Debates of May 21st, 2013

Natural Resources—Main Estimates, 2013-14

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, our government is investing to ensure Canada has world-class pipeline safety systems and, as reflected in the main estimates, $5 million is dedicated to increasing inspections for pipelines from 1 to 150 and doubling the amounts of annual audits.

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

Mr. Chair, come on. A rookie MP has to tell the minister that they are called the National Energy Board Onshore Pipeline Regulations. It was a very simple question.

How many times has the department had meetings with representatives of the Canadian Standards Association to determine whether regulations for Canada's onshore pipelines are up-to-date and comply with international regulations?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, the member opposite is asking me how many times my staff has met with an independent regulator. So many of these questions are questions that would more appropriately be raised with people in the department at a more junior level.

Canadian corporations must comply with the rules and regulations of the National Energy Board. The latter is an independent regulatory body, and it will take all measures required to protect the public and the environment.

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

Mr. Chair, we have seen that the government's public consultation process was flawed, but I am shocked to learn that there were also problems with the consultation process that they held with experts.

Does the minister realize that the number of pipeline-related accidents has increased over the past few years and that those accidents are becoming more serious?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, as I said, the safety record for pipelines in our country is 99.9996%. That is a fact and no matter how many times we hear criticism on the other side the fact remains.

However, we will do everything we can to ensure that this number actually decreases. The ultimate objective is that there are no serious pipeline incidents.

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

Mr. Chair, the National Energy Board's website says the opposite.

It says that the Board has noticed an increase in the number and severity of incidents being reported by NEB-regulated companies in recent years. There have been six leaks in Alberta alone, which contradicts what the minister said.

Does the minister realize that old pipelines are more likely to break than new ones?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Technology, Mr. Chair, is obviously improving and so the safety record is improving as well. However, we can get whiplash from following NDP contradictions on pipelines and the oil sands. The New Democrats claim to support resource development, but oppose it at every turn. They oppose pipelines going south, west and east. They are opposing the most recent going east. Before they seemed to be on side. Today at a meeting of the natural resources committee, we heard from a member of the NDP that they were in favour of the number 9 line, but the leader of the party is against it. I do not really know where they stand and I am not sure they do either.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Mr. Chair, I appreciate the opportunity to speak today and participate in this debate. I plan on using the full 15 minutes to make a few comments. However, I also want to pose a few questions for the minister as well.

My comments and question will primarily focus on pipelines and specifically on our position on the economic potential brought by a west-east pipeline and the safety aspects of bringing oil to the east.

Canada is among the world's leading energy producers. We have the world's fifth largest producer of oil and the third largest proven reserves, estimated at 173 billion barrels, mostly in the oil sands.

As we heard at the natural resources committee, the global demand for crude oil is projected to increase for the next 25 years and beyond, especially in emerging economies. We are the third largest producer of natural gas, with marketable natural gas resources estimated to be as high as 1,300 trillion cubic feet. These are enormous resources and the development of these resources is supporting Canadian prosperity, as we heard comments previously.

Directly and indirectly, Canada's energy sector supports hundreds of thousands of jobs a year for Canadians. The oil sands alone support jobs for some 275,000 people, jobs right across the country in every sector of the economy, such as skilled trades, manufacturing, clerical jobs, the financial sector, everywhere.

The energy sector is also a key source of revenue for governments at all levels. For example, over the past five years the oil and gas extraction industries have added an average of $22 billion a year to government revenues.

Canada has the energy resources that the world needs. Our challenge going forward is being able to get these valuable resources, oil and natural gas, to tidewater and then to global markets. The solution is an expansion of Canada's energy infrastructure. The energy sector knows this and so does our government, and we are working to facilitate success for this vital economic sector.

Canada's crude oil pipeline system is integrated with the North American pipeline network and nearly all of our oil goes to the United States. Current maximum crude oil pipeline capacity out of Canada is 3.5 million barrels per day.

As western Canadian crude oil production has continued to grow, this production increase has overwhelmed existing pipelines. Canadian crude has oversupplied the local western Canadian market, driving Canadian crude oil prices lower than the prices of similar crudes globally.

Similarly, growing western Canadian and U.S. crude production has oversupplied the Cushing, Oklahoma crude market where West Texas Intermediate crude oil prices are set. West Texas Intermediate is also steeply discounted compared to the prices of similar crudes globally. This is important to Canada as most of our crude sales to the U.S. receive a price influenced by West Texas Intermediate.

What is more, Canadian crude oil production is still growing and pipeline capacity has not kept pace. Canadian crude oil producers currently need more pipeline capacity than is available.

I would like to remind members of the House that pipelines are not just an Alberta or western Canadian issue. Canada's eastern refineries currently have the industry's lowest profit margins. For example, the majority of crude oil consumed in Quebec comes from higher priced international markets and currently costs more than $100 a barrel as of May 6. We also know that the Irving refinery in New Brunswick, where I am from, also imports large amounts of its crude.

Over the past six months, I know the minister has done a fair amount of travelling. He has been to Saint John, New Brunswick to visit the oil refinery and the Irving refinery. He has also seen first-hand that Canadian refineries can process substantially more Canadian oil, generating more jobs and making our country less reliant on more expensive foreign oil.

Because of a lack of pipeline capacity, the Irving refinery and indeed Quebec currently import crude oil from foreign countries, some with much less stringent environmental standards. The Suncor refinery in Montreal is not currently processing western crude at all but crude from such far-flung sources as Africa, the Middle East and the North Sea.

The Irving refinery, in addition to offshore oil, is also bringing significant quantities of western U.S. oil to Saint John via rail. That could be upwards of 90,000 barrels a day coming into Saint John via rail from the western U.S.

I know our government supports the idea of a pipeline to the east that would bring lower cost Canadian crude to consumers and refineries in Quebec and Atlantic Canada. Such a pipeline to eastern Canada would create new jobs and economic growth across the country, particularly in Quebec and Atlantic Canada. According to Christopher Smillie, senior advisor of government relations for the Canadian Building Trades, even though direct pipeline construction jobs last on average three seasons, he said “the vast bulk of jobs created last for 50 years or more...pipelines link together jobs from one end of the production chain to the other...” That was in our natural resources report, which was tabled in the House on May 2, 2012.

This would allow Canadian refineries to process substantially more Canadian oil, making our country less reliant on more expensive foreign oil. Access to Canada's western crude would allow for lower prices than overseas crude and would help in maintaining the profitability of this refinery and other refineries in eastern Canada.

With regard to our May 9, 2013 committee on natural resources, I think it is important to say something for the record because it talks to the importance of bringing crude from west to east. I want to refer to comments by Mr. Daniel Cloutier in that meeting, when he was talking about the line 9, I guess we would call it re-reversal. He said:

We therefore believe that for the future viability of the Suncor and Ultramar refineries in Quebec, we need a reliable supply of affordable oil that will allow us to compete on equal terms. Maintaining the refineries is also indispensable to the petrochemical industry. The Parachem and CEPSA plants in eastern Montreal, for example, are very dependent on the survival of the Suncor refinery. Losing that Montreal Suncor refinery would, therefore, likely create a chain reaction affecting a number of other employers and threatening to cause a shut down as well. The Line 9 reversal project is currently generating the kind of excitement that has not been seen in eastern Montreal for years, a decade in fact. We now see a number of projects in preparation, with all the players positioning themselves. And we know right now that the reversal will lead to the investment in Quebec refineries, which will have to develop, among other things, units that can handle Canadian crude.

In addition, what was interesting today at our natural resources committee is that John Telford, director of Canadian affairs for the United Association of Journeymen and Apprentices of the Plumbers and Pipe Fitting Industry also talked about west-east being right after Keystone in his priorities. Sarnia, Montreal and in fact New Brunswick, would all benefit, and he said that New Brunswick definitely needs that help. Being a New Brunswick MP, we certainly would like to have the economic benefits.

The Saint John delegation, which included the hardworking MP for Saint John, was in Calgary last week to hear very positive news.

With regard to some of the things the minister has learned on export markets, could he talk about the position on east-west pipeline, specifically the benefits of not having more oil in the east refined at the Irving refinery, and maybe more specifically on the ability to get our product to deep water and the benefits of that to Canada?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, of course our government supports in principle the idea of a pipeline to the east. It would bring lower cost Canadian crude to consumers, and to refineries in Quebec, Lévis and Montreal, and Atlantic Canada, at the Irving refinery in Saint John. Pipelines to eastern Canada would create new jobs and economic growth across the country, particularly in Atlantic Canada.

With respect to the member's question about taking products to deep water, we currently export 80 million tonnes of oil off our east and west coasts every year. In fact, on any given day there are 180 vessels of over 500 tonnes that operate within our waters under Canadian jurisdiction. We welcome all proposals to further diversify our resources.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Mr. Chair, many proposals have been made to expand Canada's infrastructure, among these, as I said, are the reversal of Enbridge line 9 and the possible conversion to natural gas/oil of one of the pipelines in the trans-Canada main line system, both of which would take oil to the east. The Keystone XL and Enbridge expansions would move oil south, and the proposed northern gateway and trans-mountain expansion would move Canadian oil to tidewater on the west coast. That said, independent regulators will conduct comprehensive, objective, scientific evaluations to determine whether any specific project passes regulatory muster and is safe for Canadians and for the environment.

The demand to move oil has clearly outstripped the capacity of the North American pipeline network, and as indicated, railways are filling some of this gap for now. However, there is no question that one of the safest and most reliable ways to move very large quantities of oil, as the minister pointed out, is through pipelines. With our plan for responsible resource development, our government has taken steps to enhance our pipeline safety. I know the line 9 reversal proposal is currently before our independent regulator, the National Energy Board, to review that.

Minister, we talked about the estimates for the NEB. Can you talk specifically about what expenditures are there to ensure pipelines are built that will adhere to a strict safety regime? With the NEB estimates and their responsibility for cradle to grave on the project reviews, is there any concern about the NEB being able to fulfill its mandate as a regulator?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, funding to the NEB ensures that there is a clear and robust regulatory oversight mechanism throughout the life cycle of the facilities and activities it regulates. For example, in comparison to 2012-13, the 2013-14 main estimates have increased, primarily due to an increase of $5.6 million for pipeline safety and awareness.

The National Energy Board is a strong independent regulator of pipeline safety. The NEB subjects pipeline development proposals to an extensive review process, taking into account pipeline safety, protection of the environment and the public. Regulated pipelines boasted a safety record, as I said, of 99.9996% of the crude oil and petroleum products that were transported.

I have full confidence that pipeline companies will continue to ensure that pipelines meet the NEB's strict safety standards.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Mr. Chair, given that a significant portion of the west-east pipeline would travel through the Tobique—Mactaquac riding in New Brunswick, it is very important to constituents of mine that this be done in a safe manner.

Minister, in the estimates you noted there is $5.6 million allocated for heightened public safety awareness of pipeline safety. When we discussed the $5.6 million in our committee, it was said that the $5.6 million is really around $5 million which is going to actual operations and safety, and inspections, its actual work on the ground. About $600,000 of that amount is explaining this to Canadians, by enhancing the website and responding to various kinds of inquiries. However, my understanding was that the bulk of it was to be actual safety operations.

When you say “heightened public awareness”, what is your impression of what that means, and what provisions are in the main estimates to make sure we enhance that safety?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, as reflected in the main estimates, $5 million is dedicated to increasing the inspections for pipelines from 100 to 150, and to the doubling of the amount of annual audits. Almost $600,000 is allocated for heightened public awareness of pipeline safety.

It is important that Canadians know how to work around pipelines so that both pipelines and the people involved are safe. We welcome initiatives such as the “call before you dig” initiative that will further improve pipeline safety and public safety.

Our government has taken action to prevent pipeline accidents and to improve our ability to respond to any incidents that do occur.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Mr. Chair, I will be using my full 15 minutes for questions.

During the consideration of business of supply in committee, the deputy minister said that about 65 scientist positions have been cut. Which unit did these scientists work in?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chairman, Natural Resources Canada is proud of its scientists. We encourage scientists to share their findings and to share their findings with interested parties, by publishing articles and by conducting interviews with the media. In 2012, Natural Resources Canada scientists provided approximately 550 interviews with reporters to discuss scientific results and findings.

On average, every year, scientists publish approximately 500 peer-reviewed articles, while—

[The Assistant Deputy Chair, Conservative, Bruce Stanton]

Order. The hon. member for Rivière-des-Mille-Îles.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Mr. Chair, 40% of positions have been cut, and the minister refuses to answer questions.

Scientists at Natural Resources Canada play an important role with regard to environmental protection and safety.

What responsibilities did the minister have to abdicate by laying off 60-some scientists?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chairman, 42% of NRCan's indeterminate employees were occupying scientific or technical positions before the implementation of savings measures under budget 2012. After the resulting workforce adjustments, 43% of NRCan's indeterminate employees are occupying scientific or technical positions, so that is an increase in percentage.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Mr. Chair, my question had to do with the sectors affected by the cuts and the layoff of 40% of departmental scientists.

Perhaps the minister will be able to answer my next question.

Which regions were affected by the cuts, and how many layoffs were there in Quebec?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, there are four areas in which we are making savings.

We are streamlining administrative support to ensure the sustainability of and make internal savings at Natural Resources Canada.

The savings are related to the use, management and dissemination of information and knowledge; travel; vehicle fleets; programs; services and administrative costs; organizational changes, focusing on core roles and organizing government priorities; focusing on more economically advantageous work and adapting to the industry's changing circumstances—

[The Assistant Deputy Chair, Conservative, Bruce Stanton]

Order. The hon. member for Rivière-des-Mille-Îles.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Mr. Chair, the minister keeps dodging my questions. I will ask the same question again.

Which regions were affected by the cuts and how many layoffs were there in Quebec?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, as I said, the government has committed to balancing the budget by 2015-16.

The savings measures are based on the assurance that Canadians will receive superior value and that our programs, especially grants and contributions, will remain affordable while improving the efficiency of internal operations and services.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Mr. Chair, I am still waiting for an answer, but let us move on.

Is the minister co-operating with the inquiry that the Information Commissioner launched in April 2013 on the Canadian government's systematic efforts to obstruct the right of the media and, by extension, that of Canadians to timely access to the government's scientists?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, Natural Resources Canada complies with the communication policy of the Government of Canada and the Treasury Board of Canada Secretariat.

This policy seeks to ensure that communications from the entire Government of Canada are well coordinated, effectively managed and responsive to the diverse information needs of the public. This policy is the same for all departmental spokespersons at Natural Resources Canada, and for the entire Government of Canada.