Natural Resources Committee on April 16th, 2026

[Peter Tertzakian]

This is not a correct assumption.

[Mario Simard, Bloc, Jonquière, QC]

I would point you to an analysis that was done by the—

[The Chair, Liberal, Terry Duguid]

Colleagues, let's speak one at a time.

Mr. Simard has the floor. It is his time.

[Mario Simard, Bloc, Jonquière, QC]

This is an analysis done by the Parliamentary Budget Officer. The analysis states that, over 40 years, we will not be able to recoup the costs of Trans Mountain. Not only that, but we also have to collectively subsidize, with public money, the barrels that pass through Trans Mountain—if memory serves, we subsidize them to the tune of $7 per barrel. Therefore, users are not paying the true cost of using the infrastructure.

I absolve myself by saying that this is not political; it comes from the Parliamentary Budget Officer.

[The Chair, Liberal, Terry Duguid]

We're at time, but I'll give Mr. Tertzakian a chance to respond.

[Peter Tertzakian]

I think when we talk about who is extracting the value—we'll call it profitability—from Canada's resources, the resources that we own, I would suggest to you that the people who are extracting it are the refiners in the United States. We can demonstrate that $49 billion was forfeited in discounts to the benefit of American refiners. These numbers are not accounted in this Trans Mountain analysis, nor should we assume that the next pipeline that is built is going to be unprofitable. I think these are not correct assumptions.

Finally, what is the cost that is not just dollars and cents in this new world? That value is not—

[Mario Simard, Bloc, Jonquière, QC]

I would just encourage you to submit your intended answer in writing.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Tertzakian.

There's another round, Mr. Simard, and we can come back to you.

We're going to go on to our second round. We're going to start with Mr. Malette for five minutes.

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

Thank you, Mr. Chair.

My question is for Mr. Tertzakian.

You mentioned that in 2025, the return in royalties and taxes to Canadian citizens was $30 billion. You've mentioned that there's an estimate that the return to Canadian citizens will be $40 billion in 2026. You also mentioned that Canada could be a world strategic player in the future.

Thinking of this, the question at the end is what the number could be, the return in royalties and taxes to Canadian citizens, when we have the pipelines we need and when we start taking oil from offshore, from Newfoundland and the Maritimes? What could the benefits be to Canadians in the long term, in billions of dollars?

[Peter Tertzakian]

I don't have the exact numbers, but I can give you a rough estimate.

The $30 billion in 2025 is based on an oil price of $60 per barrel. Probably between $60 and $65 is, in only my opinion, the long-term price that we would probably look at. By growing another million and a half barrels per day, you can linearly extrapolate what this means on top of already producing and exporting five million to six million barrels per day. I'm comfortable saying that the incremental take, because it is commodity-price dependant, at $65 per barrel would probably easily be another $10 billion per year.

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

It's an increase of $10 billion per year.

[Peter Tertzakian]

I'm doing the calculations very roughly in my head, but this is not an unrealistic expectation.

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

Thank you. I didn't expect that. That's a great answer and definitely a great benefit to Canadian citizens.

It's very interesting. Could you explain a little bit more how the Trans Mountain pipeline, in time, will bring back some revenues to Canadian citizens?

[Peter Tertzakian]

It already is. I don't have the cash flow numbers handy, but it's fully utilized and is already making a return back to Canadian citizens.

I should point out that most energy infrastructure in the world and even in this country is state-owned, whether it's our power lines with Hydro-Québec and Ontario Hydro or pipelines in other countries. We should be happy that Trans Mountain is a vital piece of infrastructure that we own. As a Canadian, I am happy that it is not in the hands of foreign countries as it was before Canada bought it.

The question is this. How do we leverage off of a state-owned, vital piece of infrastructure, expand it to the benefit of all Canadians and help our allies and others in the world who are looking for safe, reliable and even, ultimately, low-carbon barrels of oil?

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

Thank you.

Mr. Johnston, I was seeing your body language when Mr. Tertzakian was talking of the return. Maybe you can add to that a little bit.

Also, what steps can be taken immediately to begin developing our resources in pipelines and offshore drilling in Nova Scotia, where they have extraordinary reserves?

[Rory Johnston]

Could you repeat the first part of that question? I wasn't clear on that part.

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

I was hoping you would add a few billion dollars to the royalties and taxes.

[Voices]

Oh, oh!

[Rory Johnston]

Sure. I'll add a few more on there.

To double down on what Peter was saying, the other important aspect here is that overall volume matters. As Peter noted, these are commodity-price dependant. There are going to be periods when commodity prices are lower and this narrative changes dramatically. There are going to be periods when oil prices are much higher, like right now, when we have roughly $100 a barrel and potentially much higher, should this crisis persist.

One aspect here is that a lot of the value generated or lost in the commodity market happens in these episodic crisis periods. In 2018, when we had differentials blow out to $50 a barrel, if that held for a period of time, if curtailment wasn't imposed, those differentials would have very quickly paid for many additional equivalent pipelines. Similarly, having the capacity to capture and compete in moments like right now, when we have insanely high prices around the world, would benefit us more if we were able to directly export to Asian markets.

[The Chair, Liberal, Terry Duguid]

Thank you very much, Mr. Johnston.

Thank you, Mr. Malette.

Mr. Hogan, you're up for five minutes.

[Corey Hogan, Liberal, Calgary Confederation, AB]

Thank you, Chair.

Mr. Johnston and Mr. Tertzakian, I want to thank you both for being here. We have many good panels, but I like to say that it's not a great panel without a Calgarian.

Peter, you're a Calgarian. Rory, you're an honorary Calgarian in my books. Look at us go. It's a great panel today.

I think we're going to be in violent agreement about the need to diversify away from the United States, the need to move faster and the need to improve regulatory processes, as the Prime Minister has said. On that, I want to flag that the Major Projects Office work is, in some ways, to bootstrap that—to, of course, be a mechanism that we can use now as we take regulatory learnings into the system as a whole so that the entire system can move faster.

Mr. Johnston, I want to talk a bit about the gravity theory of trade. This is a question I've asked many witnesses over the course of this particular study.

Economics concentrates, and it is strategic to diversify. Economic security and nation building are reasons Canada and Canadians would want to diversify, but those are not reasons that the market should have to pay for, frankly. How do we do it with minimal market distortion or, where distortions are, so that those distortions, when necessary, are “fair” and don't favour one party over another?

What advice do you have, as we think about exports, about where we can take such steps?

[Rory Johnston]

I would generally agree that we're going to be in violent agreement on these points. I think that when you think about, again, juxtaposing the west coast oil pipeline, which is a large west coast-oriented pipeline that terminates, by definition, in a deepwater port—which is important in this context because right now, to again reiterate from my initial comments....

Energy Minister Hodgson was at India Energy Week—I want to say that was two months ago now—and he was flagging the importance of the Indian oil trade. Unfortunately, we cannot service that oil trade from our own ports. We need to use VLCCs that are down Louisiana way. That seems like a strategic shame to me. In terms of the west coast pipeline, I think it would be fantastic if there were a circumstance where, given all the regulatory easing, all the things that Peter so eloquently stated came to pass and we could build a pipeline that was perfectly competitive with a southbound pipeline. I would love that.

I am not especially optimistic that, even with policy change, that's going to happen immediately, and we need to do this quickly. How does this happen? I think it comes down to government policy and making this a critical priority of the government, both in Ottawa and—I would argue as well—in Edmonton. That will likely involve some kind of concessionary capital.

There are many ways that this could be structured. However, at the end of the day, I think it would be beneficial to have both public.... As Peter stated, public ownership of infrastructure, energy infrastructure in particular, is the norm the world over. North America is rare in the fact that we don't do it as often. I think—whether or not it would be Edmonton or Ottawa having concessionary capital in the project—that's one way of going about that.

The main purpose is getting the pipeline built in a fast way that potentially would not require lining up all of the shipper commitments as you would need to do on a fully private pipeline. I think you have a background in pipeline construction. That would be something that's going to take a long time, particularly with competing options—to secure the sufficient number of demand and offtake and shipping commitments to get that pipeline de-risked.

I don't think we should wait that long. I think that we should start building it much sooner. That is essentially the long and the short of it. We need to build this thing faster, and the only way we're going to do that is with a government push.

[Corey Hogan, Liberal, Calgary Confederation, AB]

As you said and as I said, we're in violent agreement on many of these points.

I worked for the Government of Alberta in 2018 when WCS went negative. Yes, there were massive economic consequences, not just for Alberta but also for Canada. I think back on those days, and I think that in some ways it was a bit of the tragedy of the commons and that in some ways the Trans Mountain pipeline allowed us to, as a government, make sure that the overall system was working. Of course, we don't want to be public owners of pipelines. We don't want to be publicly investing if it at all can be avoided.

As Mr. Simard suggested, if you have any written suggestions in terms of the levers that might be available for government to incentivize and push people towards those, we would love to take stock of those as a committee.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Hogan. That is your time.

We will now move on to Monsieur Simard for two and a half minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you very much, Mr. Chair.

Gentlemen, I appreciated the discussion on public ownership of infrastructure. We have that in Quebec with Hydro‑Québec, but the profits also come back to us, which is a significant detail.

Mr. Tertzakian, I asked you a question earlier and may have been a bit abrupt, as I didn't give you time to answer it. However, as Mr. Hogan rightly pointed out, if you have more information to give us on the profitability of this infrastructure, you can do so in writing. That could make our work easier.

Gentlemen, I'll ask you a very simple question. There's no catch here. In your opinion, in the short or medium term, is it possible to build pipeline infrastructure without using public money?