Mr. Speaker, when the government nationalized the Trans Mountain pipeline in May, I asked whether the new Crown corporation would honour the existing contract to buy 75% of the steel from EVRAZ in Regina and make every effort to source the remaining 25% of steel from other Canadian mills. I welcome the opportunity this evening to further elaborate the case for using Canadian-made steel in the Trans Mountain expansion project.
At the outset, I should state that Kinder Morgan decided, on purely commercial grounds, to buy most of the steel pipe from EVRAZ in Regina. What I would like to speak to are some additional reasons to give preference to Canadian-made steel now that the project is under public ownership, and I would like to address three topics. The first is jobs. The second is the environment. The third is trade.
The main argument advanced in favour of the Trans Mountain expansion is that the project will create jobs for Canadians. Of course the extent to which it creates jobs depends critically on where the materials are sourced. Importing steel pipe from offshore obviously does not create jobs in Canada, whereas buying the steel from Canadian suppliers clearly does create jobs and economic activity in our country.
The EVRAZ steel plant has the potential to be the largest private sector employer in Regina. It is a pillar of the local economy and would make a very important contribution to employment in our city. Certainly the order to make pipe for Trans Mountain is the largest order that facility has and is really keeping it going.
I also want to talk about the environment, because that is often invoked as the main argument against this project. It is important to note that one of the key advantages to using Canadian-made steel is that it has a much lower carbon content than steel imported from offshore. Manufacturing a tonne of steel in China and shipping it here emits about five times as much carbon as manufacturing it at EVRAZ in Regina. Therefore, if our concern is to reduce carbon emissions, one of the solutions is to manufacture the steel right here in Canada.
Another environmental concern has to do with the possibility of spills. A key advantage of Canadian-made steel is that we have the opportunity to rigorously inspect it throughout the manufacturing process, whereas with imported steel, we sometimes cannot be as sure exactly what we are getting.
Therefore, from an environmental perspective, there is a strong argument to manufacture the pipe and other materials for the Trans Mountain expansion in Canada.
The final thing I want to talk about is trade. Some would suggest that despite these advantages of using Canadian-made steel, we need to honour free trade obligations. What I would emphasize is that other countries, such as the United States, already have policies in place to favour domestic suppliers with their federal procurement. We think of the famous buy-American provisions.
All I am saying is that now that the project is being carried out by the federal government, it makes sense to apply the same sorts of provisions in Canada to give preference to Canadian-made steel and the case for doing so is particularly strong in the face of American tariffs currently applied to Canadian steel. If we cannot sell south of the border, all the more reason to use the steel here.