Natural Resources Committee on March 10th, 2026

[Mark A. Scholz]

Thanks, Mr. Hogan.

When it comes to the energy services sector, there are tremendous opportunities to unlock traditional energy sources—oil and gas—which represent 90% to 95% of what we do today. That's the bread-and-butter of our industry, and that will always be the case.

It's interesting that the same technology, the same processes, the same equipment and the same people are easily transferable to the extraction of lithium resources, helium resources, potash or geothermal. We're going to be drilling all the carbon storage wells and facilities. In situ hydrogen is now another opportunity for Canada. You cannot extract subsurface resources without a lot of the same people and equipment from the oil and gas industry moving into those budding and emerging sectors.

When we look at things like battery technology, the lithium that's going to go into potentially Canadian-made batteries is going to come from western Canada. When it comes to helium and our defence industries and our nuclear strategies.... I said in my opening remarks that we do have some fiscal restraints in the Income Tax Act that need to be reformed to allow helium to reach its potential, but that's going to be a huge opportunity for Canada to extract that resource. There is a plethora of opportunities.

At the end of the day, as energy service companies, we are part of both the clean and the conventional energy superpower potential, and we look forward to working in collaboration with the government to deliver.

[Corey Hogan, Liberal, Calgary Confederation, AB]

Thank you.

I certainly agree about the opportunity and that maybe there are some tools that need to be modified to unlock it.

Because we are a little pressed for time, I'm going to give the rest of my time to my colleague MP Danko.

[The Chair, Liberal, Terry Duguid]

Go ahead, Mr. Danko.

[John-Paul Danko, Liberal, Hamilton West—Ancaster—Dundas, ON]

Thank you.

My question is for Mr. Strickland.

You started your comments by talking about how, as representing the building trades, you support the diversification of Canada's energy exports and reducing that reliance on U.S. markets, which is certainly a big focus of the government. Then you talked about leveraging public investment in energy infrastructure. When we're leveraging private capital, make sure that includes local indigenous hiring. You talked about the need for fair wage policies.

I was wondering if you could expand on that and also on how we can include buy Canadian policies when it comes to developing Canada's energy exports.

[Sean Strickland]

Let's start with the second part in terms of buy Canadian. It has to come through procurement. I think there's a similarity between buy Canadian requirements through procurement....

I referenced the TMX pipeline, for example. Much of that pipeline did not come from Canada. Now, there were some issues with respect to the diameter of the pipe and it only being sourced from overseas, but these are the kinds of things that we need to do a better job of in Canada when we're building major infrastructure projects.

There's good news from Bay du Nord, but all the topsides are going to be built overseas. The fact that we had a floating dock out of that is good, but we need to really look at our procurement practices for these major infrastructure projects to maximize that economic benefit throughout the supply chain.

In terms of workers' benefits, our position is that, whenever there's a tax incentive or Canadian taxpayer dollars going into a project, those projects must have a requirement for a prevailing wage, as in Bill C-59. Bill C-59 is working really well. My office has received hundreds of inquiries over the past couple of years asking for the collective agreements.

The point is that, if the Canadian taxpayer is going to provide large, well-capitalized industries with up to 30% tax credits.... On a billion-dollar project, it's $300 million. You had better make sure it's tied to the best wages that are available in the marketplace. That's the prevailing wage. That's the union wage. It doesn't necessarily mean you have to hire 100% union, but if you're going to hire a non-union person, then you pay them the best wages that are available in that market. That's the way in which we can lift people into the middle class. We can provide apprenticeship opportunities and continue this life cycle of leveraging our investments to improve Canadian workers' lives and their families' lives.

[The Chair, Liberal, Terry Duguid]

Thank you, both.

Mr. Simard, you have the floor for six minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

Mr. Scholz and Mr. Strickland, I'm going to explain the slight problem I see, and I'm not acting in bad faith by saying this.

I believe that what the federal government announced, by signing the agreement with Alberta, is a way of passing the responsibility on to the Alberta government and the oil and gas companies. What I'm seeing right now is that few big companies are willing to raise their hands to build infrastructure. That was seen again last week, when people said that the regulations were still too burdensome even though the government was prepared to ease off. That's what is happening with Bill C‑5.

I get the impression that the cost of building this infrastructure makes it difficult to turn a profit, so big oil and gas companies are reluctant to make these investments, unless there's a very strong signal from the government that public funds will be injected. I don't want to act in bad faith by saying this, but I'd like to hear you talk about it.

Mr. Scholz, I know you emphasized that members of your association work in the oil and gas sector and would benefit from infrastructure development. The same goes for Mr. Strickland.

However, I want to look at this in a very realistic way. I wonder if there's a business case for building oil and gas infrastructure without public funds. The signal I'm seeing from the big companies is that they themselves don't seem to believe in that. Beyond the political issue, big companies would have to believe in the model for building oil and gas infrastructure.

I'd like to hear from each of you about that.

[Mark A. Scholz]

I'll start.

First of all, let me qualify that I don't represent the pipeline industry. I represent the drilling and service rig industry. There's no question that our workforce, our members stand to benefit from greater capacity.

What I would say is this: I think the challenge that Canada has, particularly with the west coast pipeline, is that Canada does not have a very good track record for private companies trying get through the regulatory process and being able to satisfy the risk profile. I think Canada has created a huge risk profile that does not give companies the certainty that, if they get the regulatory green light, they can actually get a product to the finish line.

Even though we have made good progress in Canada on things like Bill C-5—and we're starting to take a deep dive on how we set up a good regulatory system for future projects—a company needs to have the assurance that they can get to the finish line, and right now, it's a big question mark for a lot of proponents. There is a tremendous amount of risk.

I think that there is still an opportunity. I think there is a business case for a new pipeline. I think the biggest issue for Canada is the strategic importance of optionality for our products outside of the United States. That's a national interest concern. It's difficult to put that into a business case. That's a Canadian government strategic approach, not necessarily a business case.

I would say that history has dictated to proponents that we have not done a very good job of signalling to the investment community and to project proponents that you can actually get infrastructure built in this country. We have to fix that.

[Sean Strickland]

I would answer that in two ways because you seem to imply...through your question about the nationalization of a pipeline rather than the private sector. We have that already with TMX. I think there are two directions. Like Mark, I don't speak on behalf of the pipeline industry, the oil and gas industry. I speak on behalf of our members and jobs. These infrastructure investments create jobs, so we are very much aware of what's happening in this industry.

TMX, for example, can be expanded and increased in capacity to send oil down to Burnaby. It could also be expanded to send a new pipeline to Churchill, Manitoba and Hudson Bay and have a new terminal in Hudson Bay, a new oil and/or gas terminal. That's a pipeline the Canadian government already owns.

In terms of a pipeline in the MOU to the west coast, as you very well know, we live in a federation, and in order to get big things built in Canada, you need to have the provinces onside. You need it for regulatory approval. You need social licence. You need to work with the provinces to get these big projects through the approval process. That's why it's critically important to have these MOUs. I also see that different provinces are creating MOUs for more infrastructure projects across their provincial boundaries.

As it relates to a new pipeline to the west coast, I think we have to decarbonize our traditional production of oil from the oil sands. Pathways, now the Oil Sands Alliance, has talked about that, and in order to do that—

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Strickland.

[The Chair, Liberal, Terry Duguid]

Thank you. We're at the end of the time, Monsieur Simard. I know we're a little crunched for time today.

Folks, we're going on to our second round.

Ms. Kronis, welcome to this exciting committee that you are now a part of.

Mr. Rowe and Mr. Guay, we're going to have to cut you back to three minutes each.

Mr. Simard, you will have two minutes.

We're rationing time. I know your remarks are of high quality and very to the point, Mr. Rowe.

Please go ahead.

[Jonathan Rowe, Conservative, Terra Nova—The Peninsulas, NL]

Thank you very much, Mr. Strickland, for talking about the Bay du Nord project. My father is part of the carpenters union in Newfoundland, Local 579. That announcement was big. The provincial PC government was able to strike a deal with Equinor and BP to build this project. That's going to bring $6 billion in revenue over its lifespan and additional investment in the floating dry dock, as you mentioned.

What's interesting in this deal is that the construction of the drill ship, also called the FPSO, will be put on tender. People and facilities around the world can put bids on it. The Cow Head facility in Marystown, Newfoundland, has built topsides for these FPSOs in the past. They have built topsides for oil rigs. That site had over 700 union members—high-paying jobs—on its last project.

I want to see that Cow Head facility used for this construction. How can they compete with international markets with the heavy tax burden that we have in Canada?

The Atlantic investment tax credit has up to 10% on equipment and capital for fishing, farming, logging, manufacturing, processing and prescribed new energy generation. At one point, that tax credit applied to offshore oil and gas, but now it doesn't. Do you think that reinstalling that tax credit could increase competitiveness and incentivize these companies to employ hundreds of unionized workers and create high-paying jobs in Newfoundland and Labrador and Atlantic Canada?

[Sean Strickland]

I'm sorry. I don't know enough about the Atlantic tax credit. I remember it being in place a number of years ago. I'm not 100% sure about what kind of results it delivered.

If it is modelled after Bill C-59 and the investment tax credits, I think there's room in the Canadian economy and in government policy to provide tax credits to promote industry, as long as they are tied to good-paying jobs and apprenticeship opportunities.

With Bay du Nord, I know that Trades NL and my colleagues there are quite pleased with the deal. I've been speaking with them this past week. Is it a perfect deal? No. Where do you get perfection in this world? I don't know. It's very difficult to achieve that kind of 100% benefit in that kind of a deal when you're working with these large projects. However, it is much improved over what was originally proposed, where we weren't going to see any of that work in Canada.

The provincial government and Trades NL did a really good job of getting as much of that work back as they possibly could.

[Jonathan Rowe, Conservative, Terra Nova—The Peninsulas, NL]

I did see as well that it's not just Newfoundland that is going to be affected.

Do you think the increased number of high-paying, unionized jobs in the rest of Canada and Atlantic Canada by using Canadian steel, Canadian manufacturing and Canadian transportation would not just impact Newfoundland, but would impact the rest of Canada as well?

[Sean Strickland]

Absolutely. Also, when you look at Bay du Nord and that FPSO—it's basically a big ship that sucks oil out of the bottom of the ocean—it is delivering tremendous economic opportunity to Canada and to the Government of Newfoundland in terms of royalties. There are ongoing maintenance jobs. The knock-on effects from that kind of project are quite substantial.

[The Chair, Liberal, Terry Duguid]

Thank you so much.

Mr. Guay, you have three minutes.

[Claude Guay, Liberal, LaSalle—Émard—Verdun, QC]

Thank you, Mr. Chair, and thank you to all three witnesses. I really appreciate the content of your discussion.

One of the things I appreciate the most is seeing in all three why we aspire to be an energy superpower in both clean and conventional energy. All three of you have touched on the fact that there is opportunity for Canada in both clean and conventional energy.

Mr. Henkel, would you talk about the economic opportunity inside the country and, if you have a little bit of time, the exporting that carbon capture represents?

This is a new area, so I really would like to understand from you how that can help Canada internally and with exporting.

[Brett Henkel]

I'll start with carbon management. It can and will be a very large industry in the future. Some studies out there are saying that carbon management can be as big as the oil and gas industry in the future. There's a lot of carbon to deal with. Canada has the opportunity here to actually build projects in Canada, prove the technologies and create jobs while we're doing it, because we have the expertise here to do it. As the gentleman over here was saying, the skill sets of our oil and gas energy industry are the same skill sets we need for decarbonization. We can do it here. We have the geology. We can prove it here.

The world is demanding carbon management. When you talk to Europeans, it's on the tip of their tongue. They're talking about carbon management on a daily basis. Asia is now going the path of carbon management. Japan, Singapore and Korea are leading the way on carbon management in Asia. Worldwide it is a topic. It is an industry that is going to grow over the next decades. Canada can be a leader in this space. We can create high-paying jobs while we're doing it.

[The Chair, Liberal, Terry Duguid]

You have 30 more seconds.

[Claude Guay, Liberal, LaSalle—Émard—Verdun, QC]

For this industry to expand, do we need industrial carbon pricing to have some level of certainty?

[Brett Henkel]

Absolutely. I believe so. We need industrial carbon pricing. Certainty is the key, right? It has to be. Let's start with something. Let's be certain about it. Let's send the signals to industry. Then industry will move. The worst case is where it's unknown and just talked about. There's no certainty. Well, then, nobody can move. We need certainty.

[The Chair, Liberal, Terry Duguid]

Thank you, both.

To end this round, we have Monsieur Simard for two minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

I want to follow up on that, Mr. Henkel.

Something seems to have been misunderstood, or there's a misunderstanding between the industry and the people who want to develop carbon capture and sequestration technologies.

From what I understand, it's impossible to implement carbon capture and sequestration strategies without a price on carbon. However, people in the industry don't seem to want a price on carbon. It's a bit like the snake eating its tail.

Why, then, invest massive amounts of money in decarbonizing oil if there are no incentives to do so?

I say this in good faith: Sometimes, it gives outsiders the impression that it's more of a sales hook. Some people will present that as greenwashing rather than a genuine desire to decarbonize the sector.

I'd like to hear your comments on that.

First, do you agree with a price on carbon?

[Brett Henkel]

Yes. I agree with the price on carbon. I do believe industry wants to decarbonize and to have a price on carbon, because the energy industry needs investment. It needs global investment. Global money is increasingly carbon-hesitant. It wants to see a decarbonization plan for investing in oil and gas and energy. That's why industry here in Canada wants this in place. They want, in general, a carbon price so that they can move forward and show the rest of the world that we're expanding energy exports but we're also putting a plan in place for decarbonization.

Does that make sense?

[The Chair, Liberal, Terry Duguid]

That makes sense.

Thank you, witnesses, for your presentations and for the great dialogue we've had over the last 45 minutes. We packed a lot in there. We're grateful for your presence.

Colleagues, we will take a five-minute recess. Then we will be back with our second panel.