Standing Senate Committee on Transport and Communications
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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 the senators.


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 size.

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 projects.

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 questions.

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 to do.

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 organizations involved.

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 projects.

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 Canada.

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- makers.

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 case.

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 not dead?''

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 expression.

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 start over.

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 this file.

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 Coderre's position.

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 transaction?

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 fellow citizens.

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 people together.

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 risks.

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 these figures?

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 process.

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 would suggest.

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 Relations.

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 businesses.

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 resolve.

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 time.

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 proposals?

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 least analyzing.

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 succeed.

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 peace.

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 safe. Voilà.

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 blood.''

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 as well.

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 invitation.

Thank you again.

(The committee adjourned.)