Proceedings of the Standing Senate Committee on
Transport and Communications
Issue No. 34 - Evidence - May 1, 2018
OTTAWA, Tuesday, May 1, 2018
The Standing Senate Committee on Transport and Communications, to which was referred Bill S-245, An Act to declare the Trans Mountain Pipeline Project and related works to be for the general advantage of Canada, met this day at 9:30 a.m. to give consideration to the bill; and in camera, for the consideration of a draft agenda (future business) regarding its study of emerging issues related to its mandate and ministerial mandate letters.
Senator David Tkachuk (Chair) in the chair.
[English]
The Chair: This morning the committee is examining Bill S-245, An Act to declare the Trans Mountain Pipeline Project and related works to be for the general advantage of Canada.
I am pleased to welcome our first witness of this study, the Honourable Senator Douglas Black, chair of the Banking Committee and sponsor of the bill. Senator Black has also been a member of the Transport Committee in the past and participated in its pipeline study in 2016.
Thank you, senator, for attending our meeting. I’ll invite you to start your presentation and, afterwards, senators will have questions. The floor is yours, Senator Black.
Hon. Douglas Black, sponsor of the bill: Thank you, colleagues. May I start by apologizing for my voice. I picked up a cold from my new granddaughter. I hope there will be other gifts coming from her over the years other than this. I do apologize because I know it’s difficult to listen to. I will be as short and to the point as I possibly can be.
I’m here this morning as the sponsor of Bill S-245, An Act to declare the Trans Mountain Pipeline Project and related works to be for the general advantage of Canada. I know you have all looked at the bill. It’s very simple and very straightforward. The purpose is to outline what the title says, and the one operative clause of the bill simply provides that the pipeline project and related works are declared to be works for the general advantage of Canada.
What we need to focus on today, and what I’m going to focus my remarks on, is the national interest. Why is this bill in the national interest? Why does this need to be done? Before doing that, I do want to comment quickly in respect of various constitutional questions or issues that have been raised.
There has been some commentary, all of which I respect, that perhaps this bill is not necessary because the Government of Canada already has the authority to regulate pipelines across borders. And, of course, that is correct.
I want to talk about the genius of section 92 of the Constitution Act for a moment, if I can.
It provides three things. It says there’s a basket of federal powers. It says there’s a basket of provincial powers. And the genius of the act is that it says that in the event that the federal power is frustrated by the provincial power, then the Government of Canada can intervene by way of declaration to ensure the objectives set by the Government of Canada were met. That was either extreme foresight or genius on behalf of the formers of the Constitution. So that is where we are today. That is the circumstance that we are facing.
I will also tell you, having practised law for over 35 years and having run major law firms, I can assure you that if there are three lawyers, there are at least five opinions. That’s how lawyers work. I am not at all surprised that there will be constitutional folks who disagree with my interpretation. I believe I’m right. I believe that the Government of Canada must declare. It must be explicit, and the constitutional law of Canada is settled on that point. You must declare something as being in the national advantage of the country.
You need to set out exactly what it is you intend to achieve. What we want to achieve here is to ensure that the Government of British Columbia and the municipal governments in the Lower Mainland cannot frustrate the intent of the Government of Canada. And that is what is happening now. That is clearly what is happening now. That, unfortunately, needs to be resolved.
One or two of my colleagues have argued that no, this is too heavy a hammer and what we need to do is rely on cooperative federalism. I would say to you that for the last 30 or 40 years, with rare exceptions, we’ve been able to do exactly that. We’ve settled disputes in Canada.
This dispute cannot be settled cooperatively. We have seen just in the last two weeks the Government of Alberta introduce legislation to cut off oil supplies to British Columbia. Last week, the Government of British Columbia referred three questions to their Court of Appeal. Those three questions, very clearly, are designed to stop the flow of bitumen into British Columbia.
This matter cannot be resolved through traditional methods, which we all regret, but there it is. That’s why, as a basis for federal action and as a foundation for federal action, this tool is needed in the toolbox of the Government of Canada. And that’s why I’m arguing for that.
It is very important to keep in mind a recent case in respect of the declaratory power — which incidentally has been used over 400 times since Confederation, so there haven’t been a lot of them — involving the atomic energy facilities in Ontario. Specifically, what was at question there is whether the labour relations of the atomic energy facilities are to be regulated by the Government of Canada or the Government of Ontario.
Traditionally, of course, labour relations are a provincial matter. The government declared that, in this particular case, because the operation of the atomic facilities were for the general advantage of Canada, labour relations need to be consumed by that, and they won.
One of our colleagues in the Senate quoted widely from the atomic energy case but unfortunately he quoted from the dissent. The dissent is the person who disagrees, the person who lost the case.
The nub of the case, very simply put, is as follows. I am quoting from Mr. Justice La Forest, who wrote for the majority when he said:
The declaratory power should not be narrowly construed to conform to theoretical principles of federalism.
The declaratory power is what we’re talking about here. The quote refers to the exact point here. The declaratory power should not be construed to conform to narrow principles of federalism. The Constitution must be read as it is, and it expressly provides for the transfer of provincial powers to the federal Parliament over works declared to be for the general advantage of Canada.
My submission to honourable senators is the law is clear on this point.
Moving on to why we need the bill, there are two overriding reasons, senators. First, we took an oath to uphold the rule of law. The rule of law is being violated currently around the construction of the Trans Mountain project. You all know the same facts that I know. The British Columbia government, no doubt about it, is using the courts to endeavour to stall or delay the project with a view to creating the exact scenario which they have, which is that Kinder Morgan is throwing up their arms and saying this is just all too much for a private sector contractor.
I will give credit where credit is due: that strategy is working. We have injunctions to protect workers and to protect the project being regularly violated, and people being arrested. We have RCMP officers injured. We have the City of Burnaby refusing to pay overtime to police officers to police the project outside 40 hours a week. We are on the verge of a breakdown of the rule of law on this project, and we as senators cannot condone that. We can’t condone that.
Second, there’s this whole issue of Canada’s competitive position. Of course, while the expansion of the Trans Mountain Pipeline is important in its own right, it’s critical that we get energy off of the North American continent to avoid the discount that we’re currently paying. It’s also important as a symbol, because the symbol that is being presented currently is that Canada is closed for business. We have a sign on our window saying “closed for business,” very damagingly.
I provided you a copy of the article in last week’s The Economist, where The Economist referred to this ongoing activity in Canada as a three-ring circus. That simply underlines what the international community is saying: that we cannot get projects built in this country. And we can’t. We couldn’t get Gateway done, we couldn’t get Energy East done, we couldn’t get the Petronas LNG facility done and we’re on the verge of not getting Trans Mountain done.
Let me read to you something you may have seen already. It’s a letter to the editor from a chap in Seattle. He wrote to, I guess, Canadians, in the Vancouver Sun. This is the article, from Adam Lloyd in Seattle:
. . . thanks to the citizens of B.C. who seem once again to have blocked an oil pipeline to the coast. Those of us living south of the border will continue to enjoy importing your oil at substantial discounts while exporting our oil from Gulf ports at world-market prices. Your gift to us, around $100 million per day Canadian, is greatly appreciated. We marvel at your generosity while doubting your sanity.
That, honourable senators, is where we are. The Bank of Nova Scotia estimates that we are losing $15 billion a year because of the cost differential. That cost differential can be, if not wholly fixed, in large part addressed by this pipeline. That means schools, hospitals, roads, prisons and supporting the projects that governments want to do, whether they’re provincial or federal.
I don’t know whether Perrin Beatty is giving evidence before this panel. Mr. Beatty is the chairman of the Canadian Chamber of Commerce. He spoke to the pipeline forum that Senator Neufeld put together last week. I would like to read, if I can, a few of his comments in respect of this issue of prosperity and cost to Canada. From his remarks of last week:
Here at home, the energy sector provides and supports tens of thousands of well-paying jobs, both directly and indirectly; drives innovation; and helps to finance our infrastructure and health care system. Without the revenues and taxes from this sector, Canada and the standard of living we enjoy would be very different.
Consider how the impact of the collapse of commodity prices has affected us. The federal government’s 2017 fall economic update described its “profound effect” on the Canadian economy, noting that in the last couple of years, the decline in oil prices has cost the country over $112 billion, or approximately $6,200 for every working Canadian. And this problem is made worse because we cannot get our oil to global markets.
And we cannot get our oil to global markets. There is no halfway house on this. We only have one market for our oil, and it’s the U.S. The U.S., because of their existing policies, is becoming quickly the largest provider of oil and gas in the world.
The Trans Mountain project expansion, Mr. Perrin Beatty underlines, has been approved. They went through seven or eight years of consultation. They jumped through over every hurdle they were required to do, and they have the certificate necessary to proceed, yet they cannot. This sends a terrible message, Mr. Perrin Beatty argues, to investors. He says:
According to the Conference Board of Canada, over the first 20 years of the Trans Mountain Expansion Pipeline, it will generate approximately $47 billion in taxes and royalties for governments.
Forty-seven billion dollars.
An additional $23.2 million in municipal taxes will be paid in British Columbia, and an additional $3.4 million will be paid in Alberta.
That’s to make the point that Alberta is not the main beneficiary of this project. British Columbia and the rest of Canada are. Alberta comes in a strong second, but they are certainly not the main beneficiaries.
Honourable senators, this is what we are facing now. Do we wish to continue our prosperity? Do we wish to signal that we are open for business? Do we wish to signal that if you get a certificate, it has some value? Or do we choose not to?
We know the direct foreign investment to Canada has not only stopped; it’s declined precipitously over the last couple of years. We heard last week Russell Girling, the Chairman and the CEO of TransCanada, one of Canada’s greatest companies and now incidentally widely speculated to be considered to be looking at leaving Canada. He was asked last week if there was any possibility of reviving Energy East. He paused and then said, “No, we won’t revive Energy East. I’m investing in the U.S. and Mexico.”
Last week as well, Rich Kruger, the CEO of Imperial Oil, at his annual general meeting, indicated that they are pulling back on investment in Canada. With projects that are currently happening, the Aspen Project in the oil sands, for instance, they are pulling back investment. Add that to Encana, another great company in Canada. Their CEO is moving to Denver. Add that to Synova and them indicating they are stopping further investments in Canada.
Where do you want me to stop? This is going to have a material impact on our national financial interests.
There are a couple of other issues that I’d like to address quickly, Mr. Chairman. One is in respect to the very important issue of Aboriginal First Nations consultation. Along the line and along the marine tanker route, there are 43 First Nations groups that have signed benefit agreements with Kinder Morgan. Thirty-three of those groups are in British Columbia and 10 are in Alberta. I am told that represents 80 per cent — 80 per cent — of the First Nations groups along the pipeline or the maritime right-of-way.
I also provided to you last week Trans Mountain’s public document on Aboriginal consultation a report dated July 2017. You will see an exhaustive summary of the work that has been done by Kinder Morgan to engage with Aboriginal people. I urge to you read that, but I urge you to read it with the concept that 43 groups, representing 80 per cent of the participants, have agreed that this is in their interests. Certainly, you can check the press releases from various Aboriginal and First Nations groups in British Columbia that are strongly on side.
Let me just say more for the record than anything, one of our colleagues has argued that section 35 of the BNA Act, which affirms the rights of First Nations peoples, somehow goes further, to give First Nations people a veto over the development of projects. That is not right in the law. That is not accurate, as most recently affirmed by two decisions of the Supreme Court of Canada that were released last year. For those of you who followed these matters, I won’t get into details here but it’s the Clyde River case from Labrador and the Chippewas of the Thames case. They confirm that there must be open, honest and fulsome disclosure, and there must be meaningful consultations — we all agree on that — but at the end of the process, if there is not an agreement, there also is not a veto given to First Nations’ groups.
Similarly, there was mention made of the United Nations Declaration on the Rights of Indigenous Peoples, specifically article 32. I would urge you to read article 32, and I’d also urge you to read article 46. Article 32 indicates the “States shall consult and cooperate in good faith with the indigenous peoples” respecting rights. Fine. This section, incidentally, is poorly drafted, but nonetheless. It then goes on in article 3 to indicate that there are redress mechanisms, but you only contemplate redress mechanisms if there is not a resolution, so implicit in article 32, there is not a veto. It doesn’t exist.
Clearly when you read that with article 46, it indicates clearly, “The exercise of the rights set forth in this Declaration shall be subject only to such limitations as are determined by law . . . .” — read that to be a NEB approval for a pipeline, and in accordance with any such obligations, and these “. . . limitations shall be non-discriminatory and strictly necessary solely for the purpose of securing due recognition and respect for the rights and freedoms of others . . . .”
There is a clear contemplation that there needs to be a balancing of rights, with a clear contemplation that Kinder Morgan, incidentally, has a right in this too. That is how I would address that declaration.
I have one last point and then I’m done, Mr. Chairman. There is a point that Senator Tannas raised in the initial debate on this. I have not raised it until now, but it needs to be put on the table in the context of the national interest. There is a fury building in Western Canada, specifically in Alberta — a fury. I get it all the time, whether in airports, restaurants, on the street or wherever I go. People talk to me about their deep frustration with how they feel that the West is being treated around this particular project. Until last week, I thought that was all anecdotal.
The CBC commissioned a poll, which was released last week. I don’t necessarily endorse this, but in terms of a national interest, we as senators have to consider these facts. The facts are that the poll shows that 60 per cent of Albertans feel that those in charge in Ottawa will look after other parts of Canada first, and 70 per cent of those surveyed — the survey was 1,200 people, which is statistically sound — said that Canada’s system of equalization payments is unfair to Albertans.
Pollster Janet Brown, whom I know well and is a very accomplished pollster in Alberta, said:
I think there is a very strong sentiment that we’re being taken for granted and that the interests of other parts of Canada take precedent over the interests of Alberta.
I do not say that. I do not endorse that, but I say that is what is happening. I think we all know that between 2000 and 2014, Alberta was in the fortunate position — and I underline Alberta was in the fortunate position — of being able to contribute $200 billion to the national endeavour, while taking out $57 million.
I simply put that on the table to say that when we are considering the national interest, it’s the rule of law, it’s our competitive position and it’s the fabric of this country. I cannot underline how serious this matter has become. I know there are senators around this table from the West who likely can validate what I’m saying, and I take no pleasure in saying that.
Mr. Chairman, I’m welcoming questions.
The Chair: Thank you, Senator Black.
I’ll just start it off. I’ve been following this issue, as you know, for quite some time. The people of British Columbia, at least in the research and in the polling research I’ve seen, not only approve of the project across the whole province, but they approve of the project in the city of Vancouver and its surrounding area. How will this bill change how the federal government will approach the issue? To me, I agree with you. I think they have the power now to just go ahead and build the darn thing, but nothing seems to be happening. How will this bill change that?
Senator D. Black: Thank you very much, senator, for the question.
I believe it will give cover to the Government of Canada to ensure that if the City of Burnaby endeavours to block roads — incidentally, the NEB can do this now, but the NEB has been severely discredited by this government, unfortunately. So for them to exercise their authority was going to bring questions into mind. I think there needs to be a foundation for action, that the Government of Canada can say, “We have this authority. We hope we don’t have to use it. But if we have to use it, we’re going to use it in order to get the pipeline built,” so Burnaby can’t interfere with simply things like road access, road closures, traffic light realignment, access to water, access to sewage. These are all things that can be done and can be controlled by a municipality, which could drive this and simply stop the project.
Senator Galvez: Thank you very much, Senator Black. I think it’s the first time that I have as a witness an expert colleague.
I was looking at your Senate website last night because you were coming here, and I was listening to your speech. I thought that we were going to just talk about the importance to Canada, but you started talking about the project itself and the company and TransCanada. I couldn’t help but remember that according to your website, you were the founder and president of the Energy Policy Institute of Canada, which is known as a lobby group that represented companies such as TransCanada shale, Suncor and the Canadian Association of Petroleum Producers.
In light of that, I was surprised that your speech appeared to me as very much defending Kinder Morgan. Kinder Morgan is a Texas, U.S. company, and you said that the profits are going mainly to B.C. and less to Alberta. But I think that the profits are going to Kinder Morgan.
Don’t get me wrong because, as I said in my speech, this pipeline is 60 years old and it needs to be replaced. We have the rule of law, and it passed the environmental impact assessment, and there are 157 —
The Chair: Do you have a question? We’re not going to settle the dispute. We’re dealing with the bill.
Senator Galvez: Give me one second and I’ll finish.
The Chair: I’m doing the best I can, Senator Galvez.
Senator Galvez: The question is: Do you not think that, by agreeing with this bill, we are taking a political position and we are putting the profits of Kinder Morgan as representative of the interests of Canada?
Senator D. Black: Thank you, senator, for that question. I appreciate that.
No, it’s not a political move. It’s a legal move, in my view. I have no idea of what the financial position of Kinder Morgan is, but I would say I hope it’s flush. I hope they make a tremendous amount of money on the project, because they should. They are taking a tremendous amount of risk.
I would point out to you that the project is going to cost $7.4 billion. That is private sector money. I’m reading from a news release of last week from the Independent Contractors and Businesses Association of British Columbia who are advocating. They are contractors, not the independent oil companies, the people who actually build these projects.
They said:
The $7.4 billion Trans Mountain project will generate $5.7 billion in revenue for the provincial government, and an additional $922 million in municipal property taxes. More than 15,000 construction jobs would be created and there will be investments in energy innovations and training for people working on the project.
So yes, I hope Kinder Morgan makes a profit. But more importantly, because of my work in the energy industry — not despite my work in the energy industry — I understand how much taxes and royalties this industry throws off. That generates and supports provinces such as yours, the province of Quebec.
Senator Gagné: Thank you for your presentation.
The economic advantage of this has been very well documented and I will not dispute that. Being from Manitoba, I know for a fact that we have benefited from the revenues of this industry.
You mentioned in your presentation that Canada’s power to declare a project to be for the general advantage of Canada was used over 400 times. Did any of those bills originate from the Senate or were they all from the House of Commons?
Senator D. Black: I don’t know that; I’m sorry. I just don’t know the answer. I could find that out. I don’t know the answer to that. What I do know is that the answer to any number of those bills dealt principally with rail lines that cross provincial borders.
Senator Gagné: Senator Pratte, in his second reading speech, mentioned of the declarations to date, only one attaches the words “related works” to the object of the declaration. Those words were added to a declaration in 2014, so it was a new trend. I didn’t do any research. I don’t know if that is correct or not, but I’m just quoting from his speech. What would you say is the scope of the words “related works”?
Senator D. Black: First of all, let me say that my interpretation of section 92.10(c) is that you have to crib the words in that section in the declaration. That’s what I think. It talks about what you need to do, so prudent drafting would be to take that and put that in the legislation. That’s why I did that.
But what does “related works” mean? It’s very broad. We saw how broad it was in the atomic energy case where it even incorporated labour relations. So it’s not only physical works such as roads, bridges, water attachments, electricity attachments or storage, but it’s also anything related to the construction, maintenance or operation of the work.
Senator Gagné: Just one small question: What would be the consequences of this wording “related works” on the provinces and the municipalities?
Senator D. Black: The consequence of that is that it takes from the provincial government or the municipal governments the ability to regulate with respect to construction, maintenance and operation of a pipeline. It gives exclusive jurisdiction to the Government of Canada. I say with regret that that’s unfortunately where we appear to be because there are so many actions being undertaken to frustrate the project.
Senator Gagné: Thank you.
Senator Plett: Thank you, Senator Black, for your comments.
Being from Manitoba, I think many Manitobans share the same feelings that Albertans do about a government that isn’t necessarily interested in all parts of our country equally, so I certainly share Albertans’ sentiments in that.
I do agree with you that I really hope somebody makes money on this pipeline. That’s what makes the world go around, people making money and not having $18 billion deficits.
On April 15 of this year, the Prime Minister stated that the Trans Mountain Pipeline expansion is of vital strategic interest to Canada and announced that the federal government would pursue legislative options that will assert plus reinforce the Government of Canada’s jurisdiction on this matter. To date, however, this has been all talk and no action.
Senator Black, were government officials consulted in your preparations for this bill?
Senator D. Black: Thank you, senator.
They were advised. I advised the office of the Minister of Natural Resources, and I advised the Prime Minister’s Office. I did not consult.
Senator Plett: Well, some of us believe advising is consulting, so it’s good that you let them know.
Senator D. Black: I let them know.
Senator Plett: To what extent, senator, might this bill duplicate what the government at least is saying they are going to be bringing out in some intended legislative efforts? Will this be a duplication? Will we be doing this with Bill S-245 now and another version of Bill S-245 in a few months from now if the government ever gets off its rear end to move something forward?
Senator D. Black: Thank you very much, Senator Plett, for that excellent question.
My view and my hope was that the government should be doing exactly what I am doing. I’m of the view the government should be launching this legislation.
Here’s the problem. I’m advised — and I can’t tell you it’s the actual law — that if there is a bill in Parliament, you cannot introduce another bill similar to it that has the same intent and effect. If that is the case, this is the bill that the government needs to get behind if they wish to use a declaratory action. I could be wrong on that. I don’t know. I simply don’t know that. But I, for one, would be delighted if the Government of Canada called me today and said, “Senator Black, would you and Senator Neufeld be prepared to withdraw your bill if we put in exactly the same in the House of Commons?” I would say, “Can I sponsor it in the Senate?”
I’m not looking to do this other than I strongly believe it’s in the national interests of this country.
Senator Plett: Many of us agree with you, Senator Black.
[Translation]
Senator Boisvenu: I have a lot of questions. First of all, welcome, Mr. Black. There is a survey in this morning’s media that shows that Canadians are for the most part in favour of building pipelines. Canada sells its oil for 20 per cent to 30 per cent less on the American market. Quebec pays 30 per cent more for its oil. You say that the government should be promoting this bill.
Why does your bill not concern all of the pipelines to be built in Canada, rather than only the one in British Columbia, since the oil issue does not only affect British Columbia or Alberta, but also all of Canada? I’m thinking of the Energy East pipeline that the government supported, but that it did not have the courage to take to the finish line, as in British Columbia. I know that in Quebec, there are other pipeline project possibilities. Why did the government not support a general law rather than a specific one?
[English]
Senator D. Black: Thank you, senator, for the question.
My reading of the law is that the declaration has to be specific to a project. The declaratory power in article 92 of the Constitution doesn’t allow for general application; it has to be targeted. Similar to the question that was asked by my colleague from Manitoba, my reading of the law is that it must be specific and it has to be inclusive and explicit.
[Translation]
Senator Boisvenu: Does the federal government own other pipelines? Mr. Trudeau stated that the government would participate in funding the pipeline if necessary. Has the federal government funded any other pipeline in Canada and become part owner of it?
[English]
Senator D. Black: Not to the best of my knowledge.
Senator Bovey: I’m picking up on the same theme, if I may. Thank you, senator, for bringing all this forward. I’m going to your comment about the symbol of Canada being closed for business.
We know the pipeline has been agreed to. We know that industry has spoken a lot. We know that environmentalists have been heard. We know there’s been a lot of consultation, and the issue before us is one of national interest.
Perhaps I’m showing my naivety in a lot of this, but with what is going on in the Commons now, am I right in understanding that they are bringing something forward? And if that’s the case, how does what you’re bringing forward relate to that? I’m looking for ways of determining how this will add to the debate and the discussion. Is there a fear that further debate and discussion on something that’s already been agreed to might slow down the process?
Senator D. Black: That’s a very good question in terms of process. I don’t know because I’m not being consulted by the Government of Canada. What I think strategically is that if this bill were to pass the Senate, they could indicate that the Senate has indicated that it believes this work is in the national interest of Canada, and they could rally behind it without them being a sponsor. That’s what I think.
Senator Bovey: Just one quick follow-up on that.
Senator D. Black: Do you know what I’m saying?
Senator Bovey: I know what you’re saying. I hope you can read through the confusion; it’s not really confused.
Senator D. Black: I don’t see confusion.
Senator Bovey: I’m interested in what you think the timelines are. When we talk about matters of national interest, sometimes they are longer term and sometimes they are very short term, and I think we see this in many aspects of Canadian society. What kind of timeline of urgency do you see with this in light of the concerns that Canada is closed for business?
Senator D. Black: It is in the highest level of intensive care now, because we know that Kinder Morgan, who are the proponents and are prepared to spend $7.4 billion of their own money, are saying, “Look, we can’t do this anymore. The risk is too high.” May 31 is the date they have indicated that they need some certainty.
Kinder Morgan, to Senator Galvez’s good point, doesn’t need our money. They need certainty that they can enforce and utilize the approvals that they have legitimately earned. Now, I presume that if we give them risk backstops, I don’t know any company that would not accept that, but they want certainty. I believe this is urgent and needs to pass the Senate as quickly as it possibly can, and then move off to the House of Commons and, if the House of Commons shares our urgency, this can be done by May 31. I believe Kinder Morgan will say that shows there is backbone here and they do have the certainty they need to proceed. That’s my hope and calculation.
The Chair: If it doesn’t happen, can they sue the federal government for all the money they spent over the last seven years to try to get this project going? They have all the approvals that were asked for and now nothing happens. Can they sue them? What would you advise them to do?
Senator D. Black: I’m now speaking not as a senator but as a lawyer, but you bet your sweet bippy — and the Government of British Columbia.
The Chair: Senator Dawson, what should be the translation of that?
Senator Dawson: I don’t want to say.
Senator Manning: Thank you, Senator Black, for your presentation this morning.
For the information of Canada and more specifically Newfoundland and Labrador, I know full well what the oil industry means out west and to the national interest, and we certainly hope this project finds a green light with everybody. On the comments you just made with regard to Kinder Morgan not needing our money but wanting certainty, hopefully being passed will provide that.
Prime Minister Trudeau has said that Minister Morneau would have talks with Alberta and Kinder Morgan about taking steps to accomplish what he called de-risking the venture from further delay. Can you maybe expand on exactly what that means? What are your views on the possibility of governments taking a financial stake in the pipeline to make sure it gets that green light that we need?
Senator D. Black: Right. Thank you very much, senator.
I obviously want this project to advance, and therefore I would support what is required to cause it to advance. But generally speaking, I don’t ever support governments getting involved in private business because I think governments usually make the wrong choices. We shouldn’t be in this position. We shouldn’t be here where the Government of Canada and the Government of Alberta are looking at basically guaranteeing risk.
What does that mean? That means guaranteeing for delays. That means guaranteeing for litigation. I don’t know how far this definition is going to go, but it’s going to be hundreds of millions of dollars of risk that is going to be transferred from the company to the government. So be it. We’ve allowed this flag to just flap in the wind for so long now that we are where we are. So if that needs to be done, it has to be done. And there’s certainly a will in Alberta that if it has to be done, it has to be done.
But the key point is that we have to have certainty because just changing the money doesn’t get a pipeline built. All it does is take the heat off Kinder Morgan. It will take the financial burden off Kinder Morgan and transfer it to us, but we still have the problem. The problem is we still have Burnaby and British Columbia endeavouring to interfere to cause the project to fail. That’s the problem here, and that’s what this bill deals with.
Senator Boyer: Thank you, Senator Black, for your very interesting presentation.
I have a couple of questions. One of them has to do with your mentioning the international community and the United Nations Declaration on the Rights of Indigenous Peoples. I am wondering about the 20 per cent who have not signed on and how the principles of free, prior and informed consent found within the declaration have been implemented with the 20 per cent that have not signed on.
Senator D. Black: Thank you, senator.
I cannot speak specifically on that, but I can assume the following: that the groups, the 20 per cent, who have not signed benefit agreements have had the same overtures, opportunities, consultations and meetings that every other group had. They just elected, for their reasons, whether they were business-related or otherwise, not to sign agreements, and so be it.
Senator Boyer: And that actually the free, prior and informed consent was implemented at that time?
Senator D. Black: I’d have to assume so. Again, to Senator Galvez’s point, I come from the energy industry, of which I’m proud. I have made a major contribution, I believe, in terms of energy policy in this country over decades, of which I am proud, and I have seen that the work Kinder Morgan has done has actually set the standard for consultation on pipelines. I’ve seen other methods utilized. I’ll just leave it at that. Kinder Morgan, under their leader in Canada, a gentleman called Ian Anderson, deserves a sainthood in my view for the work he has done endeavouring to consult with municipalities, First Nations groups, contractors, unions and the complete gamut of stakeholders.
Of course you’re not going to get 100 per cent of people in agreement. That’s simply not possible, but they have reached a point where 80 per cent of the groups along the line agree, which apparently represents about $400 million in benefits agreements just for the First Nations group, plus employment opportunities. That’s in addition to that. That doesn’t count municipalities like the municipality of Kamloops and a new sports centre. I say that, and I don’t know that specifically, but that kind of asset has been developed along the route.
My view is that the consultation has been exhaustive. You, as one of Canada’s leading lawyers, would know that if you look at the Clyde River case — fascinating reading, I thought, but we have to be lawyers to think that — and the Thames case, the Supreme Court of Canada has set out pretty clearly that you have to have open, meaningful and engaged consultation. This is what you have to have. My guess is Kinder Morgan will be able to fit within that quite comfortably.
Senator Boyer: The court has also said it’s determinant upon the depth of the effect on the Indigenous rights protected in section 35 on how deep that consultation actually goes.
Senator D. Black: I completely agree with that analysis.
Senator Boyer: Thank you, Senator Black.
[Translation]
Senator Verner: First, I’d like to specify that I am not a member of this committee, but as a senator, I want to participate in the debate. I’m going to pick up the ball, senator, by saying that you can be proud of your contribution to the institute you founded regarding policies related to the oil industry.
You mentioned the resentment citizens have for this project in the West, in Alberta more specifically. These are political considerations, but contrary to what others have said, I think that the priority here is its economic character.
It is in the national interest to ensure that a business that comes here to invest, and has gone through all of the steps to obtain its certificate, does not have its right to proceed withdrawn. At the legal and economic levels, that is nonsensical, and in my opinion, it tarnishes the reputation of the country internationally.
That said, what do you answer to those who say that the bill as you propose it could be challenged before the courts, which would, consequently, delay the project once again?
[English]
Senator D. Black: I understand that completely, and that is why some months ago, when I first proposed this, I said that the immediate steps should be the Government of Canada should pass this and refer it to the Supreme Court of Canada and just cut to the chase. We have a reference now to the Court of Appeal in British Columbia that, of course, this is going to end up at the Supreme Court of Canada. That’s the plan. So what I would do, when the Government of Canada has the authority, is to refer it immediately to the Supreme Court of Canada.
There was an editorial in this morning’s The Hamilton Spectator. I hadn’t known what was to be said there, but apparently this was done in 1975, when the Senate and the House of Commons passed the wage and price controls, if you remember. When they passed the wage and price controls, apparently they passed it and then referred it to the Supreme Court of Canada. Similarly, in the Senate reference, two or three years ago, the Prime Minister referred certain questions to the Supreme Court, and there was an expedited hearing.
I don’t speak for the Supreme Court of Canada, but I think they’d give this an expedited hearing, because they understand the consequences. That’s my feeling, senator.
[Translation]
Senator Verner: But you did refer to a May 31 deadline. I was wondering if things can really be done that quickly.
The last point I want to raise is that you probably read —
[English]
Senator D. Black: May I just comment on that? By May 31, you can’t have a reference to the Supreme Court of Canada and a decision, but Kinder Morgan has said they want certainty. They want to know there’s a plan. What is the road map for certainty? My view is that if they see a road map that makes sense, they’re going to say, “Okay, let’s drive ahead.” Thanks, senator.
[Translation]
Senator Verner: In the Globe and Mail of April 13, you probably read the article by John Ibbitson that contained an interesting analysis, and concluded that if the project fails, the provinces could become independent economic regions that would no longer wish to co-operate in the building of the common infrastructure necessary for Canada’s development and prosperity. Serious economic consequences have been discussed, but that one may be the most grave. I’d like to hear your opinion on that.
[English]
Senator D. Black: That is the risk we’re facing; that is absolutely the risk we’re facing. In addition, we’re facing more oil moving by train. The newest phenomenon is oil moving by truck, and nobody believes that’s a safer way to go.
Senator McCoy: Thank you for your presentation, Senator Black. It was very well done.
I will give a full disclosure for anyone watching the committee. I am from Alberta, so my comments are very much hoping to persuade others to see the national interest. I think this really has echoes of the great pipeline debate of the 1960s, if you remember. In the 1960s, we actually built the TransCanada Pipeline in Canada after one of the most raucous debates in the House of Commons and the Senate, and it was declared to be in the national interest and nation building to have a pipeline to Atlantic Canada, but they stopped in Montreal.
The Chair: And they did it again.
Senator McCoy: And they’ve done it again.
I have a very quick comment on the CEO of Kinder Morgan. I remember talking to him when I was at home 10 years ago, and he had just gotten back in from the field. He was spending 80 per cent of his time at that point out on the reserves, talking to chiefs face to face. He would sit down and negotiate and spend days with the people. He taught the rest of the pipeline industry how to do it. Some of them still haven’t learned that. I want to endorse that comment.
There’s one point that hasn’t quite been isolated here, and I would like to frame a question that would do so. Some of the economic information we’re hearing is distorted, because it only focuses on what Alberta gets or it only focuses on what the company gets. There are many revenue streams, and we’ve alluded to them. One that we haven’t really highlighted is the revenue stream to the federal government itself.
I can remember looking at the revenue streams a few years ago out of the oil sands and being surprised that the federal government actually gets almost as much or more revenue from the oil sands than Alberta does. It’s a combination of royalties, because they have their own royalties on it, and taxes on companies and headquarters. With every headquarters that moves away or downsizes, Canada loses that. The significance of this is that it’s revenue that goes into the federal coffer, and it’s the federal treasury that pays transfer payments.
I would like to know the amount that comes in for the federal government that allows Quebec to have almost free child care as a result of transfer payments that we in Canada are able to afford to pay some of our colleagues across the country. We think that everybody should have the same standard of living, from sea to sea to sea.
The Chair: Did you want a comment?
Senator McCoy: I want the amount. What is the amount?
The Chair: Okay. Do you know the amount?
Senator D. Black: I sense the ice is very thin.
The Chair: That won’t work, Senator Black.
Senator McCoy: Do you want to take that under advisement?
Senator D. Black: Is the question the amount of transfer payments that went to the Province of Quebec last year?
Senator McCoy: No. I want to know how much these projects, this one in particular, contribute to federal government revenue. It will be a substantial portion of its overall revenue, and it probably would go some distance even to paying down our federal deficit and accumulated debt.
Senator D. Black: I will get that, Senator McCoy, but the bottom line is that it’s billions of dollars. I do know that, via equalization, last year, Quebec benefited about $12 billion. Ontario benefited $1 billion. This is at the height of the economic challenges in the West. As to whether that assisted with child care, I have no idea, but I know that’s the number. I can also add — and you would agree as an Alberta senator — that Albertans are happy to be in the position to support this. There’s no doubt about that.
Senator McCoy: It’s one of the principles of Canada. I support it.
Senator D. Black: We just want to be able to continue to support it.
[Translation]
Senator Cormier: I am going to ask my question in French.
Thank you, Senator Black, for your presentation. I indeed understand the issues that are at play. In fact, perhaps I should put my question to constitutional experts. It is rather political, and has to do with federal-provincial relationships. I’m trying to understand things properly, given what happened with the Energy East pipeline project, and the position of some of the provinces. What would be the impact of this project if the federal government exercises its power? What would be the retroactive impact, in your opinion, on federal-provincial relations, if you think of what happened with the Energy East pipeline? I’m trying to get a sense of the impact this project will have on the federal government’s relationship with the provinces if it goes ahead.
[English]
Senator D. Black: Thank you very much, senator, for that question.
We have to always keep in mind that Energy East did not have an approval to build the pipeline. They were advancing their project and they simply ran into too many roadblocks, and it became clear to them that this just wasn’t going to happen.
Trans Mountain has their authority from not only the Government of Canada and the National Energy Board, but from the Government of British Columbia. They got their driver’s licence, and now they’re being told they can’t drive. Energy East was a little bit different. The project was cancelled before they got to that point.
My view of the constitutional basis is that this will affirm that there should be free movements of goods and services across the country. That is my political view. I believe we should be able to move goods freely across the country. Not everyone agrees with that, including the Supreme Court of Canada. But certainly we should be able to move oil from Alberta across the country. We should be able to get oil to your province.
It’s not your question, but your province is importing. Atlantic Canada and Quebec are importing 700,000 barrels a day of oil at world price, when we can sell it to you? It’s crazy planning. Nonetheless, that will be for another day.
So the answer to your question is that Trans Mountain and Energy East aren’t comparable because Trans Mountain had the authority and Energy East didn’t.
Senator Dawson: Just to be on the record, I’m going to be supporting you, Senator Black. I think my friend Josée and my other friends from Quebec fought two referendums convincing Quebecers that we’re getting a good deal out of Canada. I’m not ashamed to say that I think that we are getting a good deal. This is a very good example of the deal.
I resent two things. I resent the government’s delay on acting on it. I think they should be acting. But I also resent, and I’d like to you comment on this, the artificial deadline of May 31. Why did we make it to that point where they had to have this very short deadline, and what happens if, for all kinds of reasons, we delay the bill or the bill is delayed in the House of Commons? What do we do? Do we back away?
Senator D. Black: Thank you very much, senator. It’s a very good and complicated question.
I believe, as I’ve said before, that if we lay out a pathway to certainty, that Kinder Morgan will be satisfied. I don’t think all the boxes need to be checked by May 31. That is the first point.
On the second point, why May 31? I am actually surprised that Kinder Morgan didn’t do this almost a year ago, after the change of government in British Columbia and the change of tone. I’m surprised they didn’t act at that point in time, but they didn’t.
I think what happened was that they started to see the level of civil disobedience ratchet up. I think they started to see the comments of various leaders — that would be environmental leaders and professional paid individuals whose job and role it is to disrupt this pipeline, all funded from the U.S. — and I think they started to see that they were going to end up in a very difficult position. I think — and I think I know this — that their employees were being harassed off the job. This is a very small community, and I think it just became untenable. It just became untenable that their employees were feeling threatened. Their workplace was being threatened. They were being secured by the RCMP and, at some point, people looked at each other around the table and said, “We can’t do this. We just can’t assume these risks.”
As good as they are, they are pipeline builders. They’re not nation builders. They don’t solve 150 years of issues. They just want to build a pipeline. They want to expand a pipeline. And they’re saying they can’t deal with this.
I just think the deadline became untenable from a personnel point of view. I don’t know that; that’s a guess. I would simply say that I believe that on May 31, if there’s a pathway to conciliation that will protect their interests, I think that there will be agreement.
Senator Raine: Thank you very much, Senator Black, for proposing this legislation.
You haven’t talked very much about rail and truck increase. I live in the Kamloops area. I remember when they built the original pipeline, and I remember them talking about building a right-of-way, saying they were going to put pipe in one half and leave the other half for the future, for when we may need to replace the old pipeline with a newer one. It just makes so much sense to me.
I’m very frustrated, and I think many people in British Columbia who don’t go to demonstrations feel very frustrated that what is a very small group is holding up this project. When these activists can only organize a couple hundred people in Burnaby, which is the centre of the Lower Mainland, to hold up their professionally printed placards and gather the media’s attention, it isn’t really representative of British Columbia.
I’m wondering if you have any statistics on the increase of rail traffic. When I come to the Senate, I have to stop at a level traffic rail crossing, and now we’re waiting sometimes 10 minutes for the railcars, full of oil, to go by. The railroads in Canada, as you know, were built, and then the cities and towns grew up around them, and they go through the heart of many communities. We all remember the tragedy at Lac-Mégantic. It’s not just the rail but also the trucking. These trucks won’t go over the freeway, over the Coquihalla. They will go down the windy road perched above the Fraser Valley, as are the railroads. If we ever had a rail accident in that part of our geography, what it could do to the Fraser River salmon run and what it could do to feeding a potential forest fire keeps me awake at night.
Do you have any statistics on the increase? If not, do you think we’d be able to find them somewhere?
Senator D. Black: Of course, we could find them. It’s a great question. That’s the worry that keeps us all up.
Right by where my son lives in Toronto, the trains go through. I counted a train this weekend, and 75 oil cars went right through central Toronto. In Canmore, where I live, the longest I’ve counted is 140 cars. That’s heading from Canmore west through the Rogers Pass. I don’t know what we’re thinking.
I understand that carriage of oil by railroad will increase 20 per cent this year. We’re moving in the wrong direction. It should be declining by 20 per cent. But product has to move, and the product will move.
Senator Oh: Senator Black, thank you very much for your presentation.
I am sitting in today. I am taking an open view of what I think. We all know the pipeline going through is going to be financed by Kinder Morgan, and it won’t cost the taxpayer anything. The federal government doesn’t have to come up with any money. They have a licence to go, but now we are getting roadblocks. We know that the pipeline will be good for the environment, reduce trains and reduce the land transportation. What is all this holding back behind the scenes? Is there another deal that is better in the making that you are not aware of and none of us are aware of? What is the holding back for the best interests of Canada and for the international stage?
Senator D. Black: Thank you for that.
I’m only, of course, guessing in my answer. There are a number of U.S.-based foundations who hold the view — and I’m not criticizing their view. I accept people have different points of view; I don’t agree with it. Their view is that the oil sands in Alberta are an asset that should be closed. Their view is that the way you do that is you prevent pipelines from carrying the product to market. As a strategy — and I will tell you a very effective strategy — they have targeted one pipeline after another, and they’ve won every battle they’ve entered. They now see the light at the end of the tunnel. The light at the end of the tunnel is there will be no additional pipelines from the oil sands to market.
Kinder Morgan will be aware of this as well. This is why the activity has accelerated against the pipeline, because there’s now a view that if they can defeat Kinder Morgan, Trans Mountain expansion, that they have not only won the battles, but they have won the war. That is my view, and this is something that I have seen long before I came to the Senate.
That is where the opposition is coming from. As Senator Raine points out, it’s not average British Columbians. The polls in British Columbia support the building of the pipeline. It’s a radicalized environmental lobby.
Senator Oh: This is interference in Canada’s national interest.
Senator D. Black: That would be my view, absolutely. Absolutely.
The Chair: If the pipeline is defeated, won’t the next goal be to disrupt railroad transportation? The end game isn’t the pipeline; the end game is to close down the oil industry.
Senator D. Black: Correct. And roads as well.
The Chair: We’re going to go to a second round.
Senator Galvez: According to the news lately, China is moving away from fossil fuel, and the idea of the pipeline to take bitumen to tidewater is to sell it to Asia. India is in the same way to renewables. On the other hand, at present, our oil from the oil sands goes 99 per cent to the U.S., but the U.S. just declared it is going to be a net exporter. So that must impact the economic benefits of Trans Mountain. What is your impression? Where are we going to sell if Asia and the States are moving away from fossil fuel?
Senator D. Black: Thank you, Senator Galvez.
I disagree with your facts. In fact, Senator Galvez, your facts are wrong.
Let me just refer to the ExxonMobil outlook for energy released three months ago titled, A View to 2040. I’m quoting:
. . . rapidly growing global population and rise in living standards in developing countries —
— that would be China and India —
— will drive a growth in worldwide energy demand of about 25 per cent from 2016 to 2040.
Of that 25 per cent, 55 per cent of the world’s energy needs will be met by oil and gas. Therefore, in the countries you have mentioned, India and China, according to ExxonMobil — and this has also been confirmed by Shell and Chevron as well — the demand for oil and gas will be increasing in those countries through to 2040 when the current contemplation is that will be peak oil.
So your facts are wrong.
Senator Galvez: That doesn’t say that they are going to buy it from Kinder Morgan. Does Kinder Morgan have a contract with any Asian countries now?
Senator D. Black: I would presume. I do not know because that’s business information. Kinder Morgan doesn’t sell oil, Senator Galvez. Kinder Morgan builds pipelines. People who own oil sell oil. So I presume that people who have contracts with Kinder Morgan to put oil in the pipeline have buyers.
Senator Galvez: We can presume anything.
Senator D. Black: I doubt they are doing it speculatively. But I can assure you that if we don’t build the pipeline, we can’t sell oil and we can’t take advantage of these facts.
[Translation]
Senator Boisvenu: Someone asked earlier how many tank cars are used every year to transport oil in Canada. I would like to say that this very committee drafted a report two years ago on oil transportation. In 2015, the number of tank cars used was 400,000, and by 2020 and 2025, the number was expected to be 800,000. That is quite a large number of tank cars.
I will ask my question. Is Canada self-sufficient with regard to its supply of refined oil? My question is not specifically about the bill, but I’d like to know if we also import oil that has been refined by the Americans. Does Canada incur an economic loss by exporting crude oil and buying refined oil?
Should we not be asking ourselves whether we need a refinery in Canada to see to it that the profits stay here rather than being cashed in by the Americans? We send our crude oil to the United States, who then returns it to us as refined oil; I think there is some inconsistency there.
[English]
Senator D. Black: That is correct on the facts. Not only that, Canadian providers of gas are losing market share to gas that is being imported to Ontario from the U.S. We look like fools.
The Chair: And the Maritimes is our largest refining capacity, and they needed that Energy East pipeline. Now they’re filling their boots with oil from other places and refining it and selling it to us and mostly to the States. It is beyond belief.
[Translation]
Senator Verner: I would like to correct something, as a senator from Quebec. We talked about equalization, and as my colleague Senator Dawson mentioned, in Quebec we are very much aware of the fact that we are the largest recipients of equalization payments.
However, I would like to add that according to the Conference Board of Canada, as it stated in 2016, Quebecers are also the most heavily taxed Canadians. And so the conclusion that equalization allows us to offer parental leave and day care in Quebec seems a little simplistic to me, and I wanted to correct that notion. We have to add some nuances to this picture. Senator Black, I know that you agree with me, but I wanted to make that correction for the record.
[English]
The Chair: Isn’t there some kind of perverse formula that if you have the higher tax, you get more money in the equalization? That’s the way it works. So if you don’t charge as much tax, the equalization formula says you don’t need the money, so therefore it goes to the higher taxed. What Alberta should do is raise their tax to about 55 per cent and watch the money flow other way.
Senator D. Black: I want to say that I agree completely with your analysis. You’ll see that I’ve been very careful in my comments not only because I’m being careful but I believe that it’s the great benefit of Alberta that we are able to be such a meaningful contributor in building a strong Canada.
Senator Raine: Last week, several senators organized a very informative presentation by the major players in the pipeline industry and oil shipping industry. I was rather disappointed that there weren’t a lot of parliamentarians who came, but I understand everybody is busy. I was there and what I learned reinforced what I already knew, that Canada is at the forefront of technology in the safety of pipelines and of how we produce and look after the environment in the production of our oil and gas resources.
I’m wondering if you could comment on that, because there is this dichotomy where we produce oil in the most environmentally sensitive way, and yet we can’t sell it. We are forced to import in Eastern Canada from countries that don’t do that. That really is not good for our national interest.
At the same time, I’m aware that in China, because their population is growing and their standards of living are rising, they’re relying on an energy source of coal, and the burning of coal is far worse for the environment than the burning of oil and gas or the utilization of oil and gas.
Could you comment on the equation that we are really upsetting if we can’t get our oil to the market?
Senator D. Black: I understand that China has approved 100 new coal facilities in the last year. That’s that. That’s an easy one to deal with.
At that session last week, we heard from the Canadian pilotage authority and we heard from the oil response authority, both agencies of the Government of Canada. There are three stats that come from that. The pipelines’ safety record in Canada is 99.99 per cent. That is their safety record, and that is just not disputed by anyone any longer. The pilotage has already said that their safety record of oil on water is 99.9 per cent as well, when there have been spills of oil in water that they deal with. In terms of heavy oil, the record is 100 per cent, to your point.
[Translation]
Senator Gagné: In light of Senator Raine’s comments, I’d like to say that oil spills are nevertheless a reality when it comes to oil transport. We must not lose sight of that, even if we have the technology to attenuate risks.
My question is the following: is the cost-benefit ratio balanced between Alberta and British Columbia? Would you agree that Alberta would benefit from this project, but British Columbia will have to assume the environmental risks?
[English]
Senator D. Black: No, I don’t agree with that. I start from the point that the risk of transportation of oil, as is contemplated by this pipeline, is minuscule. The percentage — and you can check this yourself, senator, and I’m sure you will — is 99.9 per cent. We’re talking about a very limited amount. In the event, the 0.1 per cent chance, that a spill occurred, that could happen easily in Alberta as well. That could happen at the point of origin, quite easily. There could be a rupture anywhere on the Alberta side. I just don’t agree with that.
Senator Gagné: What about tanker spills?
Senator D. Black: There has been no experience in the area controlled by the pilotage authority of any tanker spills, but yes, if there were tanker spills, obviously that would not affect directly Alberta.
Let’s keep in mind that these ships are double-hulled. These ships have double pilotage authorities on them in that they don’t carry one pilot; they carry two. Tremendous precautions are being taken. As Senator Greene Raine has pointed out, there is no doubt that Canada leads on every criterion of safety and environmental management. Is it good enough? I don’t know that, but we lead on every standard possible. As I’ve said a thousand times, the B.C. coast is my coast too. I want to protect it.
Senator Mercer: Thank you, Senator Black. I apologize for my tardiness. We all get busy around here.
I have one question that I’ll lead into by saying I get tired of Canada being the boy scout of the world. We play by the rules. We default to the right thing at all times instead of defaulting to our best interests. Our best interest is to sell the product we’re lucky enough to have in Saskatchewan and Alberta, and Newfoundland and Labrador. We continue to play by the rules, and even when we sell our product, we sell it at a discount to the Americans. Canadians don’t understand it, and I really think somebody needs to continue to explain to Canadians that what we’re selling to the Americans, we’re selling at west Texas crude places, at a discount rate as opposed to oil prices. We want to get to tidewater where we can sell at world prices.
After all of that pontificating, we’ve continued to hear people talk about money coming from outside the country to fund the anti-pipeline campaign. As they say in the movies, “Show me the money.” In this case, show me the proof. Does anybody have the proof about where the money is coming from that is funding those groups opposed to the pipeline and that are opposed to nation-building in this country?
Senator D. Black: Thank you for the question. I have two points.
On the first point, as I say pretty regularly when I’m speaking on this matter, there is no country in the world that would not studiously move forward to ensure that its products can be exported. We in Canada are not so good at that. Whether it’s canola, wheat, grains or oil, we seem to find reasons to hold ourselves back, which is unusual, as you point out.
I have no direct information of these matters, because I don’t deal with that, but if you want to follow a woman named Vivian Krause, an entrepreneur based in British Columbia, she has made it her life’s work for the last four or five years to “follow the money,” as you suggest, senator. It might be worth taking a look at her website to see what she displays as being funds that have come from other countries to assist in ensuring pipelines don’t get built.
Senator Bovey: I want to ask about clarification of facts. I lived on Vancouver Island for more than 20 years, and I lived there during the Exxon Valdez spill. I’m sure you agree with me that there were issues of cleanup. It seems my teenage daughters were out on those beaches doing a lot of the cleanup as part of their high school projects.
Just in 2017, there was a Hells Gate railway spill. There have certainly been pipeline spills.
Would you agree that it’d be wise not put our heads in the sand and think that there won’t be crises; rather, wouldn’t we be better off to make sure that we’re prepared for crises when they happen? As I remember it from living on the island, the cleanup from the Exxon Valdez spill took longer than it probably should have. Can you talk to that aspect of it? Instead of making us think there aren’t issues, what do we need to do to protect?
Senator D. Black: We need to ensure that in the unlikely event of a spill, that we can respond in a timely basis with the equipment needed to take the oil from the water.
I really wish you could have heard last week from the pilot and the cleanup folks on the work they’re doing. The Government of Canada, to give them their due, have put I think it’s $150 million into this file over the last year and a half. They have stationed along the coast of British Columbia manpower 24-7 and vessels. In other locations — and he had a map — they have equipment that people will go to.
Their statutory mandate is that they need to respond to a spill in, call it, 36 hours. That’s absurd. They now have the capacity, they told us last week, to respond within six hours anywhere within their area, which runs from the Washington/British Columbia border to the Alaska/British Columbia border. They believe they are ready.
I share the same concerns as you, because the coast is so stunning. We don’t want that ever affected. A couple of years ago, I went out on the water, and you should do it as well —
Senator Bovey: I am this year. It’s already booked.
Senator D. Black: The pilotage people took me out from Prince Rupert and from the Kinder Morgan facility in Burnaby. I wanted to understand whether it was all talk or did they actually have the capacity to protect the coast. I left with the view that they have the capacity. I’m encouraged to see that their capacity has only been enhanced over the last couple of years, as we heard last week. You’re right: We hope for the best, but we have to plan for the worst.
Regarding Exxon Valdez, we need to keep in mind that was a single hull; it was not a double hull. They only had one pilot. There were some very real issues, but I’m not minimizing the need for preparation.
Senator Bovey: As one who lived through it, it was devastating.
Senator D. Black: Of course it was.
Senator Bovey: On the other hand, you are quite right that they have upped the —
Senator D. Black: Technology soared about 20 years ago.
Senator Bovey: Would you agree that part of the national interest is making sure we’re prepared?
Senator D. Black: Absolutely. You live in Manitoba, I live in Alberta, but you would agree with me that that’s our coast too.
Senator Bovey: Absolutely.
Senator D. Black: And we don’t want any damage anywhere along any line in Canada, and there are over 32,000 kilometres of lines in Canada.
The Chair: Honourable senators, thank you, and thank you, Senator Black. We’ve had a great discussion.
Honourable senators, we did invite some other witnesses for tomorrow, including the Minister of Transport, the Minister of Natural Resources, the Government of Alberta and the Government of British Columbia. We were not successful in having them appear, so tomorrow there will be no meeting. On Tuesday morning of next week, we have two panels of witnesses, including legal experts and economists. On Wednesday evening, we have some Aboriginal leaders who are coming. Hopefully we will do clause-by-clause right after that.
With that, I’m going to suspend the meeting and we’re going to take a few minutes in camera — that’s all we’re going to need, actually — and then we’ll be done for the morning.
(The committee continued in camera.)