Proceedings of the Standing Senate Committee on
Transport and Communications
Issue No. 7 - Evidence, October 17, 2016
MONTREAL, Monday, October 17, 2016
The Standing Senate Committee on Transport and Communications met this day at
1:30 p.m. to study the development of a strategy to facilitate the transport of
crude oil to eastern Canadian refineries and to ports on the East and West
coasts of Canada.
Senator Terry M. Mercer (Acting Chair) in the chair.
The Acting Chair: Honourable senators, this afternoon the committee is
continuing a study on the development of a strategy to facilitate the
transportation of crude oil to Eastern Canada refineries and to ports in the
East and West coast of Canada.
I would like to introduce our first panel from the Quebec Federation of
Chambers of Commerce: David Laureti, Director, Strategy and Economic Affairs,
and Stéphane Forget, President and Chief Executive Officer.
Please begin your presentations, following which we will have questions from
Stéphane Forget, President and Chief Executive Officer, Fédération des
chambres de commerce du Quebec: Thank you, Mr. Chair. Allow me to introduce
myself. I am Stéphane Forget, President and Chief Executive Officer of the
federation. As mentioned, I am accompanied by David Laureti, our Director,
Strategy and Economic Affairs.
The federation is the largest network of businesspeople in Quebec and
represents the 143 chambers of commerce across the province. As the provincial
chamber of commerce, it has more than 1,200 corporate members in its
organization, businesses from all sectors of the economy and, of course, all
regions of Quebec.
We are pleased to be able to take part in the proceedings of the Standing
Senate Committee on Transport and Communications. Since economic development is
our top priority, we have been interested in the natural resources sector,
particularly energy issues, for many years.
There has been much talk about the transport of oil in Quebec for many years,
and we are involved in all projects in this field. We believe that energy
infrastructure development is necessary in Quebec, as it is elsewhere in Canada.
This infrastructure helps strengthen Quebec's and Canada's construction and
maintenance expertise and especially facilitates the transport of oil from here.
We are in favour of pipeline projects designed to transport oil from Western
Canada to Quebec, which will reduce our dependence on the oil we currently
import. Year after year, and we repeat this, Quebec often imports $11 billion to
$15 billion worth of oil from abroad. By using Canadian oil, we will help Quebec
refineries plan their investments and make them more competitive.
We believe that government support for these projects, established on a
commercial basis and in accordance with market rules, will guarantee well-paid
jobs for years to come and improve our balance of trade. In the circumstances,
we must support infrastructure investment projects that are designed to move oil
to Quebec and Eastern Canada.
However, we have observed that the implementation of these types of projects
is an increasingly complex proposition. Pipeline projects meet with strong
opposition. Citizens are more informed and the means of communication are more
numerous and especially more accessible to all citizens. Social acceptability
has also become a necessary condition for the implementation of projects of any
We must acknowledge that no project can have unanimous support. There will
always be citizens and groups that disagree with such projects. However, social
acceptability cannot be limited to the views of a single stakeholder.
Governments have a role to play in promoting economic development where our
economy urgently requires stimulus. And we feel it is the duty of businesses, of
course, and governments to demonstrate the economic development gains that are
to be made.
To increase the social acceptability of projects, we think the economic
aspects of those projects must be better documented, since their environmental
aspects are widely known. More than anything, this improved knowledge must be
made part of a defined, clear and predictable process because no project can go
ahead in the current context of ideological confrontation if we do not establish
clear and transparent consultative and decision-making processes subject to
rules and timelines that are fair, known and complied with by all.
We do not intend to limit the debate on major development projects in any
way. We would like to see informed debates based on actual facts concerning the
issues, risks, benefits, and impact resulting from the implementation of those
Similarly, we would like the consequences of the abandonment or
non-implementation of a project or the termination of a significant industrial
activity to be documented. We believe it is essential to enrich and expand the
public debate so we can bring the economic, environmental, and social spheres
into healthy balance. We also emphasize that it is important to conduct the kind
of credible and objective economic analysis that is unfortunately lacking in the
current public debate.
Thank you for listening. We are now prepared to discuss and answer your
The Acting Chair: Thank you very much, Mr. Forget.
Senator Pratte will ask the first question
Senator Pratte: Welcome to our committee. You talked about social
acceptability and said obviously that social acceptability is not a synonym for
unanimous support. The problem is to define the difference between the two. What
is social acceptability? We understand there will never be unanimous support,
but what is the area of acceptability that makes it possible for a project to go
ahead and enables a government to go ahead?
In the case of Energy East, which is of particular concern to Quebec, we know
the vast majority of green groups currently oppose the project. A very large
number of First Nations oppose it too. The Communauté métropolitaine de
Montreal, which represents a very large segment of Quebec's urban population, is
opposed to the project in its current form as well.
So a lot of people are opposed to the project. To my mind, that does not
constitute the desired level of social acceptability. How then do we go from the
present situation to what you think would be a project socially acceptable
enough to allow the government to move forward?
Mr. Forget: First, I would say that all the parties have a
responsibility. I think that the company proposing the project, let us say
TransCanada, is listening and that it must hear what the public has to say, what
elected officials or what the interested parties say to adapt the project to
today's reality. That is the first point.
The second point with regard to social acceptability is something I
mentioned. We recently conducted a consultation on social acceptability in
Quebec during which we said we have to establish clear, defined, and predictable
processes in which all parties feel they are being heard. Promoters need to know
there is a beginning and an end, and that lets them know exactly what they have
Consider the case of Energy East. We know the National Energy Board, the NEB,
is involved. Suddenly the BAPE is in the picture. So there are various movements
in the process. If we want to promote social acceptability, I think we must
establish a clear process. That is the other point.
The third point, to my mind, is that all parties must be properly heard.
Obviously, you will say that is our area and we are more sensitive to this, but
the values and economic impact of projects are all too often poorly known.
Without wanting to criticize, there is so much noise around environmental
issues, and rightly so, that the members of the public who evaluate these
projects are not always really aware of their economic value.
On the other hand, we also have to state the impact of not doing something
and what it will cost society not to carry out projects. So I think there are
those three points. We clearly feel we are not headed in that direction. We see
that the process started and then stopped. Changes were made among the panel
members. A consultation is to be held by the Bureau d'audiences publiques sur
l'environnement. When a consultation is held, people wonder whether the BAPE is
taking an interest in the matter. Does that mean there is an issue of trust in
the federal process? There is also an issue regarding the credibility of the
Consequently, I think that, if we want to develop a project that achieves
some social acceptability, there is the issue of the credibility of the players
and the matter of developing a clear process. The other issue of course is that
all stakeholders, all interests, must be clearly heard and well understood and
that we must also be able to assess the impact of failing to do something.
Senator Pratte: An interesting aspect that you mentioned and that we
have heard less about is the consequences of abandoning a project. Tell us what
you think the consequences of abandoning the Energy East project would be.
Mr. Forget: Let us start with Quebec. We coordinate a coalition in
favour of Energy East together with other groups. That coalition consists of
people from the business community and obviously people from the unions, unions
that essentially comprise employees or unionized employees who work on major
Obviously, there are not as many major projects in Quebec as we would like
there to be, and that is also true across Canada. So one of the obvious
consequences of not carrying out this kind of project is the impact on
construction workers who work on major projects. That is the first point.
The second point is the possibility of developing very strong expertise in
Quebec by involving plants, businesses, consulting engineering firms and other
organizations that could work on the project. Some are already doing so.
Consequently, it is possible to develop expertise that we could subsequently
use. So you have the unionized workers and you have the businesses.
The third point is something we have seen at the national level. We have
significant natural resources in Canada. We think we should exploit them, and
export them, use them in Quebec, of course, and elsewhere in Canada, but export
them. We therefore think that failure to exploit our natural resources will also
have an impact at the national level that must be considered.
The fourth point is the fiscal impact that a project this size could have.
There are not many of these projects, and I will conclude by saying what we have
said several times to elected representatives, notably to the prime minister
himself: foreign investors watch Canada and observe how projects are
successfully developed here. Foreign investors are under no obligation to invest
here. Consequently, I think that when they see how we develop our projects
internationally, how we accept them, and how we allow them to be carried out,
that also has an impact.
David Laureti, Director, Strategy and Economic Affairs, Fédération des
chambres de commerce du Quebec: I would add that opinion on the economic
aspects of the Energy East project is highly polarized with regard to job
creation, at least here in Quebec. A lot of jobs are being created in the
planning and construction of this project.
Once the pipeline is built, not many jobs will be created when it goes into
service. We have heard people and elected representatives say on several
occasions during the public debate that this infrastructure project will not
create jobs. However, you must bear in mind that this is true of infrastructure
projects, whether they involve the transport of hydrocarbons, as in this
instance, or highway construction. When you build a highway, jobs are created
when it is being built, but fewer employees work on it once it is in service.
The fact remains, however, that a connection is established between two regions
that will promote the transport of people and goods and so on and that will have
an essential economic impact.
Consequently, we are evaluating the project before us from this angle, and
the Energy East project as well. Unfortunately, this aspect seems to be somewhat
excluded from the current debate.
The Acting Chair: Thank you very much.
Senator Doyle: You have touched on moving projects ahead as quickly as
possible. We have had witnesses who say maybe the National Energy Board should
have the final say on whether or not a pipeline project should proceed or not
proceed. Then what happens is that the NEB approves or disapproves the project,
and the next step is off to cabinet where it could maybe languish for years and
years and years.
Do you have any comment on if cabinet should be involved or should it be the
sole priority of the National Energy Board to decide on the approving or not
approving the project?
Mr. Laureti: We of course trust the National Energy Board here in our
submissions. However, it must be said that, although we in Quebec have had
pipelines in the province for many years, there is still a lack of knowledge
about the institutions, namely the National Energy Board, which is the regulator
and the quasi-judicial institution that has authority to decide and make
recommendations respecting pipelines and the transport of hydrocarbons across
It is certainly unfortunate to see what has happened in recent weeks in the
consultation process that the National Energy Board was conducting on Energy
East. We were taking part in it too. We still think it is an important and
necessary forum in which all stakeholders can be heard. We believe the National
Energy Board is supremely capable of reaching a fair assessment of these
projects and thus of making an informed recommendation to political decision-
Mr. Forget: Yes, we saw it, we sense it in Quebec, and we have heard a
lot about it. There is a lack of credibility that is not insurmountable for the
National Energy Board. Many people in Quebec think that an organization that is
headquartered in Calgary and comes to conduct an analysis on a pipeline project
is inevitably prejudiced in favour of that project, whereas that is not the
However, it has a job to do in that regard in Quebec. Earlier I talked about
credibility, about a clear and credible process, and I think this is part of
that. Having said that, I think the exercise the National Energy Board is
conducting is very important. I think there will be a phenomenon of, I would not
say emulation, but rather understanding. Advance work must be done. I think
that, even before cabinet decides, the exercise the board is conducting is
extremely beneficial provided it is conducted in a clear and transparent manner.
Senator Doyle: You talked about the economic consequences of not
building pipelines, but if they are built how would the rail transportation of
oil specifically be affected in Quebec?
Mr. Laureti: May I ask you to clarify your question? In other words,
if we go ahead with the pipeline project, what impact will it have on rail
transport? Is that your question?
Senator Doyle: Yes. What would be the impact on rail and the
transportation of crude by rail? Do you see an economic impact on them?
Mr. Forget: First of all, we are not experts, and we have never wanted
to favour one mode of transportation over another. We think producers are in a
better position to decide the best way to transport their products. It is not up
to us to determine that.
Although I am not an expert, I do not anticipate any major impact. Some claim
transport via pipeline frees up space for other freight in the rail
transportation sector. Those are arguments that we have heard as well, but the
railways are definitely members of our federation too. No members have come and
told us, for example, that it was economically disastrous for them for a new
pipeline to be built.
As I told you at the outset, we think producers are in the best position to
determine the best way to transport their products. We are in favour of free
competition in Quebec, and competitors will also be responsible for
demonstrating which mode of transportation is the best.
Mr. Laureti: To conclude on this point, with your permission, the
pipeline makes it possible to reach new export markets, and, in that respect, we
can definitely support it.
Senator Boisvenu: Welcome and thank you for your presentations. I have
a few questions further to those of Senator Pratte. I was in an interview with
LCN this morning, talking about the work day we were organizing in Montreal, and
I was surprised by a question from the journalist, who asked me, "You are
conducting a study on the transport of oil by pipeline; however, is that project
What then are the conditions under which the project could be revived?
Because I had the impression many people thought the project was stillborn. So I
am trying to understand how we could get it back on the rails. Pardon the
Mr. Forget: Yes, no pun intended. First of all, I think the
unfortunate incident that occurred at the start of the NEB consultations cast a
shadow over the project. Consequently, I think quick action must be taken to
restart the process, in which the NEB will study and assess the project. That is
an extremely important condition for us. We need to turn the page, as it were,
on this episode as quickly as possible. That is the first point.
The second point is that the BAPE will eventually examine the matter. I think
that will be another opportunity to discuss the project. That is the second
important point. However, I basically think the project will begin to return to
public prominence once the NEB process is back on the rails, as you said.
Then the process will have to be clear, as I mentioned earlier. We can see it
on the ground. Some municipalities are opposed to the project as currently
presented; we agree on that. However, you have to go out into the field and meet
with the businesses. Some regions are waiting for this project because it offers
them some significant business opportunities.
Consequently, there is no unanimous support for this project, as you said,
but that is true in both directions. So I think the NEB has to get this process
back on the rails quickly, after carefully hearing what everyone has said on the
subject over the past few months, and I think that will be an opportunity to
However, we also have to see how the business works. This project may be less
well known to the media. On the ground, though, people are still working to
improve it, to meet with the organizations and businesses, to find Quebec
suppliers and to speak and work with the unions on opportunities. So the work is
continuing in the field, but you are right: that is less obvious in the media.
Senator Boisvenu: That was my second question. I know you are part of
the coalition. Other people, the heavy equipment operators, also told us about
that this morning. As the representative of the chamber of commerce, what is
your role in the coalition?
Mr. Forget: We chose to join the coalition and, I would go so far as
to say, to coordinate it in part. As you know, we at the federation represent
our members at two levels: at both at the regional level, because we represent
all the chambers of commerce in Quebec, and the sectoral level. The federation
has more than 1,200 member businesses, grouped together in 21 committees, in the
areas of energy, infrastructure, transportation and logistics. We therefore have
member businesses, and we decided, for all the aforementioned reasons, to give
this project our support. Once we had communicated that fact, we saw in the
field, as did all of you, that there was a lack of balance in the voices
supporting the project.
We, the employer businesses, and some unions involved in major infrastructure
projects therefore decided to join forces to make our voices heard on economic
issues and to communicate the message that this project has the potential to
generate economic impact. Environmental groups joined forces to speak out
against the project, and rightly so because that is legitimate. However, we felt
there was a lack of, not cohesion, but cooperation from the economic sector in
making the project's economic voice heard. That is our contribution and our
involvement in this coalition.
Mr. Laureti: I think it has to be acknowledged, and we said this in
our introduction, that there is also a lack of economic knowledge out there. The
Energy East project is an example of that, but it is also occurring in several
major projects as well. We at the federation work with many businesses involved
in major projects in energy transport, the mining industry, and other sectors.
We often notice that opposition to these projects is greater in some instances
than in others.
However, we notice in every instance that the level of economic knowledge is
very low. The coalition was created partly in response to that observation.
There are the players in the business world, for example, as you heard this
morning from the people from the Conseil du patronat du Quebec. We discussed
this together, and we understand the reasons for the actions we are taking in
When you take a somewhat broader look, you realize that some union groups are
in favour of this project, perhaps for reasons other than ours: they are
representing their members. They tell us their members are not working and are
out of work. They see no major projects in the short term and will therefore
encounter problems. There are families involved in this.
So we are not alone. In other words, many groups that might have different
interests in everyday life find themselves thinking along similar lines in a
file such as this.
Mr. Forget: Sometimes, although not always, we think coalitions are
appropriate. We joined a major coalition this summer, and that is the case again
today. We co-signed an open letter last week on the softwood lumber issue, for
example. Sometimes these people, who theoretically might be working at
cross-purposes with us, such as employers and unions, find it worthwhile to join
forces with us to promote the economic value of a project.
We did it on softwood lumber, and we thought it was appropriate to do it on
the Energy East pipeline project. When we feel it is appropriate to do so, we do
not hesitate to join these coalitions.
Senator Boisvenu: I have one final question and it may be irritating
for you. In speaking out against the project, Mayor Coderre gave its opponents a
lot of credibility, and we saw other mayors from the Montreal region adopt Mayor
Do you have a particular strategy to attract elected representatives to your
coordination committee to support the project?
Mr. Forget: Quite honestly, we have not considered that possibility.
Senator Boisvenu: Because you understand that, without the support of
elected officials, this project will have trouble crossing Montreal.
Mr. Forget: Yes, definitely, and we understand the considerations of
Montreal's elected officials.
Senator Boisvenu: But do you have a communications strategy?
Mr. Forget: With respect to elected officials, the answer is no. No,
not at this time.
The Acting Chair: Thank you for cuing the intervention I made with
other witnesses today. There are 102 representatives of the Province of Quebec
in Ottawa, 78 members of Parliament and 24 senators. I would suggest that you
engage your members to reach out to those members of Parliament and to those
senators, three of whom are here this afternoon, give them some ammunition to
talk to their members of Parliament and tell them that what they hear from
certain places is not necessarily news. Your members of Parliament have a fair
amount of power. One of them of course is the Prime Minister.
The panel that we had this morning was opened to a lot of people. We invited
a lot of people. We invited people from the Aboriginal community to appear today
and they turned us down. Quite frankly I have been very impressed by the quality
of the presentations and the significant support of the people we invited.
We sitting around this table need to take that support and translate it into
action. There is one way you can help do that, and that is by engaging the 102
men and women who represent the Province of Quebec in Ottawa and telling them
that this is a good thing for the Province of Quebec, for Montreal and for rural
Quebec. It is a good thing to create short-term and long-term jobs in Quebec.
That would be a big one to me as someone who has spent a lifetime trying to get
people to engage in the political process.
You would be amazed at how much effect it has on all of us when we receive
representations from members of Parliament. We are senators. We don't need to
worry about getting elected. Senator Doyle was a member of Parliament for a
number of years prior to being appointed to the Senate. He will tell you the
effect it has when constituents call and say, "We like this project.'' I would
suggest that you might give some thought to that.
Mr. Forget: We will look into that with considerable interest. You are
absolutely right, and we will really consider what you just said. I have perhaps
two points I would like to add, with your permission.
First of all, in this project as well, we must distinguish between two
viewpoints because, for some people, this is an issue about an infrastructure
project that will pass through their region, and there are safety issues that go
along with that. For others, it is the type of product that will be transported
through the pipeline that is the issue. If it were another kind of product,
perhaps fewer people would oppose it. I think there are a lot of separate
discussions on this project.
Hydrocarbon use and GHG reductions are another matter. I think we have a
responsibility, and we are trying to take that into consideration. The project
obviously has an economic value, but you have to separate things. We are saying,
and we repeat: we are all in favour of reducing GHGs. We are working on that
with our members. Businesses are making considerable efforts. However, we will
need hydrocarbons for many years to come. What hydrocarbon do we want to use for
the benefit Canadians? So that is a point. All those issues must be separated,
and I think that is a major challenge.
The second point — I imagine this is a question you will consider — is that a
lot of people are turning to government authorities on this matter. These are
major projects involving the national authority and local authorities. Who has
the final word on the implementation of major projects? We are seeing this in
Quebec. There is a debate about the idea of giving more power to the municipal
world, to which we belong. People want to make it a level of government. That is
an interesting and certainly appropriate thought. In the end, however, we must
draw a distinction between the authorization that is granted for major projects
and the ultimate authority granted to municipal elected officials, who at the
same time are closest to their citizens and respond to their citizens' everyday
concerns on the ground.
I would like to be able to give you a response on that issue, but I do not
have one. It is clearly a fundamental issue.
The Acting Chair: Everyone assumes that but everyone is in favour of
more jobs for Quebecers. If I were designing how we are going to sell this, it
would be on the question of more jobs for Quebecers during construction, more
jobs for Quebecers following construction, and a better product and more secure
product for Quebec industry in the long term.
Are there any other questions?
Senator Smith: To continue the discussion that Senator Pratte and
Senator Boisvenu began, you mentioned better information, better transparency,
better organization, risks, benefits, analysis and the three elements: social,
environmental and economic. Now, if we are in a situation in which we bring
interested people together every day, what strategically speaking are the two or
three essential elements required for this project to move forward?
I understand how you can analyze each of the points, but ultimately what is
the key strategy regarding two aspects that will really move this project
forward? Because Quebec must be able to benefit from a reduction in oil imports
and to save part of the dollar figure you mentioned, the $11 billion to $15
billion that is spent to import that resource.
We have to develop our capacity in Canada, and sharing will increase because
Quebec will benefit from it as well as Western Canada. And when we talk about
transfers, transfer-sharing will increase as a result of this project. What then
do you think are the two or three key elements required to complete this
You have your members. You consider the opinions of all stakeholders, the
pros and the cons. You have a feeling. You have experience. You receive
comments. Now what are the two elements? If there were other aspects of
leadership, who should assume leadership in advancing the project?
Mr. Forget: First of all, I would say that, when you look at the
trajectory of this project in particular, the situation in Quebec is somewhat
different from that of Northern Ontario because the pipeline will pass through a
more populated region in Quebec. The issues are obviously somewhat different.
As I mentioned to you earlier, I think there is a heavy responsibility on the
shoulders of the National Energy Board, which must quickly and strategically
demonstrate the process that it introduces and because, in the report it tables,
it will ultimately have to address all aspects of the question and reach to
unbiased decisions. I have no doubt the NEB will not make biased decisions, but
people, the citizens of Quebec, must have the feeling and guarantee that the
process in which the NEB involves us is a process that ultimately arrives at
clear and precise project proposals. That is the first element.
The second, and they are aware of this, will be the promoters' responsibility
to listen to what is said at the NEB or the BAPE, or elsewhere. I think they are
already doing that because the project is constantly evolving. Ultimately,
however, people must also feel that the promoter has heard them and that it will
make the necessary adjustments, obviously to the extent it can, so that this is
a win-win project.
The third element is that we must also feel that our governments believe in
the implementation of major projects in Canada.
Senator Smith: Will the sharing be between the Province of Quebec and
the federal government or among the three parties: Montreal, Quebec and Ottawa?
How do you think it will allocated?
Mr. Forget: The allocation, or the ultimate decision, will obviously
come from the federal government. However, if the Quebec government and elected
municipal officials do not adopt a more favourable position, it will obviously
be more complicated.
However, I think that, if the first two elements I mentioned are in place,
and there is a process and an informed decision, then that will enable elected
officials to adopt a position that is clear and based on actual facts.
Senator Smith: The reason I mention Quebec in connection with the key
role is that, in infrastructure projects, at Infrastructure Canada, many
projects are now handed off to the municipal level and the Federation of
Canadian Municipalities. However, it is different in Quebec. It is the province
that dominates; it is the decision-maker. That is why I mentioned the tripartite
approach to allocation. Because if the Province of Quebec is not stimulated, it
will be difficult to influence Mr. Coderre. Consequently, a kind of tripartite
committee that could play an observer role seems necessary in this situation.
Mr. Forget: Yes, absolutely. Correct me if I am wrong, but this entire
project comes from the private sector, first of all. Consequently, there is no
public money or money from Infrastructure Canada programs for this project.
Second, we are very sensitive to the concerns that Mayor Coderre has expressed
on behalf of his citizens. I think the dialogue between the promoter and the
City of Montreal has to be more constructive in this case to try to find common
ground that will help reassure people about the legitimate concerns of their
Senator Smith: Could an intermediary play the role of bringing the
promoter and Mr. Coderre together? Do you think a trusted third party might be
needed to bridge the gap between the parties? That is just a question because,
as you know, sometimes in agreements an essential element is needed to bring
Mr. Forget: Perhaps, but I cannot really answer that question.
Senator Smith: That was the case when we expanded the Percival Molson
Stadium. You were there.
Mr. Forget: Yes, absolutely. I find it hard to give you an answer, but
whatever can bring the parties together in a project such as this will be
positive; that goes without saying.
Senator Smith: Thank you.
Senator Pratte: I would like to go back to the economic question
because you also mentioned the need for better documenting of the economic
impact of this kind of project. Then you also noted that people may not always
have the necessary economic knowledge. However, something escapes me here.
I get the impression that, for the Energy East project, for example, the
major economic figures have often been cited: 3,000 jobs over nine years and so
on for the construction phase. Those major figures have often been presented,
but we get the impression that people simply do not attach much importance to
them, or else that those figures simply do not count relative to the perceived
Consequently, I would like to hear your interpretation of that. First, is
this project as important is that? And why do people downplay the importance of
Mr. Forget: Here is an example. For more than a decade, the Fédération
des chambres de commerce du Quebec has been pushing for an agency to conduct
economic analyses of projects in Quebec. We began thinking about this when
people wanted to move the Montreal Casino. Several projects were being dropped
at the time because the contrary winds were quite strong.
We at the federation considered the matter and concluded that what would
probably help in implementing projects would be to create an economic analysis
agency that would provide neutral analysis of the economic impact of projects.
When we debated the issue of social acceptability within the Quebec
government last year, I think we managed to convince the government that it was
important to put that kind of agency in place. We have a Bureau d'audiences
publiques sur l'environnement, which purports to take a more neutral look at
environmental issues. The data comes from that organization, but economic data
generally comes from the businesses themselves, and there we sense a lack of
credibility with regard to the relevant data.
Consequently, in the case of Quebec, we believe that agency would be able to
work and to put data that carries some weight on the table and in the public
arena. I am not saying the economic studies conducted by businesses are not well
done or credible, but there is a perception issue. Consequently, we feel this
agency would help improve the influence the economic file exercises.
We also know that studies are being conducted on the value of the Energy East
project. When data is available from very specific fiscal impact studies
conducted by the Department of Finance, that increases credibility.
Consequently, we think that the lack of information on economic aspects and
impacts and the lack of economic data on projects could be partly offset by the
perception of credibility of the data that could be provided by an agency, for
example. We think that might make a difference.
Mr. Laureti: You are right about the figures you mentioned on Energy
East. Discussions are under way about the 3,000 jobs. For some people, that
figure is too low and not worth the trouble.
I want to add to what my colleague just said, that an economic agency could
go beyond the data. On a personal note, I am returning from a brief tour of
Western Canada, where I visited some oil-drilling facilities in Alberta.
I was surprised to learn all this. It is fantastic to see the number of
Quebecers employed there, even though there are fewer now, of course, given the
more unfavourable current situation. Jobs are one thing, but Quebec resources
and infrastructure are also being used in those facilities. However, I do not
think that aspect is being considered in the discussion of information
associated with the Energy East project. Consequently, we feel there is every
reason to make that information known, but first it must be produced.
As Mr. Forget said, TransCanada submits its own job creation studies, but I
do not think I am mistaken in saying it goes much further than that.
Mr. Forget: I will not conceal the fact that we in the business world
tend to be more timid in defending certain files. Consequently, the idea of the
coalition comes partly from that. Perhaps we should be less timid and be more
involved on the public stage.
The Acting Chair: One of the consistent things we have seen today is
the need to continue to educate all of us on the numbers and on the issues, the
no government money and the number of Quebecers working in Alberta.
I am from Nova Scotia. I know there are thousands of young people working in
Alberta from Nova Scotia. With the downturn in the economy you don't have to
look very far in Nova Scotia to see cars with Alberta plates on them at this
time of the year. They are not tourists from Alberta. They are Nova Scotians who
returned from Alberta because they were out of work. These numbers speak volumes
to others when they know how many Quebecers work in Alberta in the industry and
commute back and forth. There is no government money in a project. It is a huge
educational project for all of us, those of us who would like to see the
Gentlemen, thank you very much for your presentation. It has been
enlightening. The questions and answers in our exchange have been very
informative. Again I go back to my earlier comment to remember about your 102
MPs and senators in Ottawa who represent this province. Send them a message,
tell them what your membership thinks, and get your members to call them and
tell them what they think. If it comes down to the crunch and it goes beyond the
National Energy Board and gets appealed up the line to cabinet, you might have a
cabinet minister from Quebec who might have some influence on that decision, I
I wish to welcome our panel of witnesses from the Board of Trade of
Metropolitan Montreal: Michel Leblanc, President and Chief Executive Officer,
and Michelle LLambias Meunier, Director, Corporate Affairs and Community
Please begin you presentation and we will follow with questions.
Michel Leblanc, President and Chief Executive Officer, Board of Trade of
Metropolitan Montreal: Thank you for inviting us here today. A few brief
words of introduction about the Board of Trade of Metropolitan Montreal.
The history of our board is nearly 200 years long, 190 to be more precise.
The board represents 7,000 members of the metropolitan business community. Our
mission since our inception has been to ensure that business conditions and the
business community promote job creation and the creation and growth of
Over time, the board has examined many important files such as the Port of
Montreal, the deployment of railway lines around Montreal, the airport, and the
supply of energy.
In recent years, we have had to take positions on the Enbridge and Energy
East files and on more general matters of natural gas supply and deployment of
the hydroelectric system. We recently discussed the transition to clean energy
as part of the fight against climate change.
It has been clear in our minds from the start that the supply of energy to
the Montreal is a fundamental issue, but one that, from the business community's
standpoint, goes well beyond that region. We are often asked how we can ensure
that a natural resource, oil in this case, is shipped to the markets for that
Canadian resource and that we can get the best price for Canada in our
international trade dealings.
Montreal region businesses that are informed about the sale of our oil know
that, when our actions in foreign markets are limited, we are sometimes subject
to price pressures. If we were to sell solely in the American market, for
example, we would be unable to sell at a fair price and would thus forego
Canadian business revenues and potentially Canadian government revenues in the
form of tax levies. In short, we cannot win if we cannot distribute a resource
in the markets at a fair price.
However, the business community is also sensitive to this issue and aware
that pipeline projects, in this case, must enjoy broad popular support. The
business community has also been sensitive to the way these projects are
presented to the public.
In the case of Energy East, we have noted deficiencies in the way the project
is being presented. We have conducted our own analysis of the situation, and I
will be making a few recommendations later on. What we can say is that public
opinion is extremely fragmented, that the public is afraid of this project, and
that it does not necessarily have a clear understanding of it.
At the same time, the business community is reluctant to come out openly in
favour of Energy East because the project is getting bad press and is poorly
perceived by a segment of the population. Businesses are concerned about the
impact on their reputation if they are associated with the project. Even if they
support it, they are uneasy about saying so in public. They are relying on
organizations such as the Fédération des chambres de commerce and the Board of
Trade to transmit the message.
The last point I would like to raise is that businesses are sensitive to the
fact that we should apply a more comprehensive logic to projects rather than
merely adopt a piecemeal approach. There are two aspects to this. I told the
Energy East and TransCanada people that Quebec cannot be a friend just when we
want to allow a pipeline to pass through the province. Quebec cannot suddenly
become a place of interest when someone wants to build a pipeline through it.
The National Energy Board cannot come to Quebec just to evaluate a project of
this scale. If there is no long-term strategy, if institutions such as the
National Energy Board do not have an established presence, and if there is no
strategy to deploy the impacts of the oil companies or to distribute oil across
Canada, including Quebec, we should not be surprised to meet with resistance the
day we want to ask people to approve a project they are concerned about.
Consequently, the first message is about duration, and it is that there should
be a comprehensive approach, not just one that is adopted at a particular time.
The second message is that there must be an integrated approach to providing
access to, and distributing, oil and all types of energy.
In the case of Energy East, we wasted a year and a half on the issue of
access to natural gas for Quebec. Energy East initially planned to build a gas
pipeline narrower than the existing one and to use it to transport oil.
Discussions were held on access to natural gas, TransCanada explained its
position, and Quebec businesses outlined their concerns. That all took time to
If we had a clear national strategy that identified future energy needs and
future sources of energy supply, there would be a much more informed discussion
about the need to build new infrastructure and the implications of building for
other sources of energy supply.
Two recommendations therefore follow from that statement. The first is that
there be visible deployment across the province, over time, not just when we
need public support. The second is that a more integrated approach be adopted to
energy supply, one that includes all energy sources.
That concludes my introductory remarks. Now we may discuss the subject. If
you wish, we can move on to the period of questions. That will allow me to
clarify certain points.
The Acting Chair: Thank you very much, Mr. Leblanc.
Senator Boisvenu, you may ask the first question.
Senator Boisvenu: Thank you for your presentation.
You have a very accurate perception of the social aspects of the issues. This
cleavage has occurred in Quebec for various reasons: poor preparation, poor
information, the entire anti-oil movement, which I think has created this kind
of alarm in society, and the accident in Lac-Mégantic, which has added to that.
We can see the picture behind all this. It is quite diabolical.
This project cannot be carried out without support from politicians. One of
the basic problems, or at least one of the factors that has exacerbated the
crisis, is obviously the position that Mayor Coderre has adopted.
Do you think these positions are irreconcilable? Because I think this is
quite a challenge.
Mr. Leblanc: Well, if you want to put questions directly to Mayor
Coderre, go ahead.
What I am saying is very simple: I have a lot of respect for politicians who
listen to public opinion. In the circumstances, I do not think Mayor Coderre is
at odds with public opinion. You may wonder whether Mayor Coderre should
exercise leadership and run the risk of breaking with public opinion. I will
leave it to the political process to play itself out.
What I think is important in this case is to act on public opinion, not to
think that there is a politician who has adopted a position that will make the
public rally around.
In the case of TransCanada's Energy East project, we have been discussing the
matter for four years. I have officially asked them six or seven times why they
do not consider investing in a venture capital fund for applied green energy
technologies? Not just Energy East. Go and see Suncor and other Alberta
businesses, and tell them you are going to create a fund to invest in applied
green energy technologies and that you are going to locate that fund in
Montreal. Let us not go and greenwash ourselves. We just have to show that there
is a national strategy for simultaneously exploiting natural resources,
producing and distributing oil, and investing in technologies that will improve
the sector's performance or replacement technologies.
In other words, it is important to have a strategy that strengthens the
economies of Quebec and Montreal from the revenues and profits made in the
energy field. People have been telling me for four years that this is an
excellent idea and that it will get done. And yet nothing has been done in that
The impression that gives is that we in the oil industry hesitate to make
investments that would have a positive impact elsewhere, in the rest of Canada.
We conduct media exercises, but that is generally not what convinces people.
I cited the example of an initiative that might reposition the debate to a
degree, although not entirely. I think that is how we are going to win over
small businesses and the general public. That does not mean no one will
ultimately feel nervous. We will show that the energy sector is willing to take
action to create value across the country.
Before throwing stones at any politician exercising caution, we must first
reassure the public. Then politicians can exercise their leadership.
Senator Boisvenu: Then am I to understand that is one of your four
Mr. Leblanc: This is one of my four proposals. The most formal one is
that the Canadian energy sector must have a concerted strategy to ensure its
impact is felt elsewhere in the country. It must invest, and it must invest in
what is structural, where the economy is. And, in Quebec's case, introduce green
technologies and add venture capital, and you have a winning formula.
As I said earlier, the idea is also to work over the long term, not just in
the present and then withdraw in two years if no results are in forthcoming.
Senator Pratte: I want to continue along the same lines. You mentioned
a strategy not only in the private energy sector, but also in the institutional
sector, at the National Energy Board, for example. I would like to hear more on
that subject. What do you foresee? One of the current problems is the
credibility of the National Energy Board. What would increase the board's
credibility, particularly in Quebec?
Mr. Leblanc: To recall the facts, I will simply say that I am included
as one of the people the board has met. I think I met them the day before I met
a certain politician, and it was precisely for that purpose. The board told us,
"We are going to conduct a public consultation exercise on a major project. We
want to be more involved in Quebec. How are we perceived in Quebec?''
I told them, first, that the BAPE is the provincial instrument we constantly
hear about, in both good and bad terms, but we hear about it. We know it is
constantly involved in the assessment of projects.
We very rarely hear about the National Energy Board. People perceive it as an
institution that is close to the industry it should normally be regulating or at
First of all, I tell them they should have competent people, francophones, in
an office in Quebec, who can explain how it works and will attest to the work
the board does as assessments are being conducted here or elsewhere. They should
find people who have charisma, people who will be invited to appear on TV and
who will explain the work the board does. That is the first point.
Second, they should go and explain clearly and well in advance how the
process will be conducted on a particular project, obviously Energy East in this
case. I personally had not anticipated that meeting them might give the
impression that we were going to influence their findings, particularly since
they ultimately asked me who else they could speak to. I suggested they meet
Steven Guilbeault and Yves-Thomas Dorval, who work as part of a group to
establish closer relations between the business and environmental communities. I
think they could help them.
In short, my impression is that the National Energy Board has to be involved
here in a lasting way, presenting its methodology, explaining what it does, and
possibly appointing people, board members or leaders, who have integrity and who
are known. It has to conduct a public relations exercise, and the appointment of
those individuals is part of that exercise.
Senator Pratte: That is true for Quebec, but obviously for other
regions of Canada as well.
Mr. Leblanc: Certainly, but I do not know them.
Senator Pratte: Do you think that, if we acted perhaps more
intelligently with regard to public opinion than we have previously done,
because safety, environmental and economic issues are very much involved, people
would understand the situation?
Because the previous speakers told us that the economic message was perhaps
not getting through as well and that safety issues were clearly perceived as
more important. Other speakers said bad news always gets more media coverage
than good news.
Can people tell the difference and is it possible to reassure the public?
Mr. Leblanc: My impression is that this job will take time. We would
like public opinion to come around very quickly and for people to discover the
truth, which I do not think will happen.
That is why I talked about the fund earlier. I think this is an opportunity
to go after part of the private SME sector and to invest to ensure we send a
message. Even though we are in the oil industry, we are aware we must improve
and make it known that green technologies are positive and that we want to
support the growth of those kinds of businesses.
Like what happened with shale gas, I get the impression that, when people are
afraid, it is hard to come up with rational arguments to reassure them and tell
them this is not dangerous.
I think there is an enormous paradox here. In the case of the accident in
Lac-Mégantic — in a world in which we had a business with effective
communications and enough competent people to explain the situation clearly — we
could have warned them to stop transporting hazardous material by rail and
transported it instead through a new pipeline. That pipeline would have been
installed in the ground, we would have known exactly where it was, and it would
have been well monitored.
That seems obvious to me. We could have reassured the public. However, we
told them a pipeline would not work satisfactorily, that we might have a
contingency fund that might not be up to the task, that we might have insurance
that might be inadequate, and that we might have a regulatory body that might be
in cahoots with the people promoting the project.
Consequently, rather than reassure the public, we spread doubt. We have to
address each of these elements. We have to show that the pipeline is cutting
edge. We have to explain that this type of pipe rarely leaks elsewhere in the
world and that, if that occurred, efficient measures would be employed to detect
the leak quickly. We have to tell them that contingency funds will be provided
to address any situation and that insurance may possibly be provided.
We can start this way and then move on to economic impact. Construction is a
major issue for the construction industry, but if the public is afraid, it will
definitely be insensitive to the economic impact argument. If we talk about
economic impact to raise fears, that will not work.
Senator Pratte: Given the current level of opposition — even though I
agree with the picture you are painting and the current state of opinion, — the
considerable efforts that must be made to convince the public to change its
mind, the energy investments, and even the major financial investments, do you
think this project is worthwhile?
Mr. Leblanc: The impact for the country would be so high if we sold at
current prices. Imagine what we could do with that money, not only in the
businesses, but also in the public treasury. In my opinion, we must try to find
a way to sell our oil at current prices.
My impression is that it will not be immediate and that it will take time. I
think we will eventually have to build it. We must do it. I am not sure we will
There is real fear out there, real public mistrust. There is confusion
between oil production and consumption, to the point where people feel they have
an equivalent toxic impact on the environment.
Consequently, we can take action to address oil consumption, but we can also
be the producers of the oil we consume and potentially be a producer that is
perhaps better than other international producers. Some mornings I get up and
say to myself I would not like to be in charge of sales. Other mornings I think
that, if we manage to sell this project, it will benefit society as a whole.
The Acting Chair: Thank you very much.
Senator Smith, you have the floor.
Senator Smith: Good afternoon, Michel.
Mr. Leblanc: Good afternoon.
Senator Smith: Congratulations, you are the star who will restart the
Energy East project.
So you have studied, you have spoken, and you have really created an action
plan in your mind. What would be the first key step in restarting this project?
Mr. Leblanc: I would go and see all the oil producers in Alberta and I
would say to them,
"How much are you willing to invest in the communities? How many millions or
hundreds of millions of dollars will you invest so that we can send your oil
through that pipeline?'' Because I am going to go on the ground over there and
argue that that money will make a difference in their lives.
Then I would go and see the communities and I would ask them what investment
we could make?
Incidentally, I would like to say that my brother worked for the Centre for
International Studies and Cooperation, the CECI, in Guatemala during the signing
of the peace accords and travelled in the areas where guérilleros
operated. There they asked people, "What project would make a difference in your
community? A community centre? Repairing a roof? Building a school? Having a
hospital?'' And that is how the communities buried the hatchet and accepted
I do not know whether it will last, but I think that, when we want to
convince people who are concerned, we should go to where they are and tell them
that we are going to invest and that we are going to be there. We will no doubt
be accused of wanting to buy off communities, but I think that is the solution.
This project will require a lot of money, but as I said earlier, it will be
very profitable for Albertan corporations, which will be able to sell their oil
at current prices. This must benefit communities there. Perhaps the price to pay
or the investment to make would been less if we had done a better job four years
ago. Now it is hard to convince people that we are serious and that this is
Senator Smith: Does Energy East have the superstar to carry out this
kind of project or should it be looking for a superstar?
Mr. Leblanc: They didn't hire me. I don't know.
I am not throwing stones at anyone, but I initially witnessed incompetent
communications. I witnessed awkward human relations with the communities long
before what we saw on Energy East. I would tell the Alberta corporations:
"Where were you? When you were making the big bucks and you did not need us
where were you? When did you say Quebec matters in your history? When did
you say we need to invest elsewhere in the country so that whenever we will
need them, because we will need access, they will be open to our problem?''
Senator Smith: Listening to you leads me to believe that someone from
Alberta would be able to communicate with Quebecers because that person would
have to convince the people of Alberta to go that road.
Mr. Leblanc: I did not say it would take someone from Alberta. I think
it would take someone from here, who would go to Alberta and say,
"Sign with your blood because I am going to sell that. Sign with your
Senator Smith: That is why I wanted to ask you. Thank you.
The Acting Chair: Mr. Leblanc, I don't know whether you have restarted
the debate entirely by yourself but I tell say that you have added one heck of a
lot to it. You have come with a positive attitude. If their ears are not burning
in Calgary today they should be because you have hit multiple points dead on.
You are a little late to the dance here, boys and girls, to expect to be able
to waltz into any part of the country and get blanket support. I am a big
supporter of Energy East but you have to do your homework. As Senator Smith said
you have come up with some interesting ideas.
How would you see the venture capital for green energy? You said centred in
Montreal. I like the idea of the venture capital for green energy. I am not so
sure they will buy centred in Montreal. I am not sure they will buy it centred
anywhere. If they buy it is number one. Where it is centered is the second
question. What would you see the process being in managing that fund?
Mr. Leblanc: I would say there are two or three elements there. If it
is located in Alberta it defeats the purpose.
The Acting Chair: Yes, I agree with that.
Mr. Leblanc: I would say probably a two head office approach with one
in Vancouver and one in Montreal. That would be my strong recommendation.
The Acting Chair: I would support Halifax.
Mr. Leblanc: Maybe a third one. That was my answer. You want to show
you are there, not that you are over there and you care that you are there. That
is one element.
The second element is maybe you could invite them if you are not coming. We
have in Montreal a Green Tech Cluster. With Denis Leclerc, the leader of that
cluster, we discussed that possibility together.
Clearly there are already people who are concerned about the accessibility of
venture capital for clean tech/green tech. They are thinking about it. They have
approached other potential funders. They could quickly say here is how it would
be built or funded. It would go by rounds. In the first round of that amount of
money here is how you could govern the fund. When I said, "located here'' I did
not mean funding only Quebec companies.
The Acting Chair: No, I appreciate that.
Mr. Leclerc: It is Canadian clean tech applied to the energy sector.
It is a multiple round approach. You do one now. Is it $30 million? Is it
35million? Does it take two or three years to disburse or to invest?
Then you have a third round. If the energy prices go up maybe you could
invest even more. Then you build credibility about the sector. The sector is not
just about extracting oil or producing oil. It is also about improving
technologies and having a lighter impact on the environment. You build it like
that. That is how it goes.
On specifics about governance and about co-funding I could provide
information but I would say Denis Leclerc is probably the right person because
he lives and works with the clean tech companies. He is always looking for ways
to finance them so he would be the right person.
The Acting Chair: This has been a very enlightening session, Mr.
Leblanc, and we would like to thank you for that and for restarting the process.
You have given some energy to the energy project. I appreciate it and hope that
we can request that in a report when we do it. Thank you for your participation
Colleagues, we have just double-checked. As you know I sent an outstanding
invitation to those people who protested at the National Energy Board stating
that if they wanted to come to see us I would grant them some time at the table
this afternoon. We don't seem to have any takers. The big bad Senate was in
town. I am joking. We didn't frighten them off but we did have an open
Thank you again.
(The committee adjourned.)