Mr. Speaker, on behalf of the New Democratic Party caucus and as natural resources critic for the New Democratic Party in this House, I am pleased to participate in the debate regarding Bill C-25.
Our party throughout the last number of years has taken a very active interest in the natural resources sector in Canada. In Saskatchewan we have been involved at least in terms of the provincial government in encouraging oil companies to pursue enhanced oil recovery techniques.
I am happy to say that in Saskatchewan we have seen Morgan Hydrocarbons, Sceptre Resources, North Canadian Oils and a number of other companies pioneer the technology of horizontal well drilling. It has been very successful.
Before I get into that, I want to say that on behalf of our caucus I give our commitment that on condition we will support this bill. We believe the bill is important in terms of economic activity in the north. We believe it is extremely important with respect to creating jobs in the north and other parts of the country.
We particularly support the aspect where the country receives one-third of the profits from this project. One of the conditions in terms of our support is that the agreement continues to give Canadians one-third of the profits from this project in its expanded mode.
The reason I say that is with enhanced oil recovery and particularly horizontal oil well drilling, that increases production of wells in the Saskatchewan experience up to 500 and 600 per cent. That means when the production increases so dramatically, it shortens the life of the resource in the ground in terms of how long one can do this.
The other reason I am concerned about this bill, and I will be asking these questions in committee, is this. We in the House are not quite sure whether there will be any reduction in royalties as a result of the increased production that horizontal oil well drilling will provide.
If we continue to get our 5 per cent royalty and we continue to receive one-third of the profits and the spinoff from the expenditures by Imperial Oil with respect to jobs, that will be suitable in terms of our requirements with respect to supporting the bill.
We are very pleased to hear that the bill will only be passed on the condition that there is some commitment to provide the Sahtu nation with the bill it is interested in seeing put through the House of Commons as well.
As a member of the House and as a Canadian I am concerned that we monitor the impact on the environment as this project proceeds, in particular with horizontal oil well drilling. We have found in Saskatchewan's experience that the EOR which takes place is not dramatically problematic for the environment, but there are some concerns in very environmentally fragile areas. I would hope the government would certainly ensure the monitoring process involve the government when these things are watched from time to time.
I am not sure whether the other questions I have are for the House or for the committee. The New Democrats will be monitoring the length of time Imperial Oil will recapture its capital costs. We believe there is an opportunity because of the longevity of the resource project for the oil company to recapture its capital costs over a more moderate period of time as opposed to an accelerated period of time.
Imperial Oil is telling the government that the resource is very solid, that there is a lot of it in the ground, and that it is a long term project. I have every reason to believe that to be the case. I think as an assurance our government should say if that is the case it will allow it to write off its capital cost allowance and other capital costs over a moderate period of time as opposed to a very short period of time. This would be a responsible approach to the project. The other upside to doing so is that when it is done Canadians can share, as can the Sahtu, in the profits those wells will provide over the short term.
I thank members of the House for allowing me to raise our questions on the matter. In summary, we will support the bill as long as the concerns we have raised are addressed in a reasonable fashion.
(Motion agreed to, bill read the second time and referred to a committee.)