Standing Senate Committee on Transport and Communications

Proceedings of the Standing Senate Committee on
Transport and Communications

Issue No. 7 - Evidence, October 21, 2016

HALIFAX, Friday, October 21, 2016

The Standing Senate Committee on Transport and Communications met this day at 1 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 Michael L. MacDonald (Deputy Chair) in the chair.


The Deputy Chair: Honourable senators, this afternoon the committee is continuing its study on 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.

I would like to introduce our first witness of this afternoon from the Ecology Action Centre, Stephen Thomas, Energy Campaign Coordinator.

Please begin your presentation, Mr. Thomas, and afterward the senators will have questions.

Stephen Thomas, Energy Campaign Coordinator, Ecology Action Centre: I am the Energy Campaign Coordinator at the Ecology Action Centre here in Halifax. I would like to begin my statements in recognition and gratitude for our presence on unceded Mi'kmaq territory in K'jipuktuk or Halifax. I wish to thank the Chair, the Standing Committee on Transport and Communications, and all members of the standing committee for inviting me here today to speak on behalf of the Ecology Action Centre and its members.

Since 1971 the Ecology Action Centre or EAC has been working to build a healthier and more sustainable Nova Scotia and Atlantic Canada. Today the EAC is Atlantic Canada's largest environmental advocacy organization with over 5,000 members, 500 volunteers, 45 staff and seven action areas including the energy action team which I work for.

The EAC works closely with social and natural scientists and uses detailed policy analysis to encourage a society that respects and protects nature and provides environmentally and economically sustainable solutions for its citizens.

The EAC and I regularly participate as intervenors in project reviews and processes with the Nova Scotia Utility and Review Board, the National Energy Board and environmental assessment review panels.

I note that on March 9 of this year the Senate moved to approve the undertaking that we are here today to speak about, the study on 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.

The activities under this study will cost Canadians a total of $354,652 as per the budget approved April 12, 2016. The EAC would like to state for clarity that we don't necessarily feel it is the best place for the Senate to be spending resources on developing or participating in a strategy to facilitate the transport of crude oil to Eastern Canadian refineries or to ports on the east and west coasts of Canada for export.

The Ecology Action Centre and our members see that this study and the committee's focus are somewhat contradictory to a number of high profile federal undertakings currently under way, including the pan-Canadian framework on clean growth and climate change and particularly the National Energy Board modernization process. Also under way is the Senate Standing Committee on Energy, The Environment and Natural Resources study on the effects of transitioning to a low carbon economy, the successful vote in the House of Commons to ratify the Paris Agreement this October, Canada's future and current greenhouse gas reduction targets under the UNFCCC INDC process and most appropriately or most importantly I feel it might be in conflict with the National Energy Board's independent review of the TransCanada Energy East pipeline on this coast and the Kinder Morgan Trans Mountain pipeline on the West Coast.

Specifically we feel strongly that it is not necessarily the place of the federal government to facilitate a social licence for pipelines or any other project. We feel that social licence can only come from communities and that they must have the opportunity to accept or deny that licence through a fair, thorough regulatory process. These regulatory processes must have room for communities and stakeholders to choose and to deny social licence on their terms.

At a time when the federal government is undertaking extensive consultation with provinces, territories, First Nations, scientists and many stakeholders across Canada on these issues, we feel that this Senate committee's work on this study is in bad faith and a contradictory use of resources for the federal government.

I certainly am not blind to the reality that lies before us and to the challenges that an ambitious, just transition to a decarbonized economy pose for Canadian society. However I believe that this is a moment and this moment provides us an opportunity for imagination, for research and for vision.

I believe Canadians and Atlantic Canadians in particular have much to celebrate in terms of the steps that we have made to reduce emissions, to work together to reimagine our economies, and to ensure that we have vibrant, healthy communities for our grandchildren to inherit.

Across Canada we also have strong treaties that provide Aboriginal peoples clear voice and consultative processes in acquiring free, prior and informed consent. I feel that the focus of the Senate committee's study compromises that past success, undermines important consultative processes with Aboriginal peoples and somewhat limits the imagination.

I would love to live in a Canada where the Senate is undertaking studies on supporting Canadians and Aboriginal peoples through the justice based transition to a decarbonized economy. I recognize that in the earlier session this morning the Mi'kmaq of Nova Scotia, in particular KMK and Sipekne'katik were here to give their views. I support the standing committee in making every effort to consult with the Mi'kmaq of Nova Scotia when considering issues that affect their traditional lands, waters and livelihoods.

I have a number of supporting documents with me here today which I am happy to reference and share with the committee electronically or in person. I am open to hearing questions and responses from the committee and participants here today. I am happy to engage in further discussion in this topic after today's session is complete on the specific questions laid out in the study that the Senate is currently undertaking.

This concludes my opening statement. Thank you for your opportunity and thank you for your time.

Senator Mercer: It is usually at this point that I thank the witness for being here, but I am not sure why you are here now that you have told us you don't think we should be spending the money. You don't think we should be doing the study but you are here to say this.

You don't understand the difference between the National Energy Board and the Parliament of Canada. The National Energy Board has a specific role. The Parliament of Canada and either the House of Commons or the Senate committees can study certain subjects that they want on behalf of their constituents and on behalf of Canadians.

I don't understand you. This makes absolutely no sense to me. You say that the federal government has no place in helping to facilitate social licence for private enterprise. Then maybe we should just close the place down. This could be the best recommendation. We will close Parliament. Note: no taxes, as it is. However you will have no donors to the Ecology Action Centre because guess what? Everybody will be unemployed. Let's get real here.

The job of the Government of Canada, collectively the House of Commons and the Senate, is to make sure the country runs smoothly. How do you expect the country to run smoothly if we abandon the one particular industry that for the past few years has been driving the economy of this country? That is the gas and oil sector. How do you expect that to happen? How do you expect the people to be working? How do you expect your donors to have any money to give you if the gas and oil sector were to come to a screaming halt tomorrow?

Mr. Thomas: Thank you for the question. If I understand it, you are asking for me to explain what other opportunities in our economy exist other than the oil and gas sector for employment.

Senator Mercer: No, that isn't what I asked at all. We understand that there are all kinds of other opportunities. We also understand that it would be better if we were moving away from the carbon sector.

However that is not happening tomorrow. It is not going to happen today. It is not going to happen tomorrow. But between now and the time we find better ways of doing things this is where we are at. Isn't it the job of the Government of Canada to maximize a positive economic situation for its citizens? Isn't that what our job is?

Mr. Thomas: Absolutely.

Senator Mercer: Thank you very much.

Mr. Thomas: What I am suggesting is not that we shut down the oil and gas sector certainly in Alberta or here on the East Coast today or tomorrow, but the scale of development that is often talked about in these proceedings and that is talked about at the National Energy Board with the two pipelines that I mentioned, Energy East and the Kinder Morgan Trans Mountain pipeline, we are talking about infrastructure that locks us into that way of meeting our energy needs and that way of depending on that industry in our economy for 30, 40 or 50 years. It is my view that timescale is too long and too large.

I couldn't agree more and I tried to make that clear in my statement that I am not blind to how difficult the path before us is. It necessitates vision and research and working together to imagine a different way of having our economy run. With all of the other processes that are going on, with all of the talk at the federal government for taking the issue of the climate crisis seriously and with the adoption of the Paris Agreement, I don't see that the federal government and in this case the Senate committee spending resources trying to facilitate or in some way augment or manufacture social licence or consent for fossil fuel projects, and in this case oil transport by pipeline or rail.

I don't see those two things existing in the same world or existing in the same Canada that we are heading toward. That is what I was intending to flag with my statements and the conversation that I would love to have.

Senator Mercer: In our terms of reference we are talking about finding a way to get the product to tidewater and we are discussing pipelines. We haven't spent much time talking about rail other than in referencing it as probably not a great idea after Lac-Mégantic. You think we are locked in for 30, 40 or 50 years. I don't know that 30, 40 or 50 years will be enough time because the development of alternates has not happened as quickly as we would like. We are all in favour of alternatives, but we are here and we are now. The world is dependent on gas and oil.

We have the third largest reserves of gas and oil in the world. Should we not capitalize on that to employ Canadians, to bring wealth to Canada, and to bring wealth to Alberta and Saskatchewan so that they can pay equalization payments so that those of us who live here in Nova Scotia can have good quality health care, can have good education, can have good highways to drive on, can have good public transit, or whatever else you might want to think of that we have an abundance of in Nova Scotia?

Mr. Thomas: Thank you again. I think I don't disagree with you on those points. I think I enjoy the social services that exist for Canadian citizens and I think that we should continue to provide them. I think that what perhaps I am trying to present here today is for us to have a bit more imagination than to say that the oil and gas sector is the only or the largest or a major way of us providing that for Canadians.

I think the moment that I was speaking about in my opening statement is the moment that we are in, in terms of the climate crisis, and in terms of our understanding of the signing of the Paris Agreement and the proceedings that led up to it in the first Conference of Parties 21 at the UNFCCC.

You asked very clearly that Canada has the third largest oil reserves. Is what I am saying that we shouldn't exploit them fully or we shouldn't develop those resources fully? That is what I am saying, that we should not develop those resources fully.

Senator Mercer: What is the alternative? Let's say we said, "Stephen, that is a good idea.'' We will call up the Premier of Alberta tomorrow and the Premier of Saskatchewan and say, "Close her down. We are getting out of the business.''

What is the alternative? What do we do? I don't think we are going to find anyone that is going to disagree with you that moving to an alternative energy that does not pollute and does not cause global warming isn't a good thing. We all agree with that, but it is not happening tomorrow.

You continue to support the benefits we have here in Nova Scotia. I am a Nova Scotia resident, but you don't tell me how we are going to pay for them if we shut down the gas and oil sector. How do we pay for this? How do we pay for the wonderful lifestyle we have in this province if it wasn't for gas and oil?

Mr. Thomas: For clarity, I am not coming here with a plan for our economy. I am not coming here with my own one, two, three step plan for getting there. What I am asking the Senate committee to consider is other ways of getting there than oil and gas development.

As you would have heard in my opening statement, I question whether or not the resources that are being spent in this study are the most opportune or the most wise use of those resources when we have a renewable electricity and a renewable energy sector in Canada that is growing and could use support and could use a study for how best we transition to that low carbon economy. That is what I meant. We need to come together and have discussions about that instead of having discussions about how to further develop existing oil and gas resources.

Senator Mercer: I was just going to actually refer to you because you do sit on the energy committee.

The Deputy Chair: I am on the energy committee and right now we are studying the transition to a low carbon economy. That is in progress.

Senator Mercer: Amazingly we are capable of doing two things at once.

The Deputy Chair: Two things at one time, yes.

Senator Mercer: Imagine.

Senator Greene: I am not sure if I want to ask any questions actually. First of all I was also taken aback by your presentation. You are obviously an idealist and that is great, but what you presented is not practical for the immediate future. I certainly share Senator Mercer's sense of outrage. Maybe outrage is a little strong.

Senator Mercer: It is strong.

Senator Greene: It is strong, yes. He didn't present it in a strong way but his questioning had a flavour of that and I share that also. However I will ask you a couple of questions and one is a basic one. What is a social licence? What is that? Where can I apply for one?

Mr. Thomas: Thank you for the question. I think that is at the crux of what the disagreement is here today. Although I wanted to be honest in my opening statement and I wanted to present how the Ecology Action Centre and I feel on this issue, I didn't intend to disrespect the committee. I did want to be honest and did want to provide a point of view that perhaps is different than the impetus for this study.

What is social licence and how does apply for one or how does a government facilitate getting social licence?

Senator Greene: Yes, and how do you know you have one when you have one?

Mr. Thomas: I think you know when you don't have one. I think in a case of the Energy East pipeline it is clear that perhaps that is not being presented.

I think social licence comes from communities. It comes from municipalities. It comes from sectors of Canadian society. It comes from Aboriginal peoples, from individual nations within Canada. I think through regulatory and consultative processes the communities grant social licence if those communities have the opportunity to participate in those processes, have the opportunity to understand the project and to understand the way of developing Canada's economy, and have the opportunity to make a decision.

Senator Greene: How do you know when a community is granting? Is there a vote taken?

Mr. Thomas: I am sure that it is different in every community. I think that in the case of the Assembly of First Nations in Quebec and Labrador that has unanimously come out against the Energy East pipeline, in the case of 300 Quebec municipalities including Montreal that have come out against the Energy East pipeline and in the case of the fishers and the coastal industries along the Bay of Fundy in Nova Scotia have come out against the pipeline, I think you are beginning to see a picture painted about how that social licence perhaps does not exist. It certainly doesn't exist along all segments of this 4,600-kilometre pipeline in the case of Energy East.

I would agree with the Senate and the National Energy Board that it is difficult to understand exactly. Perhaps that is not true. When given the opportunity it is clear consent is being given and when given the opportunity it is clear when consent is not being given. I think social licence and consent are tied together very closely.

When I speak of strong robust regulatory processes at the National Energy Board or through environmental assessment processes, being given that opportunity for communities, municipalities and First Nations to provide consent or withhold consent is important in those processes.

Senator Greene: You said that social licence and consent are tied together but they are not the same. Is that what you are saying? They are not the same. Are they the same?

Mr. Thomas: I don't know. In how social licence is talked about with this government and with this study I think they are tied very closely with consent and could be considered the same thing.

Senator Greene: Because social licence is so difficult to quantify is it a useful term?

Mr. Thomas: I think it paints a picture. I think it is a useful term. In general it paints a picture about whether or not Canadian society generally gives licence for projects, developments and ways of developing our economy. It is a useful term. I think that consent is a more useful term.

Senator Greene: In what way?

Mr. Thomas: Because it is more clear, because it gives the communities, municipalities and First Nations a voice.

Senator Greene: Then why don't we use the word consent instead of social licence?

Mr. Thomas: I think that would be a good idea. I think you could ask communities, ask First Nations, ask municipalities, and that would be a more straightforward way of going about the process.

Senator Greene: I agree with that.

Mr. Thomas: Thank you.


Senator Boisvenu: On your website, you state that you are the spokesperson for Nova Scotians when it comes to the environment. Is that correct?


Mr. Thomas: Thank you for the question. If I understand it correctly, I do not consider myself the spokesperson on the environment for Nova Scotia. I am only here today representing the Ecology Action Centre and its members.


Senator Boisvenu: However, on your website, it clearly says: Ecology Action Centre. That's you, isn't it, the spokesperson for Nova Scotians on the environment? Does that mean that the position you express today represents the position of all of those who work in the environmental area in your province?


Mr. Thomas: No. I am confused about where you are getting that I am claiming to be a spokesperson for all Nova Scotians or all folks who care about the environment in Nova Scotia. I don't pretend to represent all people or all views in Nova Scotia. I am only here and can only be here as Stephen Thomas from the Ecology Action Centre.


Senator Boisvenu: I am trying to understand. Your position makes me very confused. Are you speaking on your own behalf or on behalf of your association?


Mr. Thomas: I am here on behalf of my group, the Ecology Action Centre.


Senator Boisvenu: I'll reformulate my question. If you are speaking on behalf of your group, and your group claims to be the organization that speaks for Nova Scotians on the environment, does that mean that your position reflects the position of all those who work in the environmental area in your province? That is what your website tells us. I am simply trying to understand, because we heard another environmental group in another province, and on its website, there were statements that were false. That does not help us very much to have a dialogue with environmental groups.

This morning we welcomed Aboriginal groups, people who have very legitimate claims, and who are rather open in discussing the file. With environmental groups, my approach has always been based on sustainable development. Sustainable development means economic development that is not unbridled, but takes into account the concerns of environmental groups. I understand that your group positions itself elsewhere, by stating that it is against all types of development. Is that correct?


Mr. Thomas: No, and I apologize for being confused about from where exactly you are getting those statements or that idea. Again the Ecology Action Centre and I do not feel as if the way to get ourselves out of the trajectory toward the climate crisis is to shut down oil and gas development or all extraction today or tomorrow.

What I am concerned about is not seeing a plan to phase it out or have a managed decline of those industries at all. What I see are plans like the ones being proposed here today that facilitate further expansion of those industries and resources. That is the point that I don't agree with.

I think we have industries that we need to support and certainly workers in those industries that we need to pay a lot of attention to in supporting as we transition to a low carbon economy.


Senator Boisvenu: Mr. Thomas, do you follow the development of the electric automobile industry, among others?


Mr. Thomas: Yes, I am.


Senator Boisvenu: So we know that that type of completely electric automobile is the vehicle of the future. The chair said it earlier; we are currently doing a study on the transition from gas-powered vehicles to electric vehicles. However, to be realistic, we know that that transition will not happen in the short term. It will take one or two decades. Currently less than 1 per cent of the energy people use is what we call green energy, that is to say wind, solar or electric energy. But electricity has an impact on the environment. Quebec developed a lot of rivers and this had an impact on the environment.

To the extent that this transition has begun, is it possible that groups like yours, whose positions I would describe as radical, may adopt a sustainable development approach, while being aware that oil and gas energy may be used to develop new energies, but also to improve conditions for certain communities? This is the example we heard this morning with the Aboriginal groups, who feel this can represent an interesting tool for social development that could allow them to have access to new energy, which will be considerably more expensive than conventional energy. Do we agree on that? A gas-powered vehicle today costs between $10,000 and $15,000. The electric car costs $100,000. So if your group states that tomorrow morning it wants us to put an end to the use of oil, this will prevent part of society from having access to new energies, because of the costs associated with it today. You are aware of that? You are going to create social inequity between the haves, who will have access to that more costly energy, and the have-nots who will not have access to it. So you are condemning people like Aboriginal groups with whom we talked this morning to greater poverty.


Mr. Thomas: Wow, I intend to answer the question with respect, but I think you are putting an awful lot of words in my mouth here today and I think it is difficult for me to know where to begin here.

First of all, nothing of what I have said condemns Aboriginal peoples or any sector of Canadian society to lower standards of living. I don't intend to say that and I feel I never have said that.


Senator Boisvenu: That is not what I said.


Mr. Thomas: Pardon me, if it was translation.


Senator Boisvenu: What I said was that by neglecting the use of conventional resources now, such as energy —


Mr. Thomas: I am not insisting on an immediate end.


Senator Boisvenu: In that case, I apologize. I thought that was what I heard.


Mr. Thomas: Pardon me. It must have been a mistake in perhaps my words or the translation. I do not intend to suggest an immediate end to oil and gas resources. I understand and I support a measured, controlled and supported decline over time of oil and gas and extraction resources in a way that in fact supports First Nations and low income Canadians first in our considerations of how we are moving toward that low carbon economy.


Senator Boisvenu: I am grateful for the nuance. Thank you.


Mr. Thomas: My apologies.

The Deputy Chair: I have a few questions for you, Mr. Thomas. Refineries in Eastern Canada are presently fed by rail and ship bottoms, ships bringing in crude from places like Saudi Arabia. All the ships that go through to New Brunswick or to Quebec come through Nova Scotia's water. A pipeline of course would replace or give us the opportunity to replace all this imported oil with domestic oil and with a safer delivery system.

These refineries are still operating. They are not going to be shutting down in the next 5, 10, 15 or 20 years. I am just curious. Why do you think it is a better idea for us to bring oil in through our water from other countries and to bring it in by rail from other countries like the United States when we could provide a safer, more reliableand probably less expensive source domestically?

You have to accept the premise or the fact that oil is getting there now through conventional means. Whether it is the highway, by rail or through ships, it is not going to stop. The lack of a pipeline is not going to stop oil from getting to these facilities. What is your rationale?

Mr. Thomas: Again, for clarity, my biggest concern here is not the use today of oil and gas or even coal resources and fossil fuels. It is the continued and expanded use of those resources past what science tells us is the safe limit, what science tells us is our fair share of that safe limit.

The Deputy Chair: With respect, that is not the issue here. These refineries are receiving petroleum anyway. We are looking for a solution, a safer, more reliable and less expensive solution, which would create more wealth in this country that would be used to help communities and to help people. The oil is going to get to these refineries any way. It is getting there now.

Mr. Thomas: Right.

The Deputy Chair: Why would you deny the country a better, more efficient, more cost efficient, safer and cleaner way of getting petroleum to these refineries?

Mr. Thomas: If there were a project being proposed to bring Canadian crude oil to Canadian refineries, especially here on the East Coast of Canada, I would be in a position to discuss that project.

The Deputy Chair: That is what it is. That is what the project is.

Mr. Thomas: Speaking specifically about the Energy East pipeline, greater than 80 per cent of the diluted bitumen in that pipeline is for export raw through the Bay of Fundy. That is my issue. My issue is that 1.1 million barrels a day will facilitate the expansion through what I think is the unsafe limit of the Alberta oil sands.

The Deputy Chair: Now we are getting somewhere. One of my disappointments today with your being here is not your political rant at the start of this. We hear lots of political rants in Ottawa. I can live with that, but I am a Conservative and one of those people who are willing to listen to the Ecology Action Centre because I think they do some good work.

Mr. Thomas: Thank you.

The Deputy Chair: I was hoping to hear a constructive analysis of the handling of bitumen in the Bay of Fundy and through pipelines. I was hoping that we could get some sort of a broad assessment of the impact of this from the Ecology Action Centre today, but you did nothing of that. You gave us nothing to digest or to discuss.

I think it is a missed opportunity for you, a really missed opportunity, because we are willing to listen to reasonable, well-backed arguments. You didn't go near this at all. In fact it wasn't even on your radar screen.

You talk about helping low income people. Do you know in Ontario they spent a fortune transitioning from coal- fired plants to gas? They didn't build their gas plants. They subsidized solar and wind power. Now the Auditor General of Ontario said that the consumer in Ontario has spent $38 billion more than they had to for their power and people are going into energy poverty.

What people are doing, people in low income, is that they are going off the grid and burning coal instead of using electricity to heat their homes. How is that a good idea? Why does that work? Is that what you want to see happen? This is going on. Low income people are being pushed into energy poverty. It is happening all over Europe. Germany, the forerunner of clean energy, is now reopening its coal-fired plants because the wind power and the solar power can't meet with demand during the peak hours. There are huge issues. You just can't blind yourself to them.

Again, I don't mind your taking a hard political stance on something, but I really wish that you had used the great opportunity to come here to lay out the science-based arguments you have for us. You didn't take the opportunity to do that today. I find that very disappointing as a committee member and as a Nova Scotian, quite frankly. We have a lot of oil going through our water. I wanted to hear the Ecology Action Centre's opinion on it and you gave us nothing to work with.

Do you disagree or agree with that? I mean you didn't give us anything to work with. You finally touched upon the Bay of Fundy and the bitumen going in the Bay of Fundy after our prodding you and prodding you.

Mr. Thomas: I don't remember being asked a question about the Bay of Fundy until right now. I am happy to speak about it.

The Deputy Chair: Well, please.

Senator Mercer: You talked about the pipeline coming to Saint John, New Brunswick, and then being exported.

Mr. Thomas: Yes.

Senator Mercer: Currently the only item on the public's agenda, not on the committee's agenda, is the export of the bitumen through the Bay of Fundy. If we have to follow every gallon of bitumen from Fort McMurray to the shoreline of the Bay of Fundy for you then we will have to do that, but it is logical that is what was going to happen.

The Deputy Chair: We are trying to be transparent here. We are trying to invite people to the table. If we were afraid to speak to the Ecology Action Centre we wouldn't have invited you here today. In fact I was one of the people that made sure you were invited, but you squander your opportunity to make a meaningful contribution.

We listen to people say we want to use all kinds of nebulous arguments because basically we want to leave the oil in the ground. We hear that all the time, using things like social licence or different arguments. The oil is coming in anyway. If it doesn't go by pipeline, it is going to come by ship, it is going to come by rail or it is going to come by truck. Right now there is nothing to stop people from moving this oil with those three methods into this country across the provinces. That is the fact.

Mr. Thomas: Again, if there were a project on the table with Canadian resources to Canadian refineries for Canadian consumption I would be willing to discuss that. I don't think that the Energy East pipeline is that project. I think primarily it is an export pipeline and that is one of the biggest things of my concern. The size of the project and its 1.1 million barrels per day capacity I feel facilitate the expansion of our oil and gas resources past safe levels.

I am happy to provide the IPCC AR5 report outlining a sort of carbon budget, so to speak. The levels of carbon dioxide that we can continue to put into the atmosphere before we as a global community blow past—

The Deputy Chair: That is not for the transport committee.

Mr. Thomas: I think you should consider it. I think you should consider the other processes that are taking place.

The Deputy Chair: No. We have the energy committee to consider those things. The transport committee does not consider those things. That is not our mandate. It is like my asking you about considering the price of eggs in this country. It is not the mandate of the Ecology Action Centre. It is not your mandate and it is not ours.

You were invited here today to speak to the issues directly of transportation of this crude through pipelines and through water. That is what we were hoping to hear some informed opinion on.

Mr. Thomas: Right. I do consider my opinion informed and I do consider my opinion informed by science.

The Deputy Chair: We have to know it. You have to give us information, right?

Mr. Thomas: Great.

The Deputy Chair: Instead of giving us a political statement we need an environmental and ecological information assessment.

Mr. Thomas: Perhaps one of the frustrations here in the room is that I consider this conversation, the frame of this conversation, very limited in the frame of we are going to expand oil and gas resources; we are going to expand the Alberta oil sands; and in the frame and conversation that we as the Senate of Canada are going to facilitate.

The Deputy Chair: Again we are not saying any of that. You are putting words into our mouths. We are not saying that. We are not saying we are going to expand anything.

We are talking about petroleum coming east to our refineries. All this petroleum is coming into the country anyway through ship bottoms and through rail. It is not going to stop the usage. Stopping the oil sands from moving petroleum is not going to stop the movement of petroleum in the country or the importation of petroleum. It is still going to come in. Apparently it is okay to burn Saudi Arabia's oil but not good enough to burn our own. That is the position you put the country in.

Mr. Thomas: Senator MacDonald, I count that as the eighth time here today that I have had words put in my mouth and I don't appreciate that. Perhaps I should apologize for starting on the wrong foot. I don't know what to say.

I agree with you that the conversation really isn't constructive at this point. I would like to continue it but I don't appreciate your saying that I support the import of oil from anywhere.

The Deputy Chair: You have to begin in good faith. When you come to the table you have to come to the table in good faith. We were accepting you here in good faith. I was really keen to hear what you had to say about the management of the bitumen going through pipelines, through communities and in the water. We were very interested in hearing what the Ecology Action Centre had to say. That is all.

Senator Mercer: I would like to put a straightforward question to you. We are importing oil from Saudi Arabia and from some countries in Africa. I don't think we import much from Venezuela any more, but we do from Nigeria and other places around the world. We are doing that now.

Part of the job of the Energy East pipeline is to replace those imports. Let's just talk about that for a moment. Is that a good thing?

Mr. Thomas: I think it is dangerous to talk about the Energy East pipeline as a pipeline that is for Canadians and for Canadian resources. I think that most of the bitumen in that pipeline is for export. Again I think that if there were a project on the table that were about using Canadian resources here I would be in a position to talk about it. I would be in a position to in some worlds support it depending on what is happening.

Senator Mercer: We agree that we are importing gas and oil from other countries.

Mr. Thomas: That's right, certainly.

Senator Mercer: Certainly.

Mr. Thomas: And I agree that—

Senator Mercer: Is it a good idea that we stop doing that and replace it with a Canadian product?

Mr. Thomas: I think you won't be surprised that I have some conditions to my response, but I think that the use of Canadian oil in Canadian refineries can be a good thing. I think that it can be a good thing if it doesn't facilitate the further expansion and further dependence on those resources.

I think what I have tried to make clear is that I think we need to be headed toward a managed decline of the use of those resources. I appreciate and accept the reality that we use these resources now and depend on these resources now. We have a huge part of our economy that does and a huge number of Canadians who are employed in it.

In the interim until we get to that decarbonized economy using Canadian resources is a good idea. Using Canadian resources depending on the project is something that we would be in the position to talk about.

I think that I don't see a project being proposed here yet that does quite that without setting off those other red flags in my analysis in terms of that further expansion and dependence on the resource.

Senator Mercer: You are a young man. I will not see this day but you may live to see the day when we move away from a carbon based economy. You will also see the day of massive unemployment in Alberta and massive unemployment in Saskatchewan where you as a taxpayer in Nova Scotia will be called upon to pay taxes so that there will be equalization payments going from Nova Scotia to Alberta for support.

We all want to diversify. We all want to make sure that Canadians are prosperous, but we can't do it in isolation of what is going on in the world. Yes, we want to get to the next level. At the same time we have great resources in this country that the world wants to buy. Yes, some of them are not the most known. We produce uranium too. We all know what uranium can be used for but we still mine it.

Our frustration is that we are not against where you want to go. I think we are just confused as to how you want to get us there so quickly and what happens in the interim. How does the government respond to the massive unemployment and the massive poverty that will result from getting to the point the Ecology Action Centre would like to get to as quickly as the Ecology Action Centre wants to get there?

If we do, we are in big trouble. If we go that way, we are in big, big trouble.

The Deputy Chair: Mr. Thomas, I want to thank you for your time today. We appreciate your taking the time to come and meet us and talk to us.

Honourable senators, I wish now to welcome the Honourable Michael Samson, a friend of mine and Minister of Energy, as our next witness. I have to confess I have never voted for Michel but then he is not in my riding. We will have to see how his campaign is. He is accompanied by Kim Himmelman, Director of Regulatory and Strategic Policy. Mr. Minister, please make your opening statement and then the senators will have some questions for you.

Hon. Michel P. Samson, Minister of Energy, Nova Scotia Department of Energy: Thank you very much, Senator MacDonald. With the last riding redistribution I am getting closer to your hometown all the time. Now I am making my way down to East Bay and all the way down to Huntington on the Grand Mira Road.

Members of the committee, thank you sincerely for the opportunity to meet with you to discuss an issue of national and local importance. I am very pleased to have Kim Himmelman, Director of Regulatory and Strategic Policy from the Department of Energy; Michelle Perry, Director of Communications; and Adam Langer, Executive Assistant, are joining us here as well.


I know that you are studying the transport of crude oil by pipelines, including how to share risks and profits in an equitable way.


I believe I can best speak to the transportation of crude to Eastern Canadian points and refineries. However I hope you will find my comments useful in the national context.

Crude oil plays a significant role in our everyday lives. It is used in the production of the electricity that lights our homes. It helps make the products we rely on. It allows us to travel and trade goods freely. It keeps our homes warm in the cold Canadian winters. Crude oil is ubiquitous in the lives of most Canadian families.

My province is leading Canada in making the switch to more renewable energy sources. Nova Scotia is the national leader in greenhouse gas reductions. Already we have reduced our total emissions by almost 30 per cent from 2005 levels


We are currently national leaders in matters of efficiency, renewable energy and reducing greenhouse gases emissions.


We are committed to continuing to do our part to ensure renewable that energy sources have an increasingly central role in our energy mix. We also live in a world where the overall demand for energy continues to grow. Today, oil is the world's leading fuel, accounting for about 33 per cent of consumption. By 2040 demand is expected to rise by around 32 per cent. As a result the need for crude oil as well as renewable energy will continue to climb.

Canada is one of a few countries with the resource capacity to help meet that demand. In addition to contributing to an improved outlook for our region wealth created from the responsible use of our nation's natural resources could help us make important investments in the infrastructure we and other provinces need to continue our transformation to a low carbon future.

Today my province can only meet its domestic oil needs in one way. Nova Scotia does not have pipeline infrastructure. All our crude comes via the ocean and tanker ships. As such we are subject to world oil prices. After 95 years in operation in 2014 the Imperial Oil refinery in Dartmouth stopped processing.


For over 10 years, Nova Scotia has counted on a regional refinery, in Saint John, New Brunswick, which does present challenges regarding safety and supply.


The closure meant inventories for our province were much lower. On the Labour Day weekend in 2015 local crude supply ran so low that Nova Scotia gas stations and residents ran out for several days.

After an absence of more than 10 years Irving is reactivating its marine terminal and fuel storage facility. New pipelines are being installed so petroleum brought in by ship can flow to tanks until it is needed. The official opening took place yesterday in Woodside. This is expected to improve the supply chain for petroleum products in Nova Scotia although it is unclear if it will eliminate all future disruptions.

NuStar Terminals in Point Tupper, my home riding, provides petroleum storage and can load and offload tankers. NuStar has an excellent safety record for bringing in oil and taking it out without any significant incidents. In fact from my home in Arichat, Isle Madame, I can see tankers pretty much on a daily basis just outside the harbour.

Nova Scotia has been clear about our position on pipelines. We have vocally supported Energy East despite the fact that it would end in Saint John. We see it as nation building and good for the economic health of our region and country. We believe in the importance of regional co-operation particularly in the energy sector.

The Maritime Link will be the largest addition to Canada's national grid in a decade. It will connect Nova Scotia to energy from Muskrat Falls, Newfoundland and Labrador, give us access to more renewables, help us further cut greenhouse gas emissions and stabilize electricity costs. The project will create a new transmission loop through Atlantic Canada and New England and with it new import and export opportunities. It is an excellent example of how regional co-operation in this sector can produce benefits for all.

We would also welcome pipelines to Nova Scotia.


We would be happy to see investments to extend that infrastructure to the Strait of Canso, in Nova Scotia.


We believe crude can be safely transported and that stringent regulations are in place to ensure Canadians and their environment are well protected. Nustar's record is an example of this. The world market needs the resources Canada has and Nova Scotia's access to tidewater is a phenomenal opportunity to facilitate export. We consider our ocean access a natural and comparative economic advantage. We also recognize our domestic market is relatively small. Increased exports must be a considerable part of building a more vibrant future for all Nova Scotians.


In this regard, we have some important advantages. Nova Scotia has ice-free ports that are the furthest north on the North American east coast, and we are able to load Canadian crude on large oil tankers there for export. Our proximity to the markets of northwest Europe, eastern South America and western Asia is useful from a strategic standpoint.


Up to this point my comments have focused on moving oil west to east. I would also like to bring to the committee's attention the strategic opportunity to move not only western Canadian sedimentary basin oil but natural gas as well to Eastern Canada in amounts far greater than what we currently receive today.

Nova Scotia has three proposed liquefied natural gas export projects. All are making very good progress in the regulatory approvals. If only one goes ahead it would require 800 million cubic feet of natural gas each and every day. This could be sourced from Western Canada. This new liquefied natural gas is needed and could provide cleaner energy sources for Atlantic Canada and the rest of the world.

In addition to bringing much needed employment opportunities to our region it would also help the Alberta oil and gas industry recover. Access to pipeline oil and gas would bring significant economic development opportunities from pipeline construction and maintenance to the operation of export terminals, to the servicing of vessels.

The new jobs and wealth generated from developing Nova Scotia's export capacity could be transformative. It could also help Canadian producers fetch a better price for their product. The increased energy security would help ensure shortages like those in 2015 remain isolated incidents.

In exploring this issue I strongly encourage the committee to consider not only oil but natural gas as well. It is an economic driver and it provides reliable backup energy for renewable sources.

The support of Canadians to safely transport our resources is very important. Good regulatory processes informed by science that balance the values of our society, including respect for our environment, a desire for meaningful work and economic vibrancy, are critical.

The public cannot be expected to support projects when they have not been told what they entail or how our responsibilities to the environment and each other will be addressed. They need information on the context in which they are being asked to form opinions. The benefits they bring to workers, communities and our country should be readily shared. Canadians want development to be done in a way that respects the rights of those affected and ensures that the environment, our lands and waters are protected. The strong regulatory processes and enforcement that ensure this takes place must be known. More awareness that Canada sets the global industry standard for best practices in regulation would be helpful and those that do not follow our standards need to be held to account.

A relationship among industry, government and the people must be built with each party not only saying but doing the right thing. The proof as they say is in the pudding. Words and actions must be aligned. While we may not always agree on the action we can trust that the laws of our land and our moral and social responsibilities are upheld.

Responsibility for this work is shared equally among governments at all levels, industry and related organizations. It is not an effort that has a clear beginning or end. The impacts of natural resource projects in our country have far- reaching effects. When one project fails in this regard it paints all with the same brush and breaks the trust.


Consistency is essential, and so it is important for this industry and other Canadian industries to adopt and apply the best practices to engage the population.


In terms of public confidence in the federal pipeline environmental assessment process increasing its accessibility would help. Accessibility is about more than transparency. It is about presenting the information in a way that allows quick and easy access to key points in a world filled with infinite information. Educational initiatives, comprehensive consultations and awareness of the benefits will help the public reach an informed decision.


In order to move this important file forward, we have to collaborate and show flexibility. All of the Canadians who are affected must also participate actively.


All governments in Canada have an interest in economic growth in a way that balances stewardship of our environment and the needs of the people we are privileged to serve. There is a need to bring the provinces together to discuss shared and regional concerns and to develop solutions that pave the way forward. There is also a need to define the ways in which all provinces would benefit. How that manifests may be different but equal.

The benefits to First Nations must in our eyes be a priority. A fresh look at mitigation of environmental concerns on land and at sea is mission critical. An opportunity to engage in a national discussion based on evidence would be created should we move toward something akin to a national strategy.


Thank you again for having given us this opportunity to meet with you.


I now welcome questions from senators on this matter of clear importance to us all.

Senator Mercer: First of all, minister, we appreciate your being here. Prior to the start of the meeting we mentioned that we did spend a few moments in your riding yesterday. As always it was a pleasure to be there as beautiful as it always is especially in the fall with the trees ablaze with colour.

Anyway, you mentioned some interaction that you had with TransCanada. I am interested in that. One of my criticisms on this committee and in this study has been of TransCanada's late arrival at the table in talking to Canadians to seek their approval and their interest in allowing the pipeline to go ahead. What was your reaction from your meetings with TransCanada?

Mr. Samson: Thank you for that question. Basically the Government of Nova Scotia in support of the NuStar terminal made the proposal to TransCanada, which I delivered personally, that any excess refining capacity in Saint John should be sent directly to the NuStar terminal for storage and shippage from that facility in light of its long history in this industry and its strong environment and safety record. We saw it as an opportunity for Nova Scotia to be participating in this project as well.

It was made clear at that point in time that the business case being put forward would see the pipeline end in Saint John. Any excess refining capacity would be dealt with by the construction of new tanks over in Saint John to be able to handle that prior to shipping out the excess.

Obviously our intent as a province was to put that proposal forward. At the end of the day we respect that there is a business decision to be made. When we left there the door wasn't closed but for the time being it was not part of the business case being put forward by TransCanada.

I also have had the opportunity to raise this concept with my colleague, the Alberta Minister of Energy to make sure she was aware of what Nova Scotia was proposing. We also want to make it clear, both via the premier and all of cabinet, that regardless of whether the decision was going to be made to have the pipeline extended to the Strait of Canso we still remained firm supporters of the project. We have made that very clear to the proponents, to Nova Scotians and to other Canadians that our province still supports the project.

Senator Mercer: I have two other questions. One is on the environmental aspect. You have talked about NuStar's environmental safety record. I want to talk to you about the environment in the Bay of Fundy.

We were in New Brunswick earlier this week for a couple of days. We have had some discussions with people there. We have had a look at the facilities there. We also are familiar with the geography of the Bay of Fundy and the world's highest tides, et cetera. I don't need to educate you on the risks: it being the summer home for right whales and their declining population and the admission that the change in management of the travel of the ships through the bay in the last few years has had a positive effect on the right whale population.

I would still consider it an environmentally sensitive area with the high tides, with the right whale and with a very healthy fishery that takes place on both the New Brunswick side and the Nova Scotia side of the bay.

I would like your opinion on the effect of a catastrophic spill of bitumen from a tanker on the environmentally sensitive aspect of the Bay of Fundy. Because of the force of the tides it is likely that a fair amount of it would be washed out of the bay, but it would then become an international problem for us because it would probably be washed into American water. Could you offer a comment on that? Where I am going with that is suggesting that the Strait of Canso is environmentally a much safer place to go than the Bay of Fundy.

Mr. Samson: Thank you for that question. We are certainly aware of the debate that has taken place. It places us in a difficult position in that while we have heard those concerns we deal with those concerns as well in our offshore. Whether it be the current exploration program taking place by Shell or some of the upcoming drilling programs that are going to take place by British Petroleum and Statoil, we face the same concerns which we do our best to mitigate. It is challenging for us as a province, in the spirit of regional co-operation to be actively pointing out these concerns to New Brunswick when we have similar concerns raised in different parts of Nova Scotia as well.

Again our approach has been to indicate that we would be fully supportive of seeing that pipeline extended to the Strait of Canso. We wish to put that forward as a business proposal rather than in any way trying to diminish what New Brunswick has put forward at the Saint John terminal.

Senator Mercer: We are playing the good guy again. I agree with you that it is a business decision. That is one of the driving forces behind it. It seems to me that we can also make a good business proposition to them in that we already have a gas pipeline that goes from the Sable field down through New Brunswick to our customers in the northern United States.

It would seem to me that pipeline already has approval. All the environmental T's have been crossed and I's have been dotted. It would make it a fairly attractive way for them to do it. I don't know the specific regulations in Nova Scotia. I rely on you for that. I assume that new studies would not be required if it were decided to twin the gas pipeline with an oil pipeline along the same route.

Mr. Samson: I can't give you a specific answer on that, but I know one of the topics we raised was whether it was even possible with the proposed Energy East pipeline. As you heard in my presentation we are not only interested in seeing the crude oil coming east. We are also interested in natural gas.

My understanding is that there are some concerns about putting a pipeline for both crude oil and gas in the same corridor. Again I am not an expert on this and would not want to give a definitive answer, but I know when we proposed that as a possible option and asked whether this was something that could be done, some significant concerns were raised as to whether it was even possible. I would have to go back and ask staff to review the very point you raised to be able to confirm whether that would be a possibility or not to have them running in the same corridor.

Senator Mercer: Because your discussion of natural gas terminals is more about natural gas coming from Western Canada as opposed to natural gas coming from the Sable field because the Sable field will run out shortly.

Mr. Samson: We realize that with every well there is an end date. Obviously with the production levels that are taking place now in our Sable project we are aware that the lifespan of those wells will come to an end at some point. That is why we look for other opportunities to be able to bring gas.

I have had opportunities to speak to my colleague in Alberta. The fact is that Nova Scotia wants Alberta gas. Alberta needs to move its gas. We see this as an opportunity to be able to address their need to move gas and our desire to be able to receive it not only for our own purposes but for export opportunities via LNG. This is why we have put forward a proposal to them. Those are discussions we will continue to pursue because for our LNG projects here to be successful we need a secure source of gas.

There are discussions among the proponents not only of Western Canada but as well with the Marcellus shale gas in the United States. There are various discussions taking place but we still see western gas as an opportunity to meet their needs of moving their product and to meet our needs of having a secure supply to make that LNG industry work in this province.

Senator Mercer: My final question is with respect to training. This morning we had a chance to talk to Regional Chief Morley Googoo about the involvement of Aboriginal people in the process and obviously the approvals that would need to come from many of them as things cross their land.

What is the aspect of training? I know you are not the minister of higher education but you are her colleague. It was very interesting. The chief was interested in the engagement of the community college to prepare, if indeed we were ever to get this done, a training process that would be aimed at young Aboriginal men and women to have them trained to be able to help construct anything that needed to be constructed and to manage.

I would encourage you to perhaps have a chance talk to Minister Regan and encourage her to put that on her radar. Even though it is not immediate it should be something that they should be considering because as Chief Googoo mentioned this morning it was something they were interested in.

I always use as a reference point when the Federal government announced the shipbuilding contract for Irving Shipbuilding in Halifax. We all know that within 24 to 48 hours Nova Scotia Community College was retooling some of their programs to fit the needs. The community college is able to do this but we need to be able to make sure that they have it on their radar.

Mr. Samson: I certainly appreciate that point. I am glad that Chief Googoo was here to speak to you this morning. I have known Chief Googoo for many years when he was chief in Waycobah over in Cape Breton and had the opportunity to work on numerous files.

There is no question that for us as government we have had a very successful and respectful negotiating mechanism with the 13 First Nation communities in our province through the KMK initiative which has worked well. At the same time we are very proud of the fact that not only is it at a matter of respecting the rights of our First Nation communities. It is getting them involved, allowing the training to take place and having them as active participants, which is of vital importance to us.

I had the opportunity in January to visit the Stena IceMAX, the ship that is drilling for Shell in our offshore. I was extremely pleased to see the company that has the catering contract aboard the vessel is part owned by a First Nations community. I actually had the opportunity to meet a lady from the Potlotek First Nation in my riding who was working that day. There were a few others that were from First Nations in Cape Breton. It was great to see that not only is there respect for rights but there is an economic benefit that is coming from that as well.

I will certainly pass those comments along. We remain very optimistic in the growth of our offshore, which will require significant training in that aspect. We see there is certainly a synergy that is developing. Obviously we want to make sure that people are trained and that they are ready to provide what the workforce requires. Certainly having our First Nations being part of that is essential.

One of the facts that people might not be aware of is that in Nova Scotia the fastest growing population is in our First Nation communities. That is an opportunity for us to be able to work closely with our First Nations communities to make sure that they are trained for the opportunities that exist in our province. Knowing the growth that is taking place, that is a tremendous opportunity for us and for their communities as to seize on.

Senator Greene: Thank you very much and thank you very much for that excellent opening speech. I hope the next presenter is as good as you. Too often in the past when faced with an opportunity the Atlantic region or the Maritimes in particular have lost that opportunity because they have not had a united position. Often they have fought against each other with the result that the opportunity never materialized.

I was very pleased to hear your position on potentially including the Strait of Canso. In any event you support the New Brunswick option in Saint John. I think that was excellent. I congratulate you and I congratulate the government for that.

I have a totally different question, though. It is a term that we have run across every now and again that is put forward by different groups. You are the first practical politician that has been here that I can ask this question of. Does the term social licence mean anything to you? If it does, what does it mean?

Mr. Samson: It certainly does. As governments you need to have the confidence that the regulatory framework in place is one that not only allows business and entrepreneurs to know what the rules of the game are but also allows the community as a whole to understand what the rules of the games are. You run into problems when confusion exists or if there are not proper regulation.

We have worked very hard as a province. Certainly we have a very dedicated civil service that does its best to address any of the issues. We have seen some mega projects take place in Nova Scotia and even some smaller projects. The regulatory framework is there. Regardless, when you refer to social licence you also have to realize that you will never get 100 per cent support.

We are seeing that in a number of projects that are taking place in our province now. At some point you need to look at whether the rules of the game were followed. Were the rules clear to everyone involved? Did everyone have a proper opportunity to be able to participate in the debate and discussions around it? Did everyone have their questions answered in a timely fashion by the appropriate individuals or organizations? Then government needs to make a decision.

Senator Greene: Right.

Mr. Samson: When we talk about social licence it is that combination of making sure the rules are in place, that people have had an opportunity to be engaged, and that you then need to make a final decision.

I have had the opportunity as minister to be involved in a couple of files where at the end of the day a decision had to be made. I was convinced that the proper steps were taken. There was proper opportunity for any questions to be answered. At the end of the day a decision needs to be made and I stand by the decisions I have made on those projects.

Some are being appealed through the courts; others are still being pursued. You will never get 100 per cent support, but the question is: Was the framework in place to allow that to happen and did the process follow the proper route? If the provincial government in this case and the municipalities have the sense that the rules are clearly in place and that the public has an opportunity to be engaged, at the end of the day a decision will have to be made one way or the other.

Senator Greene: Great, I like that answer too. Write that down, you guys. Thank you very much.


Senator Boisvenu: Good afternoon, Minister. I do indeed appreciate my stay in your magnificent province very much. I have two questions to ask. My first question, if I understood your presentation correctly, regards whether the province of Nova Scotia is satisfied with the route proposed by Energy East, which would end in New Brunswick without being extended to Nova Scotia. Is that correct?

Mr. Samson: The proposal Nova Scotia submitted to TransCanada and the Government of Alberta suggested that rather than stopping in Saint John — with additional capacity, daily — the line could be extended to the Port of Canso, where the NuStar terminal is already. We proposed that to them, since that business has been there for years and its record when it comes to protecting the environment and safety is well-known. But at the end of the day, we had to propose a business plan that was in their best interest, which was to extend the line to our area, to Cape Breton. As it was said at a certain point in their business plan that the line was to stop in Saint John, we indicated very clearly that even with that route, we would consider the project a national project. It would generate economic benefits for our province, even if the work was done in Saint John and other parts of the country.

By the same token, this project would ensure the security of our access to oil in Nova Scotia. That is why we made that proposition. They answered at a certain point that that route was not part of their business plan, and so we had two choices. As a province we could have decided under the circumstances that we would not support the project. It was to us more of a national issue, a regional issue, and that is why our province indicated that even if the line stopped in Saint John, we would consider all of the advantages of this project in any case and fully support it.

Senator Boisvenu: We also visited NuStar yesterday, I believe. I think the province has to be very proud of that enterprise, not only from the environmental perspective, but also from the social viewpoint and the engagement of the community. I think it is a model enterprise, and so I wanted to say that to you. It was a very good visit.

The other question I would like to ask you — and I don't want to put you in hot water, Minister — concerns the National Energy Board, which will soon be resuming its hearings. Four new members were appointed yesterday. I also know that you meet with your colleagues the ministers of Energy of the other provinces, once or twice a year. I expect that the pipeline is central to your discussions.

Mr. Samson: Yes.

Senator Boisvenu: The strongest resistance right now is coming from Quebec. We saw this yesterday in Gatineau where the municipal council voted down the route or the project in its current form. Do you think you could have a political role to play to further the social acceptance of this project in Quebec?

Mr. Samson: That is a very good question. I think the ministers' meetings are an opportunity for Nova Scotia and myself, as minister — and even for the premier of the province, when the premiers meet — to communicate the message, which I heard several times in Quebec, as to how Quebec can benefit from the pipeline going through its territory, since the line would no longer go through Montreal, as had been envisaged.

Why should they approve the project? I think that Nova Scotia is a good example. Of course, we would have wanted the line to be extended as far as Nova Scotia, but that is not the plan as this time. However, we see how the project is going to benefit the country, nevertheless. Alberta needs to move its oil, it needs new markets, and this will benefit Alberta and Nova Scotia, among other provinces.

Yesterday when I took part in the opening of the new quay, the Irving terminal, Mr. Irving spoke of a six-week construction period for the refinery. There were 27,000 people, 27,000 workers. I can assure you, senator, that many of these 27,000 workers came from Nova Scotia. There were many from our area, Cape Breton. I know workers from our province who have worked all their lives for Irving, in Saint John. And so we can see the economic benefits of that project, and that is the message we want to deliver to Quebec.

On another topic, when you ask us what role we can play to advance this issue, I spoke earlier of the Maritime Link project, which will allow the line to go from Newfoundland to Cape Breton, in the context of the Muskrat Falls project. We see an opportunity to have a system to transmit hydroelectricity to eastern Canada, to Quebec and to all of the Atlantic provinces, and not only to our provinces, but also as far as New England. These are discussions and a type of cooperation that have never happened before.

I proposed this at the last ministers' meeting, for Nova Scotia, and as we know, sometimes there have been policy differences between Newfoundland and Labrador and Quebec. But I think Nova Scotia has a role to play because it never took part in those discussions and the old wars that took place. So the time has come for us to work together. This project will be beneficial for us, and it will also benefit Quebec, Newfoundland and Labrador, New Brunswick and Prince Edward Island.

Moreover, in addition to the economic aspect, the protection of the environment has to be considered. Nova Scotia is too dependent on coal. We have coal plants, and coal is the most important source of electricity in Nova Scotia. And so it would be beneficial for us and the whole region to have access to hydroelectricity and renewable energy in our province. Consequently I would be very happy to meet my Quebec colleagues to convey the message to them that we have a decision to make in Nova Scotia: either we keep what benefits Nova Scotia, or we take part in a project that will be good for the region and for the country. It was for this reason that we made the decision to fully support this project.

Senator Boisvenu: Thank you, and congratulations on your French!

Mr. Samson: Thank you very much.


The Deputy Chair: Before going to the second round I would like to pose a few questions to you to get some clarification on a few things.

I state for the record that of course we support the Government of Nova Scotia and its efforts to reinforce our support for the pipeline project in principle. We know it is important for the country, for the production of wealth and for the generation of revenue so that we can meet our social needs. Like you we want to be able to maximize the potential benefits for our own province.

I am pleased to know that you made some representations to the Government of Alberta and to TransCanada directly on the availability of Point Tupper. The initial business plan that was put together called for two terminals: one in Cacouna, Quebec, not far from Quebec City on the St. Lawrence River, and one in Saint John. The same volumes they would be exporting or moving would still exist except the terminal in Quebec is no longer going to be built.

I am curious. When you spoke to the Minister of Energy, the Government of Alberta and TransCanada, was that before or after they announced that the export facility in Quebec was not going to be built?

Mr. Samson: Thank you for the question. I should correct something. I think in my last answer I mentioned about the pipeline stopping in Montreal. You are right. It was Quebec City, not Montreal. It would have been after that decision had been made which is why we felt that being there was going to be added capacity.

Based on what we had seen of the project we knew that the refinery in Saint John has a maximum it can handle per day but the capacity of the pipeline exceeds that. It was a question of what we do with the excess because a refinery can only handle so many barrels per day.

That was where we saw the opportunity, as did NuStar, to say rather than build expensive tanks to hold it until it could be shipped out or refined why wouldn't you extend it to Point Tupper?''

Our approach was from a business and economic benefit sense. At the end of the day TransCanada is a private company and obviously they need to make a decision in their best financial interest.

We were certainly aware of some of the concerns that Senator Mercer raised regarding increased shipping activities in the Bay of Fundy. It was an opportunity for us to promote the safety record and the history of the Strait of Canso and the NuStar facility. We wanted to present this in a sense that a business decision could be made. We were not going to take the approach of taking our ball and bat and going home if we did not get what we were proposing.

For us it was a decision on what is in the best interests of the region and what is in the best interests of the country. The message I left was that the offer was on the table: For today you are telling me that this is not part of your current business plan but the message from us is that the offer is still there. Our government would be supportive of it should they decide at some point that it is in our best interest to maybe send it over to the NuStar facility in the Strait of Canso. That offer is on the table and we will certainly be prepared to work with them should they make the decision that is how they want to proceed.

The Deputy Chair: I have another question. It goes back to something you referred to earlier in reference to Senator Mercer's questions. You pointed out, and rightly so, the managing of potential of international concerns with the loss of petroleum. We have those concerns with the Sable Island offshore. It is very accurate to say that but it is also accurate to say that when we introduce risks on Sable Island domestically it only affects our offshore. Any time something of this nature is introduced, let's say by our sister Province of New Brunswick in the Bay of Fundy, it automatically introduces risk to us. We have to deal with risks that they don't have to deal with in our independent decisions.

We heard from the head of the Atlantic Pilotage Authority today. We went over the tanker volumes in the various ports in Eastern Canada. Last year the Strait of Canso handled 330 tankers and Saint John handled almost four times that or over 1,100.

I know you will remember that years ago a lot more tankers were being handled in the Strait of Canso. Is there not some environmental argument in terms of managing risk that instead of doubling the number of tankers in the Bay of Fundy? There is a strong environmental argument for moving some of that tanker activity to Point Tupper and giving this province the opportunity to manage the risk overall.

Mr. Samson: My response to that is that we have gently raised that very issue but again at the end of the day we understand there needs to be a business decision made. The numbers need to work. We didn't think it was the right approach for us to be trying to promote Nova Scotia by knocking down New Brunswick or by creating a level of fear to the benefit of our province.

As we try to manage our offshore we are faced with the same questions. Part of the new parcels that have been bid on will have drilling activity. There are those that would argue that should there be a worst case scenario it may end up going into other jurisdictions as well. It is a difficult position for us to be promoting our offshore as being very safe, environmentally friendly, and then to be pointing to another province and saying we are concerned that they have an increased risk they have to address.

Any time the movement of petroleum products takes place on our coast it is something that is of concern to us. We want to ensure that safety mechanisms are in place and that we reduce risk. In this case there is no question that it has to be based on a business decision that makes sense.

This is why we have put our best foot forward. We continue to make it clear to the Government of Alberta and to TransCanada that this still is an option for them. Again I remain optimistic that we may see at the end of the day a decision made to have it come to the Strait of Canso, but that is a decision they will have to make.

The Deputy Chair: We are talking about the export of petroleum, but of course we import a lot of petroleum as well. I would like to point out to my colleagues that you cannot import petroleum to refineries in either New Brunswick or Quebec without coming through our water.

We see some of the resistance coming out of certain sections of Quebec. Has the Government of Nova Scotia made any representation to the Government of Quebec or the concerned parties in Quebec to let them know that at the moment we are managing risk on their behalf to provide petroleum to their refineries?

Mr. Samson: That is a very interesting point. Based on some of the points raised by Senator Boisvenu, I think that is an opportunity for us. I certainly hear the message you are giving today. We will certainly take that back to our premier and to our colleagues to see if there is a more active role that we can play as an Atlantic region, not only Nova Scotia but our other colleague provinces, to be able to make representations to Quebec on that very issue.

I was at the opening of the terminal yesterday and speaking to the captain of one of the tankers there. They are leaving Saint John, coming to Halifax, going to P.E.I., going to Newfoundland, and then making their way up to Quebec via the St. Lawrence year round. Via the St. Lawrence through ice is not always an easy thing to do considering the type of product they are shipping, but they have been able to do that. I certainly hear the proposal you are making and I think there is an opportunity.

As I mentioned we are certainly having those types of discussions on the whole electricity transmission loop on hydroelectricity and renewable energy. We have started the discussions now. We have raised it with the federal government that was very interested in hearing how we could make that happen. It could certainly see the benefits not only from an economic standpoint but from a reduction in greenhouse gases and more renewable energy for us.

There is an opportunity on this topic to possibly make representations to the Government of Alberta and to the affected municipalities to understand how we have been able to do this. There is risk involved. It is not always to the benefit of our province but we realize that sometimes the risk is to benefit other provinces. We do that. We accept that. We see it as part our duty to ensure fuel supply to other regions around us.

The Deputy Chair: I have one more question before we go to the second round. I made the point of making this clear to our colleagues in Western Canada when we held our hearings out there. People speaking to us about the Energy East pipeline were telling us that the pipeline went through six provinces and that there were all kinds of benefits to these six provinces. I pointed out to them that yes, it went through six provinces but once it goes in the water it goes through our water and we want that to be recognized.

At any time in the process did the province consider asking for intervenor status with the National Energy Board? I know we didn't. I am just curious if we considered it and if not, why not?

Mr. Samson: I think there were some discussions through the premier's office on that very question but I don't have the specific details as to why the final decision was made not to seek intervenor status. I am unable to give you a specific response on that.

Senator Mercer: I have just one question. Thank you for being here and your excellent presentation. I want to go back to the environmental aspect. I see us being boy scouts again. We are the good guys. We like our neighbours. We don't want to disrupt their getting this opportunity but we have to take care of ourselves too.

I want to go back and draw your attention to the Bay of Fundy. We have to be concerned that incidents in New Brunswick, either at the terminal loading or with ships coming in or out of the Bay of Fundy, affect us just as much and maybe even more because of the size of our shoreline and the size of our fishery in the Bay of Fundy. It seems to me we should be a little more aggressive in talking about it.

I agree that if we are not going to get what we want, a pipeline to Point Tupper, good on New Brunswick for getting it. However we should be a little more aggressive looking from the environmental side. If something bad happens, and hopefully nothing will happen, it will have a huge effect on our shores in the Bay of Fundy. I can't measure them but in my recollection of a map of the Bay of Fundy we probably have more shoreline affected by the bay than they have.

I would urge you and urge the government to consider being a touch more aggressive with the federal regulators in trying to get the pipeline to come to Point Tupper.

Mr. Samson: Thank you, senator, for that question. We have great confidence in the ability to be able to ship crude by tankers. In fact all of the products that arrive in Nova Scotia for our domestic use come via tankers. If we have success in our offshore due to the distance they are from land, more than likely any oil or natural gas found will be shipped via tankers.

We believe in the safety record that exists in the industry. We believe in the safety of the vessels themselves. This is something we have had in our shores, whether it be in the Strait of Canso or elsewhere in the terminals in Halifax where all those products have been delivered. We have had a great safety record. In the future we will continue to have tankers coming to our shores for our own domestic needs. We are quite confident of the technology and the safety record out there.

Certainly I will pass that on to my colleagues so that those concerns can be raised in discussions with the Government of New Brunswick and we can have them addressed to our satisfaction.


Senator Boisvenu: Once again, thank you very much, Minister. I appreciated your presentation very much.

Without wanting to get into your communication strategy with your Quebec counterpart, I think that the point Senator MacDonald has just made — the fact that Quebec withdrew support for a future terminal for environmental reasons — is a good argument, but I would add another argument, Minister, with your permission, and that is the fact that this route will have an effect on a number of trains that circulate in Quebec and are full of oil. Considering the events in Lac-Mégantic, which you undoubtedly followed in the media, the population is still traumatized about that disaster. The pipeline could represent a type of security to reduce that trauma. I think that is an additional argument you might use in your talks with your Quebec counterpart. That is a suggestion I am making to you, Minister, but I think it is an important element in the current debate.

Mr. Samson: Thank you very much, Senator. All of us here were indeed well aware of the tragedy that took place, and that is one reason we have had pipelines for many years to transport our natural gas. It is one way of transporting oil and natural gas which we trust.

I had the opportunity of going to the United States, to Pennsylvania, to study their natural gas industry. If you look at the map of their lines, it is incredible; they are everywhere! It is almost difficult to find land where there are no underground gas lines. That is their reality, and this has existed and been entirely safe for years.

We are convinced that this is the best way to transport oil from Alberta and the western provinces to our coast. That is why we are also at the same time trying to obtain a natural gas line. We think it is still the best means of transport, and that it also generates economic advantages for our province. In short, I take into account the points you raised, and these are issues we will broach with our Quebec colleagues.

Senator Boisvenu: Good luck!

Mr. Samson: Thank you.


The Deputy Chair: I would like to thank both you and Ms. Himmelman for taking the time to come and visit us. We had a great conversation with you. We have learned a lot.

I would like to introduce our final witness for this afternoon, the Honourable Jamie Baillie, Member of the Legislative Assembly (Cumberland South) and Leader of the Opposition, Legislative Assembly of Nova Scotia.

We ask you to begin your presentation, Mr. Baillie, and afterward the senators will have questions.

Hon. Jamie Baillie, Member of Legislative Assembly (Cumberland South), Leader of the Opposition of the Legislative Assembly of Nova Scotia: I welcome everyone here, senators on the committee and people who are travelling with your committee across the country, to the wonderful city of Halifax.

I believe I am the last presenter today. I may be standing between you and a glass of wine or a beer. I encourage you to try many of our fine downtown establishments if you have a chance before you rush back to the airport.


For four years, my family and I went to Sainte-Anne University to take part in a family activity in French, the family French camp. It was a good idea for my young daughters, but especially for me.


Having said that, that is about the extent of my ability in Canada's other official language so bear with me if we end up with questions in both languages. I will do my best.

First, I think I am showing you something relatively unique. I believe that our Minister of Energy a few moments ago came to your committee to express the support of the Government of Nova Scotia for the Energy East pipeline. I am here to do the same. As Leader of the Official Opposition, Progressive Conservatives, we are strongly in support of the construction of the Energy East pipelines for reasons that I will outline briefly to you.

I hope by being here we are sending a pretty strong message to you and your committee and to our fellow Canadians about the importance of that pipeline not only to our entire country but also in particular to the part of the country we are responsible for here in Atlantic Canada.

Canada has already constructed and is using over 800,000 kilometres of pipelines. If those pipes did not exist it would require 4,200 rail cars and 15,000 tanker trucks to move roughly three million barrels of oil a day around our country. This is a nation that has great experience with pipelines, that has a great safety record with pipelines, and that has great private companies with the knowhow to design, to build and to operate safely pipelines. In fact our pipelines are more cost effective, more energy efficient and more reliable than any other above-ground alternative for the transport of crude oil.

In 2014, 611,000 barrels of oil were transported by rail, which are both a more expensive and a less efficient way of moving oil around the country. In 2015 our pipeline industry in Canada invested $1.3 billion in pipeline safety. We have great confidence in the ability of the private pipeline companies of Canada to develop, build and maintain a safe pipeline network from west to east.

Here in Atlantic Canada we have only a few refineries, as I am sure you know. Those refineries are unconnected to the pipeline network. As a result almost all of the crude oil that enters Atlantic Canada arrives by tanker ship from the Atlantic.

Atlantic Canada imports our oil from the United States, from Algeria, from Saudi Arabia, from Nigeria, from Angola and from Iraq, but we do not have a direct connection by pipeline to the oil sands or to the producing parts of our country in Alberta or out west.

As some of you know, if not all of you, Atlantic Canadians have played a key role in developing the oil resources of Western Canada for generations. At its peak there were an estimated 30,000 Atlantic Canadians working out west in oil exploration and development. Many of them are now home because of the downturn but we know these are cyclical events. Atlantic Canadians are very proud of the role they have played in enriching our country through the development of western resources.

We have before us with this Energy East pipeline an opportunity for us to further participate in the development of our resources to our mutual benefit including by taking new jobs that would be created in our home part of Canada.

To me the ongoing Energy East pipeline debate across our country is very directly tied to the way that wealth is created, distributed and redistributed across Canada. In this part of Canada all four Atlantic provinces are known as have-not provinces, a term by the way that I hate, that I despise. If I am ever elected premier of Nova Scotia, which I intend to be I will personally pass a bill to ban the word have-not from The Webster's Dictionary.

Nova Scotia alone is on the receiving end of a little over $1 billion in equalization transfer payments every year. I want you to know that we don't want it. We want off it. We want to build our own wealth in our own part of the country here. Our request of the rest of Canada and to the national government through the Senate and through your committee is not that you continue to enhance, enrich or enshrine equalization as it is already in our Constitution. Rather it is that you give us the tools to get up on our own two feet, to earn our own way, to develop our own resources and to participate in the development of our natural resources by working here at home. That is what the Energy East pipeline means to me. It is what it means to the Progressive Conservative Party in official opposition here in Nova Scotia and it is what is in the hearts of many, many, many Atlantic Canadians.

I am here today to speak strongly in favour of Energy East first as an Atlantic Canadian, including the terminus in Saint John where we have a wonderful opportunity to then refine the bitumen that arrives there and then pipe it as finished product to the United States. That is great for Saint John, for New Brunswick and for Atlantic Canada, and I support it.

I also want to add that there is a unique economically right and environmentally sound opportunity to extend the pipeline beyond Saint John, to bring it into Nova Scotia and to terminate it at Point Tupper, a natural harbour with natural storage and the ability to then be transported to tanker ship and safely exported overseas.

I will finish with that because as a member of the legislature my constituency of Cumberland South is on the Bay of Fundy. It has a unique ecosystem in the world. It is a wonderful and pristine place with vibrant fisheries including a lobster fishery and a scallop fishery. It has some of the best natural wonders of the world and a huge tidal power potential.

The environmental argument I want to make is that it is far better to have the unrefined bitumen that arrives at the Irving facility in Saint John piped past Saint John to Point Tupper, Nova Scotia, where it can then be safely put on appropriate oceangoing tankers and sent overseas. In that way we get both the benefit of refined product going to the United States by pipe from New Brunswick and unrefined product being exported to Europe. I say that because I believe it is the most environmentally sound way to proceed with the European-bound product. I am sure as you do your research you will see the economics of doing so are strong as well.

To me, and this is not meant to be a pun, it is no pipe dream to terminate at Saint John and then build a lateral to Point Tupper. It is actually economically and environmentally the best way to proceed. With those few remarks thank you very much for your time today. I am happy to answer questions as long as you wish.

The Deputy Chair: Mr. Baillie, thank you very much for your presentation. It is very much appreciated. We will start with Senator Boisvenu.


Senator Boisvenu: Welcome, Mr. Baillie. You have a name that is quite famous in Quebec. Jean-Maurice Bailly was a sportscaster on Hockey Night in Canada. He died several years ago, but he was a star in Quebec. So if you come to Quebec, you will surely be asked whether you are related to Jean-Maurice Bailly.

I have a specific question for you. We know that the National Energy Board will soon resume its consultations. We know what has been going on recently. Four new members were appointed yesterday. The question I would put to you is this one: are you going to go before the National Energy Board again to submit your point of view, which you shared today, and which is that you would like the pipeline to be extended to Canso? What would your argument be to change the position of Energy East, which already replied to the Government of Nova Scotia that it did not intend to extend the pipeline to the Strait of Canso? It is a two-part question. Are you going to return to the National Energy Board, and what arguments would you present to Energy East to try to sway it in favour of your recommendation to prolong the pipeline?


Mr. Baillie: Thank you very much for your question. I appreciate it. The short answer is yes. I would be delighted to speak to the NEB and any other body that has a role to play in approval or non-approval of the pipeline project.

I will absolutely stress that I am in favour of the current proposal which terminates in Saint John. I still believe it is a good project on that basis alone. As an Atlantic Canadian I believe it is good for our region of the country if that is the entire project. I also believe as many people do that it is a very good project for our entire country.

I am in favour of, on its face, linking our country by pipeline from west to east to allow for the freeing up of the economic value of the oil resource in Western Canada by bringing it for refining to Atlantic Canada and its most efficient export methods.

I believe there is a strong economic environment case for also adding a lateral to Point Tupper and I will make that point to the NEB. I assure you that this is not an either/or proposition as far as I am concerned. My main objective is to be supportive of the Energy East pipeline proposal as it currently exists. If extension is not granted I am still a supporter of the project as it is envisioned. Those of us who want to see a vibrant industry built here and exports overseas originating from the safest environmental ports on the Atlantic coast can also make the case for Point Tupper.


Senator Boisvenu: Mr. Chair, I apologize. I need to leave in a few minutes. Rest assured, Mr. Baillie, that I'll accept your invitation to spend the weekend in Halifax, since I'll be coming back to the city soon.


The Deputy Chair: Thank you, Senator Boisvenu.

Senator Mercer: Mr. Baillie, thank you for being here. It is interesting that a fair amount of your presentation was very much like the minister's presentation. Again we Nova Scotians as good neighbours are supporting what is supposed to go to Saint John.

I want to go back to your constituency of Cumberland South. It is bordering on the Bay of Fundy. I know my brother happens to be a constituent of yours and lives in Apple River. I am familiar with the bay as it comes up that far into your riding.

The Atlantic Pilotage Authority told us today that in 2015 there were 1,116 piloted ships into the Port of Saint John. We are talking about increasing it significantly when this terminal is complete and we start exporting a product out of there. Then I went over to the Strait of Canso to look at the numbers he told us for there and there are 320 piloted ships in there. The pilotage is not just tankers. There are all kinds of other vessels that get pilotage into both ports.

The environmentally sensitive Bay of Fundy is the summer home of the right whale and many other eco sensitive things. We should all be concerned about the ecological balance of the Bay of Fundy. While I too support the pipeline coming east I am very concerned that we are to have the terminus in Saint John, New Brunswick. If we were to put it in the Strait of Canso we could use the NuStar terminal that is there already. We toured the NuStar Terminal yesterday and saw where expansion could very easily take place. We saw their loading and unloading facilities and their ability to do it very quickly and very safely. They have a great safety record.

I hope we would go back to that table. I would encourage, as Senator Boisvenu did, going back to the National Energy Board and saying that the pipeline should go to Saint John, New Brunswick. They need to feed that product from out west to the Irving refinery. We need to get product to tidewater in a safer manner, and the safest place would be Point Tupper.

The sales pitch to get that change would be the environmental one. Are you prepared to talk about the environmental aspect of that?

Mr. Baillie: Sure. Senator Mercer, you made some great points. I am delighted to hear that you have a brother that lives in my constituency. It is a little Nova Scotia moment. I had asked you about your sister Colleen earlier and now you are telling me you have a brother who is a constituent. Next time I am in Apple River I will look him up.

For those of you who are unfamiliar with the Bay of Fundy it really could officially be one of the Seven Wonders of the World. The tidal power potential is something we are just beginning to explore. The highest tides in the world are in the Bay of Fundy. It has the electrical potential to power to 30,000 homes. It is renewable and it is forever. It is also predictable unlike the wind because we know the tide comes in and out every six hours. Modern technology will allow us to harvest that and build a great electric grid across Atlantic Canada in combination with our sister provinces.

You are correct that there are 1,000 or more piloted ships of all kinds coming in and out of Saint John on the New Brunswick side. Because of the bottom formation of the Bay of Fundy and because of the tides those ships actually go up and down the Nova Scotia side of the Bay of Fundy before they enter or exit the Port of Saint John. They are not doing that to be unneighbourly. They are doing that because the geology of the area forces them to do that.

Many of my constituents like your brother and others make their livelihoods on the Bay of Fundy. Many of them have summer homes or family homes going back generations on the Bay of Fundy. They are supporters of jobs and supporters of pipelines like this one. They have a legitimate concern about the environmental risk of running supertankers, no matter how safe they are or no matter how many hulls they have to hold bitumen, up and down such a sensitive environmental area.

They are right about that and we have a solution. We have another terminus point that would be a safer one. This is partly good risk management or risk mitigation. The effect of an incident on the Bay of Fundy would be devastating. To move bitumen safely by pipeline to Point Tupper and then to ship it both reduces the risk of an incident ever occurring and makes for a much easier cleanup in the unlikely event that we had an incident to deal with.

I believe the NEB will consider risk factors and risk mitigation to our environment in other ways. The Point Tupper terminus will look very good when they factor that into their deliberations. Thank you for raising that.

Senator Mercer: My final point, Mr. Baillie, is that you are right, but one of the things we don't talk about enough is the fact that if there is an incident in the Bay of Fundy it is not just an incident in the Bay of Fundy. With those extremely high pressure tides, guess what it does? It is going to wash that out and it is going to become an environmental incident in the state of Maine, in Rhode Island in the state of Massachusetts, and in New York. We don't want to have an accident anywhere, whether it be in the Bay of Fundy or in the Strait of Canso, but if it happens in the Bay of Fundy it becomes an international incident as opposed to something that we contain and manage ourselves.

Mr. Baillie: You have described that very well, Senator Mercer. I didn't want to dwell too much on what an incident might look like. You are entirely correct. It would be an incident that would affect the Eastern seaboard. We do not need to take that risk because we have alternative terminus points for the export of bitumen overseas. Thank you for raising that so clearly.

Senator Greene: Thank you very much for your presentation. I appreciate it as a Nova Scotian, as a Maritimer, as an Atlantic Canadian and as a Canadian. You hit all the bases for me. I have one question and it is on a different track.

There is a term that various delegations use in their presentations to us and that term is social licence. From your point of view what does that means or does it have any meaning at all?

Mr. Baillie: That is a great question. Let me counter it with another term that we are looking for from our national government and that is leadership. We are looking for leadership. You are showing leadership as a Senate committee by coming to our part of Canada already favourable to the Energy East pipeline and looking to hear from people on their views. I appreciate that.

This is in no way meant to be a partisan comment, but I worry that social licence in the political world means we will do something if it is clear every possible person agrees with it and nobody disagrees with it, and that is the absence or the opposite of leadership.

I hear you on social licence. I am not saying that there is no value to the term social licence. There is, but when it replaces leadership we have a political problem. I want to be clear about the consequences of that political problem while I have you. When there is no leadership on great national initiatives like this one what it means for Atlantic Canada is that we cannot get ahead, we cannot earn our own way, we cannot stand on our own two feet, and we are forever indentured to the rest of Canada for our transfer payments.

I reject all that. I need leadership from our national government on this project and others like it to give me and my fellow Nova Scotians the tools to build our own way, to stand on our own two feet, and to contribute to Canada on an equal basis with every other region. I know we have it within us to do it.

I am asking you as the Senate committee to take the message back to Ottawa that we see Energy East and some other ideas that we have as our way of actually dealing with the debate over equalization in a positive way, which is to get on our own two feet instead of to argue over how much more or less those transfers should be. I would love to take that last equalization cheque that comes here, rip it up and then say thanks, we will take it from here. Because it has been a generous part of our country I don't want to run the program down. We need energies to do that. We need leadership to do that. If our national government stands behind the cloak of social licence to do nothing that is the effect it has on Atlantic Canada in my opinion.

I want to quickly say that the discussion that Senator Mercer and I just had about the environmental impact and the best ways to mitigate it are acceptable in dealing with social concerns and generating social licence for an economic project to proceed. I think that is a fair point in that area.

Senator Greene: Great, I am fine with that. Thanks.

The Deputy Chair: Mr. Baillie, I have a couple of comments and questions I want to run by you. You mentioned the need for leadership on these issues. I think we all agree that responsible levels of government have to take their jurisdictional authority and apply it and do what is required of them.

I was googling names and googling for information on the project, and whose name popped up? It was Colleen Campbell from West Nova. Colleen was a Liberal MP for many years. Those of us who have been around politics remember when she and Charlie Haliburton traded their seat back and forth for it seemed like decades because it was the biggest swing seat in the province. Colleen is an older lady now but she is still pretty sharp and she was quoted in the local newspaper down there.

She was flabbergasted really that there was an effort or initiative to export large amounts of heavy petroleum out of the Bay of Fundy and that no public hearings were held in the province or down in that area about it. She made a very legitimate point when she said, "When I was the MP here at the time when I was involved in politics there is no way that this would have occurred without involvement and discussion about this with the communities that border on the Bay of Fundy.''

I don't want to be too partisan about this, but as a Nova Scotian we have to look after our own backyard here. I say to people, "If we are not prepared to stand up for ourselves, don't expect other people to stand up for us.''

Has the provincial government done enough in terms of having this matter discussed with the people around the Bay of Fundy? Do you think they have? Should they be doing more? Is there something you think we should be doing that we haven't done in terms of engaging the public on this issue?

Mr. Baillie: Thank you, Senator MacDonald, for those questions. I am here in agreement with the Government of Nova Scotia on the importance of the project proceeding. I want to stress that.

To answer your question directly, our provincial government, which is of the political stripe as the national government at the moment, has not been a strong enough advocate of the project overall. Notwithstanding the presentation that was made to you today, and I was delighted to see it, there has not been a strong statement of support by our provincial government or by our premier in the public domain. I wish to see that. I will stand beside him if he chooses to say that. I hope he does.

It is important that consultations take place in affected areas, whether they are affected positively like Point Tupper, for example, or potentially would be at some environmental risk like the communities that border the Bay of Fundy. Of course there should be consultation and that consultation in my opinion should be focused on risk management, on risk mitigation, on how best to proceed and not on whether to proceed or not. I guess that is the difference between appropriate social licence and social licence as a shield.

If a consultation means that our government leaders show up in your community and say what we should do, yes or no, that is never going to get us anywhere. That is an absence of leadership. If our provincial government and our national government show up and say that they great economic value in this and asks what concerns environmental or otherwise are there in your area and how they can best mitigate them, to me that would be a very appropriate process. That process has not yet happened.

I would like to conclude my answer by inviting you to take your committee to Apple River in Cumberland County, which is one of the communities that you mentioned, and hear from the people directly themselves. You can all stay at Senator Mercer's brother's house.

The Deputy Chair: Yes. As a point of illustration we can look at the wildlife in the bay. We have mentioned the right whales. The hump back whales feed there for four or five months of the year. It is quite diverse. When the number of right whales really started to bottom out we realized there was a real risk. It was not just a risk. Collisions with tankers and large vessels going through the bay were occurring. Those that were involved to their credit sat down and negotiated or determined a new route for the tankers that pushed all the tankers west and south of the normal route.

It is a price we have to pay. It is one that is worth paying, but it shoved all the tankers much closer toward the Nova Scotia shore. The point that Senator Mercer was making earlier is that two-thirds of that shoreline is Nova Scotia shoreline. Not to be hard on New Brunswick, but the truth is they cannot make any decisions in the Bay of Fundy that do not impact upon us. That is just the geological and geographical fact.

I encourage you to speak to the provincial government, to maybe hold some hearings in that area and to get people's opinion. We are pro development but risk management is just responsibility. It is just being responsible with the issue. We not only owe it to all Nova Scotians not only to maximize the potential benefit of this project for Nova Scotia. We owe it to ourselves and future generations to ensure that risk mitigation and risk management is properly addressed in one of the most sensitive marine ecosystems in the world. I would encourage you to put a little heat on the provincial government. I have spoken to them today about the same thing because I think the public of Nova Scotia would be in favour and would support it.

Mr. Baillie: Thank you. If I could just react to that very quickly, I want to add to my earlier answer that I believe the outcome of proper public consultation would be a routing of an extension of the pipeline to Point Tupper to avoid the Bay of Fundy altogether. Not to mitigate risk in the bay but actually avoid the bay would be the outcome of those discussions.

Much like when they are routing the pipeline over land across the country there will be routes picked for environmentally sensitive reasons and appropriately so. That should also be the same as the pipeline makes its way into Atlantic Canada and the bitumen itself makes its way across Atlantic Canada and out to open ocean. That is a very good point.

The Deputy Chair: I just want to finish up with this point. The National Energy Board has hearings stalled for a number of weeks as it had to reconstitute itself, but I understand that as of yesterday the full complement of the board was reappointed. They should be calling for more hearings soon. I would encourage you to apply for intervenor status on behalf of the people of Nova Scotia so you could bring these concerns forward to the appropriate authorities.

You are our last witness, Mr. Baillie. We like to think sometimes that we save the best for last. I hope so. On behalf of the Standing Senate Committee on Transport and Communications, thank you very much for your presentation today.

(The committee adjourned.)