Natural Resources Committee on April 16th, 2026

[Peter Tertzakian]

Absolutely. We are seeing countries and their state-owned capital wanting Canadian resources—and not just oil and gas—because of the current world situation. This is not new in Canada. Most of our energy infrastructure—certainly with oil and gas—has been built by using foreign multinational capital, and then we benefit as Canadians from the royalties and taxes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you very much.

Mr. Johnston, what are your thoughts?

[Rory Johnston]

Again, to echo Peter's points, absolutely, I think to the point of even pipeline capacity, yes. In the private sector, Enbridge will be expanding Mainline. Trans Mountain Corporation will be expanding Trans Mountain. That will not require the allocation of government money. It's the same with the Bridger pipeline.

[Mario Simard, Bloc, Jonquière, QC]

I don't quite understand the comments made during the last discussion on public infrastructure, but I accept your answer.

I want to discuss price volatility with you. I want to understand it better.

As you know, prices are currently very high because of the geopolitical context. Sometimes, people tell us that China is making very rapid progress in the electrification of transportation because it wants to reduce its dependence on oil. If China becomes a more moderate consumer of oil, that frees up space on the market. Inevitably, that must lead to lower prices. I assume that the major oil companies have enough actuaries to take all these factors into account.

Doesn't that make infrastructure development and long-term profitability—that is, over 40 or even 50 years—more difficult?

[The Chair, Liberal, Terry Duguid]

That's time, gentlemen, but I'll allow a quick answer from each of you.

[Peter Tertzakian]

The quick answer is that oil is not just used in vehicles. It's used in all sorts of other products, including most of what you're wearing and what you see around the room.

[Rory Johnston]

While it is true that China has pushed hard on electrification and other energy transition patterns, oil demand has slowed. In terms of oil demand growth, it has slowed globally, but it is still steadily growing and is expected to continue growing. As long as demand continues to grow, we need to grow supply to meet it.

[The Chair, Liberal, Terry Duguid]

We will now go to Mr. Rowe for five minutes and end with Ms. Church.

Mr. Rowe.

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

Thank you. I have a lot of questions to ask today, with some small questions going through a long journey here.

You know, in 2008 a barrel of oil was $147, yet the price at the pumps in 2008 in St. John's, Newfoundland, was at a little over $1.20. Today the barrel is only $90. Although that's high, the pumps in St. John's are at over $1.90. Where is the money being made? Where are the profits going? I assume it's the refineries that are making a lot of profit.

I don't know if you might be able to answer that for me, Peter, just very quickly.

[Peter Tertzakian]

I'm not a retail gasoline expert. I'm an upstream expert. Maybe I'll turn it over to Rory.

[Rory Johnston]

Thank you, Peter.

While I do not know much about the specific jurisdiction you're talking about, in general I think the important thing to note is that three major things drive Canadian pump prices. You have crude oil, which is obvious, as you noted. There are the refining margins, which are higher now than they were then. Part of this is going to the refining sector. I should note, though, that this is not excess profitability, per se. Gasoline, like crude oil, is its own commodity market that's driven by its own supply and demand balances. The relative value of gasoline in the world as a traded commodity drives what we call a crack spread or refining margin.

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

Yes, exactly. I just—

[Rory Johnston]

If I can keep going, the final piece of this, going right to the core of this conversation, particularly to many of Peter's points about foreign capital coming in and investing in the oil sands in particular, is the Canadian dollar. Right now the Canadian dollar is weaker than it has historically been when oil prices have been this high. There are a bunch of reasons driving that, but one of the major factors is less external foreign direct investment coming into the country and essentially bidding up the value of the dollar.

Historically, that provided a shield to Canadian consumers. Unfortunately, we've lost that shield. Now we are far more exposed to the buffeting of global commodity markets.

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

Exactly. If I remember correctly, the Premier of Alberta said that the Americans take our oil, refine it and sell it for three times more into global markets than what we do here in Canada. To me, that proves the need for an east-west pipeline, as we mentioned here today already, to export overseas and export to other markets.

Do you think we should be doing more of that processing here in Canada to get the profits out of the hands of the Americans?

[Rory Johnston]

I will take another stab at this one. The energy east pipeline, as it was then known.... Essentially, each pipeline achieved something different. I look at the west coast pipeline as securing security of demand. I look at the east coast pipeline as securing security of supply.

Right now, for instance, during that tariff battle and the trade war last year, there were open worries about whether or not barrels that transited through Chicago on the main line would be subject to some kind of tariff when going back into Ontario. From the exact same point about the TC Energy Mainline, which didn't go through Chicago, we wouldn't have to worry about that if we had an all-Canadian pipeline going east. The challenge, of course, is once again price and cost. That's a very long way for a pipeline to go. I think this is part of the challenge as well.

We have to make choices. Are we managing and prioritizing domestic energy security of supply, or are we trying to expand our export markets and make the most money we can as a country? If it's the latter, I would say the west coast is the priority. We can do more than one thing, but I do think it's important to have priorities.

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

Perfect. I'm going to ask questions that are closer to home. Our province used to have a refinery. It was 5% of our GDP. It was doing 135 barrels of traditional oil a day. It's now doing a 10th of that doing biodiesel.

I'm having a hard time understanding the biodiesel industry. It seems that the only way to make it profitable is with tax credits. If the U.S., Europe and Canada decided they wanted to tighten their fiscal belts and reduce inflation by having smaller budgets and cut the tax credits for biodiesel, could that market survive? Isn't that opening ourselves up to more geopolitical risk, by investing close to $100 million into refineries reliant on tax credits, oftentimes of other foreign nations?

[Rory Johnston]

Do you have any thoughts on that, Peter?

[Peter Tertzakian]

My thought is that if you're asking a broader question, whether Canada needs to be more energy-secure, the answer is yes, particularly in central Canada and eastern Canada. We are actually in a very precarious situation even right at this moment, depending on what happens in the Middle East. We could ourselves, in central and eastern Canada, be short of petroleum products.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Rowe.

Thank you, witnesses.

Finally, we are going to go to Ms. Church for five minutes.

[Leslie Church, Liberal, Toronto—St. Paul's, ON]

Thank you very much, Mr. Chair. It's a pleasure to be here.

My question may be taking us in a slightly different direction. We've talked a lot this afternoon about some of the preconditions for building major projects: investment, shippers' contracts, indigenous engagement, which you raised, Mr. Tertzakian.

What else do we need to be thinking about? The reason I ask the question is that a lot of the work that I do and engage with actually turns around employment, labour and the pipeline of talent, but also around other incentives for investment and growth or the work that we're doing with provinces to ensure that there is one project, one review.

I'll turn to you first, Peter, and then to you, Rory. Can you give us a bit of a picture? If you were offering advice to us, what are the next one or two things that we need to be thinking about if we really want to accelerate and advance these sorts of major projects?

[Peter Tertzakian]

That's a great question, and as a proud Canadian, what I would like to see is the harmonization of Canadian and provincial regulations to reduce what Rory called the pancaking or the layering, and also the reduction of interprovincial barriers—and I know your government is working on this. These investment dollars are huge, and there's no reason why all Canadian provinces can't participate in providing the inputs that are required. An example is steel. Why would we go outside Canada to get steel if we can get it domestically from other provinces or other inputs? That would also enhance our GDP tremendously, our prosperity and our jobs.

We need greater harmonization among provinces and among the provinces and the federal government.

[Rory Johnston]

I would just add that this sector, over the course of my career, has grown ever more politicized. That is understandable, given the stakes, but it is also unhelpful. I would say that when the industry becomes a partisan football, when regulatory policy and even just general disposition towards the industry becomes partisan, that's damaging to the long-term health of the industry. I think it's one of those risks that's very difficult to hedge or ensure for industry, because you're never sure when the next political wind is going to blow.

My dream would be to see that we can have an industry that is supported by all parties in Canada, for the benefit of all Canadians, travelling on Canadian infrastructure to every part of the world, maximizing our value and supporting our allies. In moments like right now, when we have, again, the largest oil supply shock in history in the Middle East with the Strait of Hormuz closed, we should be able to provide assistance to our Asian allies without having to go through the U.S. gulf coast.

[Leslie Church, Liberal, Toronto—St. Paul's, ON]

Peter, you mentioned in your last answer to my colleague across the table here the need for us to really think about Canada's energy security. I'd be interested in hearing again from both of you on this: What is the makeup in your mind of that energy security portfolio?

Oil and gas is a piece of this, but there are others, especially when we think about this from a national coast-to-coast-to-coast perspective. It can look different in different parts of the country. What does that mean to you in terms of the actual portfolio that would help us be energy-secure broadly?

[Peter Tertzakian]

There are many primary sources of energy that go into all sorts of functions across the economy, including electricity, but oil and natural gas are vital to many sectors of the economy, and not just for transportation.

When it comes to oil and natural gas, we are not energy-secure, despite the fact that we are the fourth- or fifth-largest producer of oil and gas in the world. Anyone looking at Canada from the outside would say that's absurd. It's absurd, as I said before and I truly believe, that eastern and central Canada are in a precarious position right now in the event that the Strait of Hormuz rekindles the conflict. It's a very dangerous situation.

We saw this in 1973 and in 1979. We had rationing coupons that were ready to go and printed by the Government of Canada. Do we want to go there again? What have we learned in 50 years? The answer is, in my opinion, nothing—to be blunt.

This is our opportunity to think about ways, and it doesn't necessarily mean building a very expensive pipeline from west to east. There are other ways of doing it, but it starts by acknowledging that we want to be much more resilient and secure, not only domestically but also as we think about export diversification and being resilient to economic coercion and economic warfare by our southern neighbours and others.

[The Chair, Liberal, Terry Duguid]

That is your time, Ms. Church.

That was a very strong ending, Mr. Tertzakian.

Colleagues, I think you'll agree that was a very stimulating panel. Let me, on your behalf, thank our witnesses.

As was mentioned, we welcome briefs, so if there's information you'd like to forward to the committee, it would be welcome.

I don't often do this, but I'm going to recommend a podcast by Mr. Tertzakian, ARC Energy Ideas. I think it's weekly.