous opportunity in front of us. To seize it, all we need to do is recognize one inalienable truth: The world needs more Canadian energy. With the looming supply crisis in the years ahead, we are one of only four countries that can rise to meet the call in a world where, despite what we are told, not a single purchaser of oil cares about a barrel's carbon footprint, but rather its affordability, availability and reliability.
More Canadian oil production means a higher quality of living for all of us. To not recognize this generational opportunity and to continue to impair our industry by not making new pipelines an urgent national priority backed with action versus more talk would be the equivalent of economic treason.
Thank you.