Natural Resources committee  That's a complex set of questions. Maybe I can try to deal with certain stages of it. You're correct that the number of refineries in Canada has been declining, but the throughput in terms of the volume being refined is actually increasing, and has increased since the seventies.

Natural Resources committee  I think you also have to look at the demand profile as well. From a demand perspective in the refining industry, and downstream, if you will, or the midstream part of the oil and gas sector, Canada's demand profile has been fairly flat as well. So from an investment point of view, from a market point of view in a market-driven refining sector, the market is being served by the existing capacity we have.

Natural Resources committee  From memory, I think it was the mid-eighties the last time a major refinery was built in Canada. There have been a number of upgrades to existing facilities to expand production and throughput, but it was the mid-eighties.

Natural Resources committee  Certainly, the development and plan to build the refinery would encompass significant environmental regulatory reviews and approvals. But as Mark has pointed out, there are many other factors as well, so it's part of the factors that one would look at. Certainly, the economics between the premium achieved from upgraded, refined-in-Canada product and the price achieved in the market by doing it somewhere else—where the capital infrastructure exists—is one of the primary factors, but the timeline to build a refinery from a greenfield is estimated in the 5- to 10-year range, in terms of all the permitting and processes involved.

Industry committee  Excuse me for one second while I just reference....

Industry committee  I will answer the question through giving you where things situate themselves. In the early 1990s NRCan gathered petroleum data directly and developed expertise in the markets, but these things were at one point moved out of the department as we had the opportunity to access expertise in the private sector that did the same kind of work.

Industry committee  I can give you the lay definition, what it would essentially mean, but some of the other industry experts could probably talk to the motivation and how it actually happens. As the price of crude oil would increase, retailers and other distributors would see what the future cost of replacing, roughly speaking, their inventory would be.

Industry committee  I think it's fair to say, given all the factors we talked about that go into the pricing of gasoline, I can't give you the specifics to that particular moment when the GST was reduced by 1¢ and another 1¢ at a particular point. But at the point, if wholesale prices of gasoline were rising or crude oil prices were falling, one would have seen volatility in the price of gasoline based on all the factors.

Industry committee  With the refining margin and cost structures, you have to take into account that on an annual basis, refineries often have to have downtime for maintenance and have investments made in capital to keep the production facilities at the optimal level to be producing. There are changes in the variety of crude oils that refineries use that often require them, on a kind of cyclical basis, to change again how they produce gasoline.

Industry committee  We can certainly try to give you some more information on it, but some of the other folks at the table probably have equally sophisticated views of it. As was pointed out by a number of the speakers, the price of what the future cost will be of oil is speculation: it's what people believe the price is to be in the future.

Industry committee  Thank you for the chance to address this committee. Looking at the differentials and price fluctuations, we can see that the average price for Canadian gasoline has climbed steadily since 2011 from about $1.10 a litre in January to $1.35 a litre in May. It has recently declined to $1.27 in June.

Natural Resources committee  I think it's a completely fair comment. Natural Resources Canada works closely with, and sets the regulatory framework for, the NEB and the offshore boards, in partnership with Newfoundland and Labrador and the Province of Nova Scotia. Certainly aspects of the motion are covered in the NEB review, but there are a number of other reviews under way.

Natural Resources committee  Indeed.

Natural Resources committee  There was one in the early 1980s on the east coast of Canada, in Nova Scotia, and there was a second one in the same period, more or less, both of which were contained.

Natural Resources committee  I think if you look at all the policy aspects related to the motion, there are quite a few different elements and areas related to this. They involve a lot of complexity. They involve a lot of federal-provincial jurisdiction. They involve regional variations, environmental circumstances, and circumstances that are different in a very diverse country.