Natural Resources Committee on April 16th, 2026

[The Chair, Liberal, Terry Duguid]

Colleagues, happy Thursday afternoon. I'd like to call this meeting to order.

I'd like to acknowledge, as we always do, that we are on the unceded territory of the Algonquin Anishinabe nation.

Welcome to meeting 32 of the House of Commons Standing Committee on Natural Resources. Today's meeting is taking place in a hybrid format.

I would like to welcome MP Leslie Church to our august committee. Claude just said that it was an upgrade.

We also welcome, as we always do, MP Jonathan Rowe. He's an associate member of the committee, but we see him regularly.

It's always nice to see you, Jonathan.

Let me remind participants of the following points. Before speaking, please wait until I recognize you. For those participating by video conference, click on the microphone icon to activate your mic, and please mute yourself when you are not speaking. For those on Zoom, at the bottom of your screen, you can select the appropriate channel for interpretation: floor, English or French. For those in the room, you can use the earpiece and select the desired channel. I will remind you that all comments should be addressed through the chair.

Pursuant to Standing Order 108(2) and the motion adopted on Thursday, September 18, 2025, the committee shall resume its study of Canadian energy exports.

I would like to welcome our witnesses. From Commodity Context Corporation, we have Rory Johnston, founder; and from Studio.Energy, we have Peter Tertzakian, founder and chief executive officer. All virtual witnesses have conducted a mandatory witness onboarding test.

You will each have five minutes for your opening remarks, after which we will open the floor to questions.

We're going to start with you, Mr. Johnston. You have the floor for five minutes.

[Rory Johnston, Founder, Commodity Context Corp.]

Members of the committee, thank you for taking the time today to discuss the critical topic of Canada's energy export opportunities at the most energy insecure moment, globally, in a generation.

My name is Rory Johnston, and I'm an oil market analyst. My comments today and the expertise I hope to share with the committee relate to the position of Canada within the global oil market and the specific structure of Canada's current oil trade.

Canada is a global energy superpower. We are a top five producer, exporter and reserve holder of oil, but unlike other global energy superpowers, like the United States, Saudi Arabia and Russia, virtually all of our oil exports go to a single market—the United States. Whereas, other energy superpowers sell the bulk of their product to open, and thus optional, seaborne markets, the vast majority of Canada's energy exports go to market via fixed pipelines. In other words, our products are currently locked into specific geographic markets, most notably the U.S. Midwest.

Canada's dependence on pipelines has often resulted in existential crises for the oil and gas industry. When western Canada's production outstrips available pipeline capacity, it can trigger years of wider differentials, in this case the discounts, for Canada's primary heavy crude export blend, Western Canadian Select, or WCS, relative to U.S. benchmark WTI. This discount normally sits between $10 and $15 a barrel in Hardisty, Alberta, but indicatively hit an all-time high of roughly $50 a barrel in late 2018, which prompted the Alberta government to temporarily curtail provincial production in order to reduce competition for increasingly scarce egress.

The availability of ample and reliable egress is the single most important factor underpinning the competitive position and continued success of western Canada's oil and gas industry. Without sufficient egress, we can expect ever-larger discounts borne by Canadian barrels or permanent curtailment of Canada's largest export industry. It's critical to emphasize that the devaluation of Canadian oil exports caused by differential blowouts doesn't apply only to barrels stranded in the basin, but to virtually every barrel produced in western Canada. As such, differential blowouts have an outsized impact on provincial government royalties, investment intentions and ultimately employment in the sector.

There are multiple potential paths of Canadian pipeline expansion. At present, we have the MOU for the west coast oil pipeline, championed by the Alberta government, expansions to the Trans Mountain pipeline system and Enbridge Mainline system, and the most recently floated Bridger expansion pipeline in the United States that would connect to legacy Keystone XL pipeline segments on the Canadian side of the border. Expansions like those proposed on Trans Mountain and Mainline are poised to expand egress capacity by 300,000 to 400,000 barrels a day each, with a cost measured in single-digit billions of dollars. The greenfield pipelines are notably more expensive and complex.

The path of least economic resistance will likely further entrench dependence on the U.S. market. If the prioritization of these expansion opportunities is left entirely to the oil and gas industry alone, there is great potential to favour options that maximize netbacks—typically the capacity with the lowest per-barrel cost—over options that maximize strategic value.

However, the U.S. market is less and less risk-free. For most of the history of Canadian oil industry, the U.S. market seemed like an effective risk-free bet. Our closest ally also happens to be the world's largest oil importer. The U.S. had a growing demand for Canada's heavy sour barrels, and as a result, Canada now accounts for roughly two-thirds of all U.S. crude oil imports.

Now we face the rise of anti-pipeline politics with the Obama and Biden administrations, and more recently and more concerningly, the Trump administration's trade war on Canada and previously unthinkable threats to impose tariffs on Canadian oil exports. U.S. refineries hold an effective monopsony on Canadian crude imports. Economic research has shown that, by and large, American businesses and consumers bore the lion's share of tariff incidents across most sectors.

Most firms can pivot the export of goods elsewhere, if prices are better. Unfortunately for Canada’s pipeline-dependent oil industry, U.S. refiners can push more of that tariff incidence upstream into Canadian crude pricing. Indeed, this is exactly what happened through the first few months of 2025, right until the White House exempted all USMCA-compliant goods, including oil. There's no separating ourselves from the U.S. market. That ship has sailed. It's largely in Canada's interest to continue supplying U.S. refineries, but Canadian exporters have already largely satiated U.S. refinery demand for Canadian heavy crude. A growing volume of Canadian crude is already being re-exported out of the U.S. gulf coast.

The Trans Mountain expansion project helped crack the door open to new markets. Last year, China overtook the U.S. west coast as the largest buyer of those barrels. Still, the largest tankers cannot load from the Trans Mountain pipeline. This means that the only functional way to service the Indian market, for example, has been to ship on those large VLCC tankers out of the U.S. gulf coast.

Canada can prioritize its own energy security. As the largest net petroleum exporter in the OECD and the western alliance, Canada needs to prioritize its own energy security in terms of both supply and demand. Energy security of supply can only come from a diversity of suppliers. Energy security of demand can only come from a diversity of export markets. If the U.S. ever wants to tariff our exports again, it would be advantageous for Canada to have export options. This highlights the strategic value of more west coast export pipeline capacity that terminates in a deepwater port and provides full service access to global markets. This capacity will likely require public capital to be realized.

Canada is a global energy superpower. It's time we started thinking and acting like one.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Johnston.

Now we are going to Mr. Tertzakian.

The floor is yours for five minutes.

[Peter Tertzakian, Founder and Chief Executive Officer, Studio.Energy]

Thank you very much. I'm honoured to present to you, the honourable members of the committee.

I think we can agree that we are in a new era, a very different moment than even a few years ago, if not a few months ago. Our Prime Minister has described the world as entering a period of rupture, a break from an era of rules to one defined by fractured trade, geopolitics, outright economic warfare and the need for resilience through export diversification.

In short, Canada needs new customers who, through our infrastructure, expand trade and strengthen security. Oil and natural gas are central to that push, boosting exports and growing our GDP. Canada has the resources and production base to compete in global markets. In a more fractured world, Canada can also support trusted allies and other middle powers of vital energy resources, as we are seeing in real time.

First, on energy exports, in 2024—the formal numbers—Canada exported $187 billion in oil and gas, about one-quarter of all Canadian exports. This year, by the way, it will be over $200 billion. That means oil and gas creates jobs for workers and royalties and taxes for governments. By the way, those royalties and taxes were estimated at $30 billion in 2025 and will be over $40 billion in 2026.

This maintains stability for communities across every producing province and every province that supplies inputs to the industry. Being a superpower begins with producing at scale, gaining meaningful market share, selling to a wide and diverse international base and having the infrastructure to reach them from the Pacific Ocean.

My second point is that Canadian energy exports matter, not only to us but to the rest of the world, especially our allies. Oil remains essential not just for road transportation but for petrochemicals, fertilizers, aviation, shipping and heavy industry, to name a few. Natural gas and LNG also matter enormously, especially in Asia, where demand growth is strong.

We've already taken the first steps. TMX has opened up to Asian markets and is now exporting at full capacity. LNG Canada has started exports of LNG from Kitimat, with phase one capacity at about 14 million tonnes per year. Those are just small steps.

On natural gas, Canada remains overly dependent on two buyers—our own domestic market and the United States. If Canada can build towards 50 million tonnes per annum of LNG, we move from being a North American price-taker to being a genuine strategic player in the Pacific Basin.

Oil and gas infrastructure requires pipelines, gathering systems, processing plants, port facilities, storage and others. It also requires upstream investments to fill the pipelines. Our recent work on GDP shows the scale of the impact. Building an extra one and a half million barrels per day of oil capacity and filling it could raise Canada's real GDP by an average of $31.4 billion per year over the next decade and support an average of 112,000 jobs per year.

Our work also shows the cost and the investment required. To build such an oil pipeline, or series of pipelines, requires about $40 billion for pipelines only, plus another $100 billion in upstream investment needed to fill them with the flow of oil. It's safe to say that the infrastructure is expensive. We can do it, but the economic prize is also very large.

My third point is that the barriers to doing all this are very real. We face policy density, regulatory overlap, approval delays, cost inflation and uncertainty about carbon markets and carbon policy. In the LNG space, project proponents in the work we've done describe an unworkable policy environment that creates delays and rising costs, and signals to outside investors that Canada is not fully open for business.

We also face real constraints in determining indigenous rights and land governance, especially in B.C., yet our work also shows that indigenous partnership is not an obstacle. We find that it is a condition for success. Projects that give communities a genuine share and a genuine say are the ones that have the best chance of moving forward.

However, in the absence of regulatory reform, policy clarity and other stakeholder alignment, Canada's oil and natural gas industry will be neither cost-competitive nor able to attract the billions of dollars in investment necessary to expand and diversify.

To conclude, the choice before us is straightforward. We can remain a market that is hostage to the United States, dependent on too few buyers and vulnerable to discounts and delays, or we can take advantage of the moment. By the way—Mr. Johnston mentioned it, and I'll mention it—the amount that we have forfeited just on oil over the last 15 years as a consequence of being held hostage to the United States is over $49 billion U.S. That to me, as a Canadian, is unacceptable.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Tertzakian. Thank you both for that testimony.

We're now going to go to questions and comments. We are going to start with Mrs. Stubbs for six minutes.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thanks, Chair.

Thank you to both of our witnesses today for such an eloquent and informed demonstration of the challenges that face Canadian energy security of supply and exports—which directly impact proponents' decisions around production, based on whether or not they have enough infrastructure to export—and, of course, all the benefits for Canadian sovereignty, affordability and self-reliance, as you have articulated.

It is certainly appalling to Conservatives, who have always pushed this same Liberal government to fix the pancaking—because of domestic Canadian policy—of anti-energy legislation, red tape policies and taxes that, as you both articulated, our biggest customer, competitor and now threat, the United States, does not impose upon itself.

Of course, the private sector has issued a number of letters, with an increasing number of signatories among CEOs of all kinds—quite unusual in Canada, actually—with very clear directions to the government to fix the fundamentals, to provide certainty and clarity in legislation and policies, and to have a competitive fiscal investment attraction environment. That way, the private sector can get timely permit approvals and actually know that, on the back end, when they get an approval from the government, they will be able to construct that important energy infrastructure to the benefit of Canada and of North American security and resilience, once they get that green light.

To both of you, thank you for telling the truth. The Trans Mountain expansion—which, as you of course know, in the view of Conservatives should have been built by the private sector proponent, but it couldn't be because of the lack of federal certainty—does primarily feed the American PADDs, which then export from the gulf coast. It is still clear that, more than ever before, dedicated interjurisdictional pipelines for export are required for investment to come back to Canada, at the staggering and generational lost levels that you have both identified.

I would just invite you both to comment on what you would see as the top priority issues for certainty and clarity for investors in Canada to pave the way for the private sector to get timely approvals on energy export infrastructure. What do you see as the main gaps that definitely must be closed in Canada to make us competitive with the United States, and, most importantly, to expand our export markets well beyond that customer, competitor and, now, major trade threat?

I'll go to Rory first, and then Peter after.

[Rory Johnston]

Thank you for your question.

I think the one thing I would differentiate slightly is.... I completely agree, and I'm not at all going to defend the past decade of regulatory encroachment in this country, which has limited the attractiveness of investment in this patch. The one thing I would caution, however, is that....

In my comments, I mentioned that the oil and gas industry, the private sector by itself, is always going to pursue the lowest-cost and lowest-risk avenue for exports. In some ways, I think it's often laid at the feet of government that the reason we have so much dependence on the U.S. market is that it was an active choice by the government or something like that.

I think in some ways it's actually that if we look at some of the major generational-moving infrastructure projects in this country—whether it was the trans-Canada railway, TC Energy's Mainline or the C.D. Howe natural gas project—these were, in many ways, done differently from how the private sector would have done them. In both cases, you had outrage from industry, “Why wouldn't this go through Chicago? Why would you ever build a railway that doesn't go through the rail hub of North America?” I think that, at the time, Sir John A. Macdonald was arguing that we needed to keep this within our borders. We needed to have sovereignty over this—

[Shannon Stubbs, Conservative, Lakeland, AB]

Rory, I appreciate this, but of course I was elected for the last 11 years with this same government.... In fact, this government outright vetoed an approved interjurisdictional pipeline for exports to the Pacific, instead of taking the court option, which was to redo the indigenous consultation to get that right and to let the private sector build it. They also refused to declare the Trans Mountain expansion to be a general advantage to Canada, which would have helped provide federal jurisdiction so the proponent could go ahead and get that pipeline built. Not a single taxpayer cent should have had to be spent on it.

On top of all of that, there was a private sector proposal for a west-east pipeline to then also be able to provide western supply to eastern refineries and export to Europe. However, that was deliberately killed by the government—through regulatory red tape, moving the goalposts and uncertainty—to force the proponent to abandon it because of domestic politics in the middle of the country.

Thank you for your answer so far.

Mr. Tertzakian, I wonder whether you might want to expand on the question that I asked, which was about the top priority: providing certainty and clarity for investors in Canada to expand oil and gas production and exports for Canadian self-sufficiency and to supply our allies. Would you mind commenting on that, particularly in terms of the competitiveness with the United States?

[Peter Tertzakian]

It's a great question. First of all, it's clarity and certainty. A permit should be a permit and should not, once granted, be subject to being shredded and discarded, which is what has happened repeatedly with many of the pipelines.

Second is the time value of money, which all investors will look at when thinking about building a pipeline. We need to shorten the process of permitting substantially—from many years down to less than one or two years. This is where the competition is at in other jurisdictions in the world, including the United States.

When investors look at their global portfolio and ask where they are going to put their money, they want the certainty that when a permit is granted, it's real and they can get it in a reasonable amount of time, because of the time value of money.

[The Chair, Liberal, Terry Duguid]

Thank you.

Mr. Clark, we're going to go to you for six minutes.

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

Thank you to our witnesses for being here today and for your very thoughtful opening statements, which I think did a very good job assessing this situation as it exists today.

In the time I have today, I would like to talk a bit about where we can go in the future and how we can improve the energy situation of the country. I think that's the essence of this study and the point of what we want to achieve.

Both of you talked quite a bit—as I say, accurately—about our over-dependence on the U.S. and the complications that this has obviously caused currently. Then there are overlapping regulatory issues as well, which I think was also well said. As I'm sure you know, the federal government is in the midst of working on harmonizing environmental assessment procedures and processes with all provinces and territories. In my home province of Nova Scotia, that was signed a couple of weeks ago. There are many other provinces that have done that.

Mr. Johnston, you can go first and then Mr. Tertzakian can go afterward.

What are your thoughts on that process in particular? Perhaps complementary to that, what are your thoughts on Bill C-5, which is the major projects act, and on how those two things can be complementary to get these projects moving to diversify our options?

[Rory Johnston]

I want to reiterate what Peter was saying in the last question as well. Fewer approvals, less permitting and faster permitting will all help the process and allow, particularly to Peter's point, the upstream investment to fill these pipelines and get this product produced in the first place, to the point that we don't even need to worry about where we're actually selling it to.

That said, I will defer to Peter on some of the specifics around Bill C-5 and some of the specifics of Canadian domestic regulatory policy, given that my focus is more on the actual market structure and export patterns.

[Peter Tertzakian]

By the way, it's not just an issue with the United States. We have to be globally competitive as we enter more into global markets. We are not just going to be competing with the United States. We're going to be competing, from an investor's perspective, with a global portfolio of opportunities. The imperative is not just to diversify away continentally but to be competitive globally. The good news is that we can do it, but one of the major impediments, as we've been talking about, is the regulatory pancaking, both federal and provincial, and so on.

Bill C-5 is incredibly important. I personally was very heartened by the introduction of Bill C-5 and the institutionalization of the Major Projects Office. We await to hear how they will, hopefully, streamline and improve these processes so that we can send the proper signals to international investors to come and invest.

One more point is that, as an example, the last time one and a half million barrels per day of incremental oil capacity was built was about 15 years ago. The $180 billion or $200 billion that was required largely came from international multinationals, sovereign wealth funds and other places. These are the same places that we will need to tap into. Mr. Carney and his ministers have been travelling the world cultivating interest, but when the interested parties come here, they need to look under the hood and see that all of our processes and our competitiveness are aligned with their global strategic intent.

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

I think those are excellent points from both you. As someone who is obviously serving federally now but who has also served provincially, I've seen both sides of that coin. There's no doubt that there are lots of areas where we need to streamline those processes.

To your point, Peter, I too hope we will see major progress on this in the next few months and next couple of years.

I have one question I want to ask you, Mr. Johnston. I think you mentioned this near the end of your opening statement, but I want to get your thoughts.

Correct me if I'm wrong, but I think you mentioned that in your view, any new energy infrastructure—perhaps you were referring specifically to pipelines—would require some level of public capital. Why is that, if I have it right?

[Rory Johnston]

To clarify, I was specifically talking about the northwest coast pipeline being championed by the Alberta government. The only reason I say that is.... There are two factors.

One, our current track record on building west coast pipeline capacity is very mixed and very expensive. Even the Trans Mountain pipeline, as it currently exists in its expanded form, is not covering the full cost of construction with tolls. If the tolls were to cover the full cost of construction, they would be distortionary and ruinous to the overall structural value of western Canadian oil production in barrels. The same thing would happen, I think, if you structurally acquired a new million-barrels-a-day pipeline capacity to the west coast. It would cost $30 billion or $40 billion.

My point is, mostly, that the competing egress that is largely southbound, the Enbridge Mainline expansion pipeline, is going to be notably cheaper. For many of the reasons Peter discussed, it's easier to build pipelines and this stuff in the United States. This is why, historically, so much of our oil export, structurally, has gone there.

There is a tendency to say, “That's our mistake.” However, it's economics. It's the gravity theory of trade. It makes a lot of sense, but it has introduced vulnerabilities and precarities into our system. From a strategic perspective, we want diversity, but the economics naturally concentrate. It made a lot of sense, for a long time, for our exports to do that, but it has introduced vulnerabilities that we now have to deal with and that were brought home to bear last year, harshly.

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

Thank you.

[The Chair, Liberal, Terry Duguid]

Thank you, both.

Mr. Simard, go ahead for six minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

I find these discussions very interesting. I've long wanted to hear someone say that infrastructure is not profitable simply through its use. Mr. Johnston, I don't think I'm putting words in your mouth, since that's what you said. It seems to me that one of the fundamental principles of capitalism is to invest one's money in something that's profitable.

For a long time, I've had the impression that the reason oil and gas companies don't want to invest in infrastructure is that it's not profitable for them. Without public money, it's not profitable. That's my understanding of the Trans Mountain pipeline. People are not paying the true cost of use. We fund it collectively to the tune of $7 per barrel. If I understand what you meant earlier, without public money, no oil and gas infrastructure will be built.

Is that what I understand from your last exchange with my colleague, Mr. Johnston?

[Rory Johnston]

I should specify that this is only for the northwest coastal pipeline. The million-barrels-a-day bitumen pipeline currently being championed by the Alberta government is to the west coast. All other major oil pipelines—for instance, the Enbridge Mainline, original Trans Mountain and Keystone XL pipelines—have all been privately constructed and continue to make good money. These are companies that make good profits. The rest of the upstream sector obviously makes a lot of money from this and further contributes to the public coffers through royalties and taxes.

I should also say this, for instance: Trans Mountain may not be paying its full freight through tolls, but there would be a cost to the overall public purse if those tolls were charged because, again, the differential borne by that marginal barrel—if it were clearing on the Trans Mountain line at a deleteriously high toll—would devalue the rest of the barrels in the basin, which would then erode royalty revenues, etc.

Essentially, the argument—or at least my argument—is that it makes sense to have a subsidized, marginal west coast strategic egress cost in order to keep overall basin pricing strong so producers can continue to contribute to public coffers through royalties and taxes.

[Mario Simard, Bloc, Jonquière, QC]

To summarize in my own words, this infrastructure does not pay for itself in the long term.

I'll take you in a different direction, gentlemen, but maybe we can come back to this.

In both of your presentations, you said that, in a way, we were captive to the U.S. market, and that's a major problem or stumbling block for Canadian oil production.

However, there's one thing I'd like to understand. When I look at the ownership structure of the biggest players in the oil sector, I realize that they are mostly American-owned. What interest would oil-producing companies, especially those with an American ownership structure, have in diversifying their market? I think that it's perfectly natural for them to send their oil to American refineries.

Isn't there something incongruous about this, given that the entire ownership structure of the major players in the oil sector is American? Are we going to force them to export to other markets? In and of itself, it's already a problem to know that the major players in Canada's oil sector are mainly owned by American interests. Does that not concern you?

[Rory Johnston]

Do you want me to answer, or do you want Peter to answer?

[Mario Simard, Bloc, Jonquière, QC]

Both of you can answer; I'm being generous.

[Rory Johnston]

Okay. I'll say something very quickly and then I'll turn over the floor to Peter.

On ownership structure and equity, obviously the U.S. capital markets are vast and many of our companies are listed on American stock exchanges. In terms of the equity ownership, it's to be expected that they would be owned by Americans to some degree. However, to go back to the point of royalties, I will stress that those are always going to be charged, because this Alberta citizens' constitutional resource is going to be monetized on the behalf of Albertans. That's where the royalties come in.

Also, with ample west coast export capacity, particularly right now when there are insanely high prices in Asia for crude oil, even if you take the assumption that American ownership affects their decision-making at all—which I would dispute heavily—companies are going to follow the highest prices. Those, right now, would be in Asia, so I do think that they would be maximizing exports out of those pipeline capacities.

[Peter Tertzakian]

First of all, I would like to challenge the idea that even Trans Mountain is not profitable. Over what time period are we talking? There are many measures of profit—

[Mario Simard, Bloc, Jonquière, QC]

I would point you to an analysis that was done—