THE STANDING SENATE COMMITTEE ON TRANSPORT AND COMMUNICATIONS
OTTAWA, Tuesday, April 9, 2019
The Standing Senate Committee on Transport and Communications, to which was referred Bill C-48, An Act respecting the regulation of vessels that transport crude oil or persistent oil to or from ports or marine installations located along British Columbia’s north coast, met this day at 9 a.m. to give consideration to the bill.
Senator David Tkachuk (Chair) in the chair.
The Chair: Before I introduce the actual bill that we’re studying, Bill C-48, and the witnesses, a letter was sent to us. I asked one of the witnesses the other day Wim Veldman about how many tankers are travelling at any one time in the world. On any one day, it seems 7,500 tankers are travelling worldwide. That’s quite an amazing statistic, and 1 billion barrels of crude oil per day.
Today, as well, I want to let you know Global inquired about filming previous to the meeting. They wanted to film Premier Notley getting ready — not while she’s testifying, but before. The premier’s office was concerned that we didn’t allow this. I just explained to Mr. Aiken that that isn’t true. If people want to come in before the meeting, they’re more than welcome to come in. However, once the gavel is down there are no more cameras. It’s totally up to Premier Notley whether or not she wants to have Global in that meeting, just to let you know.
Also, we have a budget that was passed around for the travel we talked about the other day. Do you all have the budget in front of you? It includes travel to Edmonton, Regina and Estevan. I need a motion to approve the budget. Senator Manning. Any discussion?
Senator Miville-Dechêne: Yes. I’d like to move an amendment at this point, which would be:
That the budget be amended to only include public hearings in Edmonton and Regina;
And that the Subcommittee on Agenda and Procedure be empowered to approve the final version of the budget.
I believe this amendment is reasonable, since we’re going to one city in Alberta, which is Edmonton. In terms of balance, compromise and reason, I think we should go to Regina in Saskatchewan. I believe in Regina we will be able to hear many witnesses because we will have a complete, full-day hearing. If witnesses from the industry, workers in particular, wish to appear, obviously we want to hear them.
I find this amendment is reasonable in terms of going and hearing the concerns of Albertans and Saskatchewans in a balanced way.
Senator Plett: Chair, I would assume that the budget asked for was done based on a steering committee meeting and adopting this budget. Again, I find it very frustrating that we have senators who are trying to limit rather than open up discussions.
Yesterday, chair, at a committee meeting, we had a senator who wanted to make an observation at the end of a committee meeting, saying that the official opposition wasn’t nice because they were not supporting government legislation. Here, again, we have people who are supportive of the bill, who want to ram through a bill with no proper consultations, who have spoken constantly to the fact that we should not travel, we should just have people come and see us, we should have people coming by video conference and we should not bother to go and visit the most devastated areas.
Chair, it is imperative that places such as Estevan and others be involved. I’m not going to amend the bill or ask for an amendment, but I would like to see this expanded. We are killing people’s businesses with this legislation. We are devastating a region of our country with this legislation. We should do our level best. When we say we are the chamber of sober second thought, we should go out of our way to see what this is doing to hurt our economy and our country and not try to constantly limit it.
Steering approved this. This was something that Senator Miville-Dechêne and Senator Dawson were — and I shouldn’t even use Senator Dawson’s name when he’s not in the room, but he is a member of steering — arguing and complaining about, that steering hadn’t met. Now steering meets and approves a budget, and we want to try and amend that at a full meeting of the committee. Now, fortunately, this is a public hearing. Again, I hope all Canadians listen to us having committee members who want to curtail and limit our travel rather than expand it.
The Chair: So that is clear, steering approved the fact that we would be travelling to Alberta and Saskatchewan — outside of British Columbia — but we didn’t exactly pick the cities. That was left up to Senator Miville-Dechêne and me. We decided on those three cities right after the meeting when the committee decided to approve the steering motion to travel to Alberta and Saskatchewan. So we didn’t precisely —
Senator Plett: Senator Miville-Dechêne agreed.
Senator Miville-Dechêne: Yes, I did. The two of us did on that particular Wednesday night. I then talked to Senator Dawson and looked at the map, saw Estevan, saw the whole situation and thought for balance reasons — because we were doing only one stop in Alberta, which, as you know, is very touched by Bill C-48 — and because it was more reasonable. I was of the opinion, as was Senator Dawson, that we should do two stops. However, this was not an official steering meeting. That’s why we’re going to the full committee. Obviously, this is my opinion.
I would also object, Senator Plett, to what you said about people — and I think you were referring to me — being for Bill C-48 and wanting to curtail the debate. We have not done that. We heard from many witnesses from Alberta. At the hearing here we will hear from Premier Notley today. We will also hear from a minister for Saskatchewan. We have heard from many witnesses who are against this bill. So the debate has been going on, contrary to what you are saying. My mind is not set on Bill C-48. I’m hearing and trying to understand this whole debate. So I object to what you just said.
Senator Stewart Olsen: I’m not a member of this committee; I’m replacing another member. I will give you a bit of Senate history, if you don’t mind.
There’s no greater hawk than me on spending. I have to tell you that right now. When I first came to the Senate, Senate committees hardly travelled at all. If they did, they went to more exotic places. We were not well-known to Canadians. One of my personal agenda items and big-deal pushes are for us to become known to Canadians. It’s incredibly important, whether you’re for the bill or against it, the Senate must be seen as an organization that is willing and wanting to listen to people. You can’t do that in Ottawa.
If you want to curtail, I’d probably go to two places in Alberta, or go to the East Coast and see where the tankers run. I think cutting off meeting with Canadians doesn’t do the Senate or the senators any favours at all. Thank you for listening.
Senator Dasko: Well, I am a member of this committee, and one of the things that we have learned is that committees rarely travel on bills. This is what we have been told, very rarely. So this committee has taken a very big step in travelling on this bill.
In contrast to the comments that have been made, we have not curtailed anything. We started out with no travel, then we approved travel to British Columbia and then we approved of travel to Alberta and now we approved of travel to Saskatchewan.
The Chair: Alberta and Saskatchewan were together.
Senator Dasko: Yes. We have gone from no travel to travel to three provinces. So, in fact, we have gone precisely the opposite direction from we have heard from Senator Plett. We have gone from no travel to extensive travel to hear the views of Canadians. I think that we have a very reasonable amendment on the table, and I’m going to support it.
I also want to highlight the fact that we have had very extensive consultations on this bill, and we’re going to continue to have extensive consultations after we return from travel and before we actually come to the conclusion of this process. Thank you.
Senator Boisvenu: It’s on another subject. I’ll clear that one and I’ll be on the second subject.
The Chair: Senator Plett, you’ve already spoken.
Senator Plett: I’ll wait right until the end, that’s fine.
The Chair: Senator Moncion has not yet spoken.
Senator Moncion: I have a question: How many witnesses are you going to hear from in Estevan; do you know yet?
The Chair: We don’t know until we decide that we’re going to go there. Today was the day of the budget. Once the budget is approved, then we’ll actually know where we’re going.
Senator Moncion: The reason for my question is there are 201 kilometres between Regina and Estevan. You could probably easily bring the witnesses to Regina and have a full day in Regina, instead of having a full day in one city and another full day in another city. It’s just a matter of time and of cost.
The Chair: The plan was two days. If you look at the budget, it’s one day in Regina, a half day in Estevan and a full day in Edmonton.
Senator Moncion: Anyway, my comment is if you only have half a day in Estevan, you could probably bring these people to Regina and do the full work in a day, which would eliminate travel to Estevan, which is not a great distance. For people in Saskatchewan, even for us in northern Ontario, it’s normal to travel three to four hours to get to a destination. It’s part of where we live.
The Chair: Normal for them, not for us.
Senator Gagné: I will support the amendment. We are not talking about skipping Saskatchewan. We are proposing to go to Saskatchewan. The idea is to centralize our public hearings in one location, which is certainly not meant to limit debate on Bill C-48. I think the amendment is reasonable.
Senator Cormier: I will also vote in favour of the amendment. Senator Plett mentioned a committee meeting that was held yesterday and spoke about some comments that were made yesterday in another committee, and he seems to be attributing those comments to us. I’m not sure what committee he’s talking about that made these comments, but I’d like to focus on what’s going on here. In no way do I think we’re trying to prevent Canadians from sharing their opinions. I think it’s also reasonable to hear them in Regina. I will therefore vote in favour of this amendment. Thank you.
Senator Plett: Well, in reference to what Senator Cormier just raised about me referring to a different committee, Senator Dasko raised the point of what is normal and what isn’t normal. I don’t want to put words in her mouth, but that committees “rarely,” travel, she said. So that is using other committees as well. I was using it as a general term about what we are doing here. In reference to what Senator Dasko said about rarely travelling, this committee has travelled on legislation in the past. The Finance Committee travelled across the country on legislation. So we clearly have precedence.
Senator Moncion says it’s only two hours. Well, it’s only two hours, it doesn’t matter which direction you drive. If you drive from Regina to Estevan, it is also only two hours, and a bus to Estevan is not unreasonable. But what is being suggesting here is that the people of Estevan aren’t important enough to visit and that they can come see us, which is the argument we’ve been using against people coming to Ottawa.
There is a reason why Estevan was chosen as a destination that should be visited, and Senator Miville-Dechêne agreed to that. Whether she had Senator Dawson’s approval or agreement, she agreed to it, and here we are again wanting to curtail. Colleagues, we’ve had this debate and gone around and around, and finally we have agreement and finally we’re going to do something in a collegial way, and now we’re wanting to prevent people from doing this again.
I agree with what Senator Stewart Olsen said. We should be travelling to the East Coast to see how they do things there. The chair told us how many tankers are travelling around the world on any given day, and we are stopping in one region that devastates three provinces. We are stopping tanker traffic that, quite frankly, isn’t as dangerous as what people are making it out to be. We don’t want to go and talk to the people to hear them, yet we want to say that we are the chamber of sober second thought.
We are curtailing debate. Last week the Leader of the Government brought in a programming motion that would have shut down all debate. Fortunately, we managed to get by that. But that is curtailing debate when we do that, and that’s what this is.
So clearly by the speakers, chair, I think this amendment will pass, but I just hope people in Estevan are listening to this and paying very close attention to people who don’t want to come and see them.
Senator Stewart Olsen: Please remember that the western provinces don’t have as many senators, they also don’t have as many elected MPs. They don’t get the same voice that Ontario, Quebec and many provinces do. I think we should be trying our very best to give them a voice in our government. I think for half a day, this is an odd argument. What you will have to end up doing if you want to hear from everyone is probably extending the Regina hearings for a day and a half. If you don’t want to travel out to Estevan, take that two-hour trip, then you might have to extend your day in Regina. So I’m not sure why the amendment. I don’t understand.
There is a story today that Alberta is going to lose — I don’t know how many more jobs. The West is devastated, and we’re going to have to face that and listen to people. I don’t want to have people think that no one cares what happens in the West. Canola, everything is going wrong for the West right now. I truly believe we do them a great disservice if we don’t at least try to maximize our travel and speak to as many people as possible.
Senator Gagné: I will repeat that we are going to Saskatchewan and we are going to Alberta. It’s a question of having the people from Estevan come to Regina. I think it’s reasonable. I think we’re cognizant of the costs also. I’m from the West; I’m from Manitoba. I have a good idea of what’s going on in my province especially. I think the amendment that has been proposed is reasonable.
Senator Moncion: I’d like to make a comment about something Senator Plett said. The Standing Senate Committee on National Finance travelled for a bill, and the travel took place as part of the pre-study. As for the west, which isn’t doing well —
The Chair: — on a bill.
Senator Moncion: It was on a bill, but it was in prestudy for six months —
The Chair: I know, but it was on a bill.
Senator Moncion: I agree. But it was pre-study, so we go back to that comment.
The other thing is that I understand Senator Stewart Olsen’s comment about the devastation to the oil and gas and the canola industries. We understand that there are problems in the western provinces, and it’s a very important problem economically. The same kind of problems happened across Canada in the wood industry in the years 2008 and 2009 when that industry went belly up in almost every province. And what happened to everyone in these jobs, whether they were truckers or whether they were workers, they found some other way to find jobs. So I’m not saying that it’s not important. I’m saying that these are cyclical situations.
Going back to this committee’s travel, as I was saying before, Estevan is not very far. Then, as you mentioned, the day could be longer and you meet with these people, but they come to you instead of the committee going to them.
Senator Cormier: Mr. Chair, is it confirmed that we will hear from the Honourable Jeremy Harrison, Minister of Trade and Export Development today?
The Chair: Yes, we will.
Senator Cormier: He is from Saskatchewan, he represents the population and he has been elected by the —
Senator Plett: Good idea, let’s ask him what he thinks.
Senator Cormier: We can ask him what he thinks. That’s what I wanted to highlight.
Senator Manning: I think the main thing is that we hear from the people in Saskatchewan. And on Senator Stewart Olsen’s comment, if needed, maybe we should look at extending the hearings in Regina for an extra half a day if the witness list there can’t be accommodated in one day. Our main thing is to hear from our witnesses. Seeing that we have two at the end of the table, I think we should get to it.
The Chair: We’re going to call the question.
Senator Plett: I would like to put a subamendment.
The Chair: Before we go to those votes, just so it’s clear, we have some substitutions today. Before we go to a vote, I want to make sure. Senator Stewart Olsen, who are you replacing?
Senator Stewart Olsen: I’m replacing Senator MacDonald.
The Chair: Senator Moncion, who are you replacing?
Senator Moncion: Senator Simons.
The Chair: Anyone else replacing a senator?
Senator Mégie: I’m replacing Senator Galvez.
The Chair: Okay.
And the subamendment?
Senator Plett: First of all, let me preface that at the end I will vote against this amendment, but I will put a subamendment in that we extend the hearings in Regina for one day to hear the people of Estevan and ask them to come to Regina.
The Chair: Any debate here?
Senator Miville-Dechêne: To be very frank, I think we should wait to see how many witnesses want to come. And I think we’re serious and responsible enough to —
Senator Plett: Obviously we aren’t.
Senator Miville-Dechêne: Well, I think we are. You can speak for yourself, Senator Plett.
Senator Plett: I am.
Senator Miville-Dechêne: I think we should see who wants to come to Regina, and from that point on . . .
Senator Plett: So what’s the bar? Five? Ten? Fifteen?
Senator Miville-Dechêne: We can vote on your subamendment. It’s just that we have witnesses and it’s 9:25. I think the debate is very clear. We have said that we want to go to Alberta, we want to go to Saskatchewan, hear the people from Western provinces and hear their concerns. You want to go to Newfoundland, to wherever, you want to cross Canada from one place to another.
Senator Plett: Chair, I didn’t ask for that.
The Chair: Senators, we have witnesses.
All in favour of Senator Plett’s subamendment raise your hands. Okay. That’s five. All opposed? Six. Okay. Now we’re back to the amendment.
So a voice vote. Would you call the vote? All those in favour of the amendment that we scrap Estevan?
Senator Miville-Dechêne: Could you please read the amendment?
Senator Gagné: Chair, out of respect, could you please read the amendment?
The Chair: Read it for the record then, Senator Miville-Dechêne.
Senator Miville-Dechêne: Obviously I object to the way you portrayed my amendment. I don’t think it was fair.
The Chair: Okay. Let’s put it in finer language then, Senator Miville-Dechêne.
Senator Miville-Dechêne: I propose that the budget be amended to only include public hearings in Edmonton and Regina and that the Subcommittee on Agenda and Procedure be empowered to approve the final version of the budget.
Senator Manning: I know there’s translation, but could you read it in English also?
Senator Miville-Dechêne: Certainly, I will do that for you.
Senator Manning: Thank you.
Senator Miville-Dechêne: I move:
That the budget be amended to only include public hearings in Edmonton and Regina;
And that the Subcommittee on Agenda and Procedure be empowered to approve the final version of the budget.
Joëlle Nadeau, Clerk of the Committee: The Honourable Senator Tkachuk?
Senator Tkachuk: I vote opposed.
Ms. Nadeau: The Honourable Senator Boisvenu?
Senator Boisvenu: Against.
Ms. Nadeau: The Honourable Senator Cormier?
Senator Cormier: For.
Ms. Nadeau: The Honourable Senator Dasko?
Senator Dasko: In favour.
Ms. Nadeau: The Honourable Senator Gagné?
Senator Gagné: In favour.
Ms. Nadeau: The Honourable Senator Manning?
Senator Manning: Opposed.
Ms. Nadeau: The Honourable Senator Mégie?
Senator Mégie: For.
Ms. Nadeau: The Honourable Senator Miville-Dechêne?
Senator Miville-Dechêne: For.
Ms. Nadeau: The Honourable Senator Moncion?
Senator Moncion: For.
Ms. Nadeau: The Honourable Senator Plett?
Senator Plett: No.
Ms. Nadeau: The Honourable Senator Stewart Olsen?
Senator Stewart Olsen: Opposed.
Ms. Nadeau: Yeas, 6; nays, 5.
The Chair: We’re now back to the main motion, which is the budget.
Senator Manning: Could I make a motion that if the witness list deems it necessary that the hearings be extended in Regina for an extra half a day or a day, whatever is necessary?
The Chair: Okay.
Any debate? All in favour of that?
Hon. Senators: Agreed.
The Chair: Are we all agreed?
So we’re good on the budget because the final version has to be approved by — don’t we have to pass the budget?
Ms. Nadeau: The motion gives the power for steering to approve the budget.
The Chair: If that’s okay. I don’t know how we do that now because we’re going to have to add on just in case we have an extra night.
Ms. Nadeau: It’s already included.
The Chair: Because of Estevan.
Senator Manning: The funding is okay.
The Chair: We’ve got just as much money.
Senator Boisvenu: Mr. Chair, I don’t often travel with committees. It’s happened perhaps one or two times in 10 years. I’m wondering how many staff members travel, compared to the number of senators.
I find that the number of staff members is high. I’m not denigrating their work, but the number of staff members compared to the number of senators is very high. I’ve travelled in a group of 12 senators and five staff members and it was good. Furthermore, I don’t think that 12 senators will make the trip. It would probably be seven or eight senators, since some have said that they would not participate. I think that the proportion of staff members to senators is a bit off.
The Chair: Senator Boisvenu, could we delay this discussion until we finish today? We have witnesses here who have already been waiting for a half hour. We will hear the witnesses, and after the premier finish at 11:30 we can have a short discussion on staff.
Today we will continue our Bill C-48, An Act respecting the regulation of vessels that transport crude oil or persistent oil to or from ports or marine installations located along British Columbia’s north coast.
Before we begin, I want to apologize but we had this business to do. I hope you found it at least a little interesting as we went along here. I have before us Gavin Smith, Staff Lawyer, West Coast Environmental Law Association; and Sonia Simard, Director, Legislative and Environmental Affairs, Shipping Federation of Canada. She is replacing Mr. Broad, who is not well today and that’s why she is here with us. Thank you for attending.
Gavin Smith, Staff Lawyer, West Coast Environmental Law Association: Thank you for the opportunity to appear and speak in support of Bill C-48. Given the time, I will focus my submissions on an account of the historical context for the B.C. north coast oil tanker moratorium dating back to the 1970s. I do so because Bill C-48 is about protecting a remote and ecologically important place from the introduction of a risk that does not exist there currently, namely bulk crude oil tanker traffic. Yet the absence of bulk crude oil tanker traffic is not due to a lack of proposals or potential development in the north coast region in the last 50 years.
To fully appreciate the impetus for Bill C-48 it is important to understand the unique history of the B.C. north coast and the sustained efforts from people to keep the area free from crude oil tankers.
I will begin with the Trans-Alaska Pipeline system that was advanced in the late 1960s following the discovery of oil in Prudhoe Bay, Alaska. The potential routes of those proposed crude oil tankers became an issue of major provincial and national concern in Canada.
For example, in 1970, the House of Commons had a special committee look into the matter of crude oil tanker traffic which, in 1971, after holding hearings, recommended that Canada oppose crude oil tanker traffic in the region due to the environmental risks involved. In the same year, the B.C. legislature unanimously passed a motion opposed to crude oil tanker traffic in the region.
The federal government followed by making informal policy moratorium announcements in the region. In 1972, the House of Commons unanimously passed a motion stating that such crude oil tanker traffic would be inimical to the interests of Canada and urging the federal government to bring that matter to the attention of the United States. Now, of course, the Trans-Alaska Pipeline system was constructed, approved by the United States after that time and built. What Canada endeavoured to do was to ensure that those crude oil tankers were as far away as possible from the B.C. coast in order to protect the region.
In 1977, when those oil tankers began their transits from Valdez, there was a routing system put in place by the U.S. Coast Guard. There are federal officials on record stating that that routing system, which was to keep tankers in excess of 100 miles west of Haida Gwaii, was the result of an agreement between the U.S. and Canadian governments.
Those routes were quite unpopular with the tanker industry due to the costs involved. In 1982, they were abandoned by the U.S. Coast Guard, which again caused Canada to enter into negotiations through the Canadian Coast Guard to seek to keep oil tankers at a safe distance from the region, which eventually resulted in the Voluntary Tanker Exclusion Zone that’s now in place.
However, the Trans-Alaska project was not the only proposed crude oil tanker project in the B.C. north coast region at the time. In 1976, Kitimat Oil Pipe Line Ltd. proposed a deep-sea oil port in Kitimat to import oil from the United States, as well as Indonesia and other international locations. The federal government’s response was to launch a federal inquiry under the federal Inquiries Act, which held hearings in British Columbia and issued a Statement of Proceedings in 1978. I will briefly quote from that, because I think it captures what was going on at the time. Commissioner Andrew Thompson stated:
Despite my familiarity with this history of determined opposition to tanker traffic, I have been surprised to find it so universal. In my preliminary meetings throughout the province and in the formal and community hearings of the Inquiry held to date, the oil port proposals have inspired few advocates other than the proponent companies themselves.
The federal government’s response following the release of the Statement of Proceedings was to make a policy announcement that they would not permit the Kitimat oil port project to proceed.
The other piece of history I wanted to highlight was the B.C. offshore petroleum exploration and development moratorium. In 1972, the same year that the House of Commons made its motion in opposition to tanker traffic, the federal government implemented a moratorium on petroleum exploration and development in the B.C. north coast region, initially by way of orders in council which suspended existing exploratory permits in the region and then, following the eventual expiry of those orders in council, that moratorium has been maintained by policy ever since.
There were two occasions when Canada considered lifting that offshore petroleum development moratorium. The first was in the 1980s, when Canada and B.C. were in negotiations for a Pacific accord on offshore petroleum development, similar to Atlantic provinces at the time. There were two very high-profile oil spills that affected the West Coast at that time, namely the Nestucca oil barge spill, which resulted in bunker C oil impacting the B.C. coast, as well as, of course, the Exxon Valdez. In response to the impacts of those spills and the public concerns, both the B.C. and federal governments elected to maintain the offshore development moratorium.
In the early 2000s, a new provincial government requested that the federal government consider lifting that development moratorium. After a process of consideration, the federal government ultimately elected to maintain the petroleum development moratorium offshore the coast of B.C. It is worth noting that one of the things that Canada did as part of its process there was to establish a federal public review panel, which held hearings in British Columbia and concluded in its report in 2004 that 75 per cent of British Columbians wanted to maintain the offshore petroleum development moratorium.
The next step in the history is the Enbridge Northern Gateway proposal, which I won’t dwell on as I suspect it is more familiar to senators, except to note that efforts to legislate the crude oil tanker moratorium on the north coast really picked up during that time in response to Northern Gateway, including six private members’ bills put forward between 2008 and 2014 to legislate an oil tanker ban on the north coast, as well as a majority motion passed in 2010 in the House of Commons calling for such legislation.
This historic context is important because it demonstrates that the federal government has repeatedly made and upheld policy decisions to keep crude oil tankers out of the region, regardless of where that oil was from, and to prohibit development of B.C. offshore petroleum resources to protect those same waters. This is in response to the sustained work of north coast residents and other British Columbians and Canadians, emphasizing their view that too much is at stake to warrant the risk. We submit that Bill C-48 reflects the unique history of the B.C. north coast, and we support its enactment.
The Chair: Thank you.
Sonia Simard, Director, Legislative and Environmental Affairs, Shipping Federation of Canada: Good morning, members of the committee. My name is Sonia Simard and I am here today on behalf of Shipping Federation of Canada, which is the voice of owners, operators and agents of deep-sea vessels that carry Canada’s imports and exports.
The ships represented by our members load and discharge all kinds of cargo, including oil, at ports across the country: on the West Coast, on the Atlantic, the St. Lawrence River and the Great Lakes. Our association’s mandate is to contribute to the policy discussion on the safe and efficient transportation of goods through Canadian waters.
Given the foregoing, we would like to bring to the committee’s attention a previous technical assessment made by Transport Canada — namely, the TERMPOL Review Process on the Northern Gateway project.
During this technical analysis, Transport Canada and the Canadian Coast Guard assessed the safety of shipping routes in the Hecate Strait, considering the size of tankers, traffic density and environmental factors. The result of that study led Transport Canada to say:
. . . the proposed shipping routes are appropriate for the tankers that would load and unload at the proposed terminal. . . .
. . . the proposed routes provide the clearances and allowances required for good vessel manoeuvrability. . . .
And allowances for very large crude oil tankers to safely navigate.
In other words, Transport Canada’s own assessment indicated that the existing regulatory regime, combined with the implementation of enhanced safety measures, would support the safe movement of oil through the northern coast of B.C.
From our side, we are not aware of any new evidence-based risk assessment that has led Transport Canada to modify its earlier safety assessment. Having said that, we would like to be very clear that we are not here today in front of the committee to support one specific oil project or another. We would like to urge the committee to ensure that any discussion on prohibiting tanker operation off the north coast of British Columbia is evidence-based.
Tankers have a strong safety record. Sixty per cent of the world’s crude oil is transported by tankers. Internationally, the number of large spills has steadily decreased over the last 50 years. More than 2.8 billion tonnes of oil move each year, and 93 per cent of that quantity safely reaches its destination.
In Canada, more than 280 million tonnes of oil and petroleum products move in and out of ports on the East Coast. That is, Come by Chance, Port Hawkesbury, Saint John, Montreal and Quebec. There are navigational challenges in the Atlantic and the St. Lawrence River. For example, there are the high tides in the Bay of Fundy and ice navigation in the Gulf and the St. Lawrence River for several months of the year. Yet there is a framework in place that supports the safe movement of oil through these Canadian waterways.
We recognize that no industrial activity is free of risk and that the identification of acceptable risk levels is a public policy decision. However, we believe that this decision must be rooted in comprehensive and detailed evidence regarding navigational safety. In our opinion, that part is missing right now.
Transport Canada has also stated that the spill response capacity that currently exists on B.C.’s north coast is not as strong as in other areas of Canada, and for that reason we should implement a moratorium. From our perspective, we would expect that the ongoing initiatives by Transport Canada and the Western Canada Marine Response Corporation, known as WCRMC, in developing what is called area response-based plans for the north coast would address this issue. In fact, a few weeks ago, this committee heard from a representative of the WCRMC who stated that it is possible to deploy additional response capacity along the north coast of B.C.
In addition to the issues outlined above, the implementation of a tanker moratorium has raised questions under international law. We believe that the government has attempted to circumvent possible conflict with freedom of navigation under international law by crafting its moratorium as a prohibition on loading, unloading or anchoring, rather than prohibition on the passage of the tankers per se. This is, in our respectful opinion, the equivalent of using the back door for doing what is not possible to do through the front door.
In this respect, we would note that international law enables coastal states to designate particularly sensitive sea areas in which a country can apply stricter measures, such as routing requirements, after having completed an informed risk assessment process. In our view, any discussion on imposing conditions on the movement of tankers on the north coast should take place in that context, including the consideration of specific shipping corridors. We thank you for the opportunity to provide comments on Bill C-48.
The Chair: Thank you, Ms. Simard. I will ask the minister from Saskatchewan if he would agree to go until maybe 10 after. That will give us 50 minutes with him before the premier. We will have a little more time.
Senators, if you could keep your questions snappy and try not to have a long prelude to them, that would be great.
Senator Miville-Dechêne: Thank you both for your testimony.
Mr. Smith, it is always difficult to assess if citizens are for or against a particular project. Was there any referendum or plebiscite done in the past in northern B.C. that could give us some indication?
Since you’ve been following this particular file for years, has there been some effort made to designate that particular pristine coast as on the international scene as a place that we should not develop?
Mr. Smith: In response to the first question regarding a plebiscite, the City of Kitimat, during the Northern Gateway proposal, held a referendum for its citizens. About 58 or 59 per cent of Kitimat residents voted that they did not want the crude oil tanker project in that city. There have been letters sent by most local governments in the region, including City of the Prince Rupert, Terrace, Smithers and regional districts such as the Skeena-Queen Charlotte Regional District, opposing crude oil tanker traffic in the region and/or supporting Bill C-48.
With regard to your second question, I would note that there is also an important marine planning initiative that’s happened in the region, initially through the Pacific North Coast Integrated Management Area, or PNCIMA, called the Marine Plan Partnership for the North Pacific Coast, or MaPP. It is a partnership with the B.C. government and Indigenous nations. At one point it did not include the federal government, but there have been efforts to do marine planning on the coast to protect those unique values.
Senator Miville-Dechêne: Anything else? UNESCO has wonderful programs to protect sites.
Mr. Smith: I’m not sure, off the top of my head, regarding a UNESCO heritage designation.
Senator Stewart Olsen: I am from New Brunswick. I think the Bay of Fundy is a resource that we all treasure on our coast, and yet we allow tanker traffic. We have the Fundy Biosphere Reserve, and we allow tanker traffic. Regarding Quebec, I’ve lived in Sept-Iles so I know that tanker traffic runs up and down the St. Lawrence, which is a treasure in this whole country.
Mr. Smith, I’m not sure why one part of the country is more treasured than another. Why is it more important there than where I live, where Quebecers live or the Great Lakes? We are part of the federal government and this is a national initiative. Why is it more important?
Mr. Smith: To start, Bill C-48 is not about saying, in my understanding of it, that the north coast is it more important than other areas of Canada, which are certainly important as well.
I would flag a couple of things. Because of the unique history of that area, there is not currently crude oil tanker traffic in the region. So this is about preventing the introduction of a risk that does not currently exist.
Further, I would flag that Canada first enacted an oil tanker moratorium on the East Coast, a smaller moratorium, in Head Harbour, New Brunswick, in response to a refinery proposed in Maine at that time. In 1982, I believe Oil Carriage Limitation Regulations were passed under the Canada Shipping Act and were eventually repealed after that proposal was abandoned. So there have been efforts to do that on the East Coast as well.
Senator Gagné: I had two questions, and one was answered by Mr. Smith. My second question is for Madam Simard.
Ms. Simard, a witness who appeared last week, whose name escapes me, said that, for all intents and purposes, it would be safer for the region if we gave the tankers access to a port, especially in the Prince Rupert area, since the distance between the coast and the ocean is fairly small, about 30 kilometres.
We also heard that we could allow tankers through and still conduct a risk assessment to deal with potential incidents. This risk assessment could protect the region from all sorts of different vessels that operate in the area. Could you comment on this, since you mentioned the possibility of a corridor?
Ms. Simard: Whether it’s this corridor or another one, it’s important to conduct a risk assessment and an assessment of risk reduction measures. We’re talking about distance to the coast, but there are other potential risk reduction measures, with the use of the Maritime Information System, or MIS, used in Canada for piloting and escorting. There are different measures for safe transportation on top of the ones connected to physical distance from the coast. We believe it’s important to take this into account in the study of Bill C-48.
Senator Gagné: Thank you.
Senator Plett: I have three quick questions, and if you can make the answers equally brief I will get all of these in.
What’s the average size of a tanker now travelling this route? The moratorium is for tankers 12,500 tonnes or more. What’s the average-sized tanker going through there? Do either of you have the answer to that?
Ms. Simard: I don’t have the exact average size, but actually there are no deep-sea tankers right now. Those are tug-and-barge. And we are talking about traffic on the Hecate Strait?
Senator Plett: I guess I’m getting to the point that if the ships going through there carry 12,450 tonnes, they would be legal to go through. I’m wondering how much of a restriction would that be.
Ms. Simard: I see your question. I would have to revert because those would be domestic tankers. We don’t have that information. We represent deep-sea vessels, and they are not deep-sea vessels. Vessels below that threshold that are currently navigating the coast serve the domestic market. I will have to return with that information.
Senator Plett: If you could, I would appreciate it.
Ms. Simard: I will.
Senator Plett: Could either of you tell me what is the most dangerous oil-shipping route in Canada right now? Surely it’s not this route? What is the most dangerous route for shipping oil in Canada?
Ms. Simard: I’m not a mariner, so I don’t have an answer for the most dangerous route. We have 280 million tonnes of oil moving safely each year. I don’t have an assessment of the most dangerous route in Canada.
Senator Plett: Probably somewhere close to Newfoundland and Labrador might be a little more difficult than to move oil than in British Columbia?
Ms. Simard: Maybe each of them will present different challenges, such as tides and ice.
Senator Plett: I believe the Exxon Valdez was raised this morning, and I apologize it if it wasn’t. It has been raised a number of times as a reason. The minister gave us that as one of the reasons why this is so dangerous, and yet Alaska has not slowed down any of their oil shipping as a result of that. They’ve rather corrected problems and made things safer. Do you have any comment on that? Why are we constantly using Exxon Valdez as the reason for the tanker moratorium? Maybe you are not the people to answer the question, but I would like a comment.
Mr. Smith: I can offer a brief comment. It is important in terms of demonstrating the impacts of those types of spills and what could be at risk in the north coast area.
Senator Plett: But not the danger?
Mr. Smith: I’m not sure I understand the question.
Senator Plett: You said the impact of a spill but not the danger of a spill. Again I think it might be more dangerous to ship oil there than it is where we are talking.
Mr. Smith: I’m not sure I am qualified to speak to the relative dangers between the two places, but I think the reference to the Exxon Valdez has been in regard to the significance of the impacts it had on ecosystems.
Senator Plett: Thank you.
Senator Boisvenu: Mr. Smith, can you talk about your organization’s funding?
Mr. Smith: Sure. I’m glad to have an opportunity to speak to the question. There are a couple of replies I would make. To directly answer the question, West Coast Environmental Law Association’s sustaining funding partner since 1974 has been the Law Foundation of British Columbia. We do seek and obtain funding from other sources, including private citizen donations and bequests, fee-for-service arrangements for clients and so on.
Senator Boisvenu: Do you receiving funding from the Bullitt Foundation in Seattle, the Gordon and Betty Moore Foundation in California, or the Oak Foundation in the United States, which advocates for opposing all pipeline construction?
Mr. Smith: The West Coast Environmental Law Association — I was going to get to — also accepts and seeks funding from foundations; American foundations as well as Canadian.
The second comment I would like to make, particularly as a person born and raised in British Columbia who comes to this work really out of a genuine concern for the lands and waters of the region, I am somewhat troubled by the questions around funding —
Senator Boisvenu: I understand that, but my question was about your funding.
Since you receive a lot of funding from the Americans, including the Oak Foundation, I believe, which opposes the construction of all pipelines, do you not think that by opposing absolutely every proposed pipeline towards western Canada you’re working on behalf of the Americans, who absolutely do not want Canadian oil being sent to Asia? By sending oil to Asia, we would get 30 per cent more revenue, and the Americans would be forced to pay the world price of oil instead of paying 30 per cent less. By opposing the pipeline like this, are you not working on behalf of the Americans, who are opposed to Canadian oil being sold anywhere other than the United States?
Mr. Smith: No, I’m absolutely not doing work on behalf of American organizations. I work for West Coast Environmental Law Association, which has the objective of strengthening and enforcing Canada’s environmental laws and providing legal information and resources to citizens.
Senator Boisvenu: However, your organization is funded by American organizations. I understand that you’re doing your job, but since your organization is funded by American organizations, you have to consider their environmental agendas, right?
Mr. Smith: In response to the question, I think part of what I find troubling as well is that industry organizations that come to speak before the Senate are also receiving funding. From the transcripts that I have reviewed, I have not heard questions being asked about their funding.
Senator Boisvenu: My question wasn’t answered. Thank you very much.
Mr. Smith: If I could finish, I have not heard questions to them about their funding. Funding in a global marketplace is coming to industry organizations as well from international sources. That’s not in any way a disrespect. That’s the nature of the world we live in. Ecosystems don’t respect boundaries either. I think people around the world are rightly concerned about unique ecosystems and species that exist in Canada.
I work on behalf of West Coast Environmental Law Association to further the objectives of that organization. As I mentioned, our sustaining funding partner since 1974 has been the Law Foundation of British Columbia.
The Chair: Who is the West Coast Environmental Law Association? Who belongs to it?
Mr. Smith: West Coast Environmental Law Association is a group of lawyers who were actually founded in 1974 by a group of law students at the University of British Columbia. The 1977 West Coast Oil Ports Inquiry that I mentioned, West Coast legal counsel appeared before that at the time, and we have been involved since then in advocating to strengthen and apply environmental laws.
The Chair: How many lawyers belong to it?
Mr. Smith: I believe there are 10 lawyers.
The Chair: So how many staffers do you have?
Mr. Smith: I would say approximately 20, but I don’t know.
The Chair: So you have 20 staffers and 10 members?
Mr. Smith: No, we have 20 staff members, within which there are 10 lawyers.
The Chair: How many members belong to the West Coast Environmental Law Association? How many members do you have in your association?
Mr. Smith: I see, I understand. We will typically do client-based work for First Nations or others. We are not a membership-based organization in that sense. We do work for clients who are seeking to protect lands and waters that they care about as well work to advocate for strong environmental —
The Chair: So you are actually like a law office.
Mr. Smith: In a sense, yes.
The Chair: You’re not a West Coast environmental association; you’re a law office that does work for environmental groups?
Mr. Smith: We are a law organization that seeks to strengthen and apply Canada’s environmental laws, yes.
The Chair: I’m going to just ask another question in regard to what Senator Boisvenu asked. What percentage of money do you get from foreign groups? What percentage of your total budget is made up of foreign donations?
Mr. Smith: I do not, off the top of my head, know the answer to that question.
The Chair: Would you forward it to us?
Mr. Smith: I know we publish our funding information in annual reports, and I’m happy to forward that information.
The Chair: You work there? You’re a staff lawyer?
Mr. Smith: I’m a staff lawyer for West Coast Environmental Law.
Senator Stewart Olsen: Just a clarification, although Senator Tkachuk has clarified a lot for me.
Do you not see that as a conflict of interest? Environmental law is a litigator’s dream. So a bunch of lawyers get together, they form an association and call themselves an environmental association for environmental law. I have trouble getting my head around that. I would think that is a conflict of interest for you, to then come and testify against certain things. I just don’t understand it.
Mr. Smith: The purpose of the work that we do is to advocate for stronger environmental laws. So in that context, that’s why I’m appearing to speak in support of Bill C-48. I don’t see that as a conflict.
Senator Stewart Olsen: Thank you.
Senator Manning: Just very quickly, I have an answer to what Senator Plett asked. In 1990, the Brander-Smith report, which was in response to the disaster of the Exxon Valdez, recognized that Placentia Bay in Newfoundland and Labrador was the most likely place in Canada for an oil spill. We have 365 islands in Placentia Bay, and I know them pretty well because I live in Placentia Bay. We have, on average, 200 days of fog a year. We have the Whiffen Head oil storage facility, the Marine Atlantic ferry terminal, fish processing operations, 1,000 fishing vessels, a nickel-processing plant served by oil carriers and, as I said, we’re well-known as the foggiest place in Canada. From the point of view of dealing with visits or tanker traffic, that’s why a few weeks ago I asked that the committee to travel to Newfoundland to learn because I sit down every day looking at oil tankers going back and forth.
Mr. Smith, you touched on the fact that you are concerned for the land and the water. Being from Newfoundland and Labrador and surrounded by water, I’m concerned with the land and water as well, but I am also concerned with the economy of Canada.
My understanding — I may be wrong, and that’s why I’m asking the question — is that there is already traffic that comes from Alaska and passes through this area. Is that the case? We can’t stop another country from doing that, from what I understand. But my understanding is that there is already a fair amount of traffic in that area. Is that the case?
Mr. Smith: So with regard specifically to crude oil tankers, the tankers that are transiting from Valdez, Alaska are observing the Voluntary Tanker Exclusion Zone, which was negotiated initially on an interim basis in 1985 and then formalized in 1988.
Senator Manning: In Placentia Bay we have a corridor that tankers travel through. They are brought through with pilot vessels at a certain point, and they’re brought through with tugs as they get closer to the oil storage facility.
In the conversations that you’ve had with the groups in your area, would it be possible to establish a corridor where tankers could travel through and be escorted with the protection of the environment and water as a priority instead of completely shutting out any traffic? In many places in the world — I’m sure even in places off New Brunswick and the Bay of Fundy — tankers don’t go in like someone behind the wheel of the car and run all over the place. They have a corridor to travel through. That seems, to me, to be a middle ground where we could meet so that we could provide the economic activity that’s needed. Is that something that your association would entertain or consider?
Mr. Smith: I would say that the objective of Bill C-48 is to prevent the introduction of a risk to the area. I’m not sure if these submissions have been made to the Senate committee yet, but I know at the House of Commons committee witnesses such as Raincoast Conservation spoke about the interconnection of the waters in the area with the land and so on. I think any potential risks that would exist in that corridor would stand to impact the rest of the region. For that reason, we don’t feel that a corridor is appropriate.
Senator Manning: Again, I’m just trying to find a middle ground. Wouldn’t there be risk wherever we have a tanker moving oil in the world and around Canada? Wouldn’t there be risk? We all take risks. I’ll take a risk when I get on a plane to go to Newfoundland tomorrow night. We take risks every day. Wouldn’t there be risks? I don’t know. I just find it difficult that we can’t find a middle ground.
Mr. Smith: I would certainly agree that there is risk, and I think part of what Bill C-48 is about is a public policy decision that that risk, in that particular area, based on what is at stake, is not something that was considered to be appropriate, and we’re supportive of that.
The Chair: With that, I’m going to wrap it up. Thank you very much, Mr. Smith and Ms. Simard, for your testimony.
For our second panel this morning, we’re pleased to welcome, from the Government of Saskatchewan, the Honourable Jeremy Harrison, Minister of Trade and Export Development. Mr. Harrison was a member of Parliament from Saskatchewan from 2004 to 2006 and now represents the wonderful constituency of Meadow Lake, Saskatchewan. Thank you for participating.
Hon. Jeremy Harrison, Minister of Trade and Export Development, Government of Saskatchewan: Thank you very much, Mr. Chair, I appreciate it. Thank you to the committee for the invitation to be here today. There are a lot of friends around the table whom I’ve had the chance to work with and serve with in different capacities over nearly 20 years in public life now, which is almost frightening to reflect upon. It’s great to be here and speaking on this subject, which is a very important one. It’s an honour to be here on behalf of Premier Scott Moe and the Government of Saskatchewan.
I would like to take a few moments to offer our perspective on Bill C-48, the potential consequences of the bill and what it will mean for our province and our nation.
I can assure you that the province of Saskatchewan has a critical stake in the conversation surrounding Bill C-48, and I would encourage this committee — I would encourage senators — to make the trek out to Saskatchewan. I can offer the support and assistance of our government in arranging tours and opportunities to receive input from different communities around the province, whether that be places like Weyburn, Kindersley, Estevan or Lloydminster. There are many communities where there would be value in having the committee visit.
This is important for us, and we’re in a position where we would be significantly and negatively impacted by Bill C-48 if it’s to go forward.
Almost 3 per cent of Canadians call our province home, yet we account for 36 per cent of the entire country’s primary energy production. Our provincial resource sectors are led by mining and oil and gas, which in 2017 generated a combined real GDP by industry of $13 billion. That is 21 per cent of Saskatchewan’s total 2017 real GDP by industry.
These resource sectors clearly comprise a fundamental part of our economic base. Saskatchewan’s oil and gas industry, however, is our province’s biggest economic engine. It attracts billions of dollars in investment and is a major reason for our overall economic prosperity and enviable quality of life.
Oil and gas production alone is responsible for an estimated 15 per cent of Saskatchewan’s GDP. We produced nearly 500,000 barrels of oil a day in 2018, which makes us the sixth-largest onshore oil producing jurisdiction in Canada and the United States. We account for about 12 per cent of Canada’s crude oil production.
Part of the reason behind these figures is that Saskatchewan is a jurisdiction of choice for investment by the industry. Industry sources frequently identify Saskatchewan as having an exceedingly attractive investment climate. Our province is home to some of the best and most cost-effective conventional oil and gas opportunities you will find anywhere. In fact, when we talk to audiences around the world about the investment opportunities in Saskatchewan, we’re often talking about oil and gas and development.
Bill C-48 places this in jeopardy, and does so in several ways. First, Bill C-48 is a departure from evidence-based decision-making regarding safety. It ignores the impressive performance and capability of Canada’s marine regulation and spill-response regime. It is an asset this country can legitimately be proud of.
There is no evidence to justify a tanker ban based on Canada’s history of oil tanker safety, which is an exemplary record. There are about 20,000 oil tanker movements per year in Canadian waters. No major spill incidents — defined as involving 7,000 tonnes or more — have occurred in almost 20 years, and the last incident was in 2000.
The fact is that Canadian and global statistics both show a downward trend in the volume and frequency of tanker-related oil spills. That is the sort of evidence that our policy rationale should take into consideration and be based upon, not false evidence or no evidence.
Second, the tanker ban proposed by Bill C-48 unjustly denies Western Canada’s oil producers access to tidewater. Bill C-48 only serves to make an already bad situation worse. Increased market access for our petroleum industry is urgently needed. Without that new capacity, the subsequent economic impacts and environmental risks are unequivocal. This includes record demand for oil transportation by rail: We will have nearly 300,000 barrels of oil on rail per day in the near future. That, in turn, increases logistical challenges and costs for not only our Western Canadian oil producers, but for all other rail-dependent industries such as mining and agriculture.
This is not just an infrastructure deficit, it is a self-inflicted one. It is throttling an industry that is one of the cornerstones of our provincial and national economy. It is one that is costing Canadians over $15 billion annually in lost petroleum revenues. It leaves us at the mercy of a fluctuating price differential in the world market — a differential which has been very significant in the near past. It robs us of the ability to fund our other provincial priorities. We cannot afford to let it continue.
Third, this bill prevents the world from meeting its growing energy needs using some of the most responsibly produced oil in the world. Canada ranks among the world’s top oil-producing countries when it comes to positive ethics and practices applied by the industry. These are values such as environmental stewardship, transparency, accountability, security of supply, safety and human rights. In today’s global marketplace we believe that can and does count for something.
Only about one quarter of the world’s oil comes from jurisdictions that value the kind of best practices the industry upholds here in Canada. Yet there is an irony here. Countries like Canada, whose petroleum industry occupies the highest ground of free-market competitiveness and regulatory excellence in the world, are where efforts to cripple that industry are most intensive. Bill C-48 exemplifies such efforts.
The federal government could have chosen instead to address the risk of oil spills by scaling up its existing regulatory and response practices, which are already robust. They include mandatory inspection of all tankers to ensure double-hull technology is used, the required use of local pilots to navigate vessels into and out of Canadian ports, the use of tugboat escorts through constricted areas, continuous aerial monitoring for spills and emergency preparedness and response systems based on manpower, boats and spill-containment tools. Our collective time and efforts would arguably be much more wisely focused on reinforcing any of these areas of service and expertise.
Fourth, there is a lack of justification for the tanker ban proposed in Bill C-48. Canada has more than 243,000 kilometres of coastline. Tankers routinely transport about 80 million tonnes of oil per year through these coastal waters.
Supporters of the ban point to oil and petroleum products being the largest commodity handled at Canadian ports by volume. It adds up to 80,000 tonnes per year, or 20 per cent of total tonnage. However, oil tanker movements represent a very small share of maritime traffic. They account for less than 1 per cent of West Coast vessel departures and arrivals. To be precise, we are talking about 1,487 out of 200,000 per year.
There is no precedent for a tanker ban of this kind in Canada. A similar ban does not exist, nor has one been considered for any other Canadian coastlines. This includes the St. Lawrence Seaway, New Brunswick, Newfoundland and Labrador and Vancouver — all areas where oil tankers routinely operate today.
Fifth, Bill C-48 would be yet another blow to key strategic investments in Canada’s regional and national economic growth. The Eagle Spirit Energy corridor and its associated pipeline is one such investment. It is a project supported by dozens of First Nations along its proposed route to B.C.’s northern coast. The route covers 1,500 kilometres for a $16 billion pipeline to carry medium and heavy crude from Fort McMurray, Alberta, to the Grassy Point port near Prince Rupert, B.C.
Eagle Spirit is an alternative to the Northern Gateway project cancelled by the federal government and the long-delayed Trans Mountain expansion. It is an alternative that is desperately needed to address the unique — and in some cases deliberate — market barriers facing our national petroleum industry. Bill C-48 would kill this project and needlessly put an end to a major opportunity for Indigenous economic development.
Sixth, and finally, this bill flies in the face of our efforts in Saskatchewan to encourage and enable the responsible, sustainable, long-term growth of our petroleum industry.
We have significant potential and capacity for such growth in our province. Saskatchewan’s initial conventional oil in place is estimated at 56 billion barrels, and about 12 per cent of that can be commercially recovered with current technology. That means that we need to be able to establish new ways to recover the remaining oil. We are making great progress with new drilling and completion technologies, and also with enhanced oil recovery research. Therefore, we have placed a high priority on developing innovative ways to recover that remaining oil.
In Saskatchewan, we don’t focus on searching for new oil using old ideas. We prefer to make old oil accessible with new ideas. That is where the real opportunities are. New technologies are being developed to unlock more of the province’s energy riches from the ground.
The Government of Saskatchewan is proud to be recognized as a world leader on carbon capture, utilization and storage. We have stored more than 30 million tonnes of carbon dioxide in deep geological formations and oil fields in our province. Among other things, this enables the continued use of fossil fuels while meeting our emissions targets and providing energy security.
We recently announced a methane reduction plan to reduce greenhouse gas emissions from venting and flaring in our upstream oil and gas sector. The target is a reduction of 4.5 million tonnes per year by 2025. These were developed in consultation with industry. This plan will help us achieve our climate change goals while providing industry with the flexibility to implement those reductions in an effective and economically viable way.
Billions of dollars of revenues and royalties are generated in our province every year from combined resource industry activity and exports.
Resource development chiefly in the oil and gas sector will always have a meaningful role in the economic future of Saskatchewan and, by extension, the world. That future is being created right now by the policies we are designing to encourage economic growth. Our innovative and competitive resource development companies, and the many communities that rely on them, are well positioned to meet that future.
These are some of the toughest and most entrepreneurial companies you will find anywhere. For our part in government, we are doing our best to enable their continued activity by maintaining and reinforcing a stable royalty structure in Saskatchewan, supported by clear, responsible government policies. We place a high priority on collaboration with our stakeholders in the province. Most importantly, we value and appreciate the contributions made by the oil and gas industry to our quality of life and the opportunities it provides to us and future generations.
We recently saw a huge rally in Regina, nearly 2,000 in attendance and the longest truck convoy in history. There were over 700 trucks in the convoy. This is an industry that constantly adapts and evolves to meet the challenges of today and positions itself for tomorrow.
We have done our best to support this industry in our province and will continue to do so. In many ways, it comes down to listening and collaborating with our partners and stakeholders. It means having a clear and honest understanding of the interdependent and integrated nature of the energy industry that we all share. Our collective future depends on it.
Canada is the only country in the world that cannot export its oil beyond the boundaries of its own continent. We are effectively hamstringing our ability to fulfil our economic potential — a potential that would allow us to engage in the kind of nation building that Canadians need and deserve.
We in government at every level are accountable for making responsible decisions that will enable us to achieve that potential and meet these expectations. For all of these reasons, Bill C-48 simply cannot and must not proceed.
Thank you very much.
The Chair: Thank you, Minister Harrison.
Senator Plett: Minister, thank you for being here.
In Saskatchewan, it’s a positive thing when you have 2,000 trucks in a convoy. They’re called racist when they come to Ottawa. That’s unfortunate.
I promised Senator Cormier I will ask you a question, so that’s the first one, and I think you were in the gallery when I suggested that.
Minister, many of us would like to visit the areas that will be most devastated by this horrible legislation. Clearly all of Saskatchewan will be devastated, all of Alberta and probably all of British Columbia and, indeed, all of Canada. Some of us would like to travel to Estevan, but not all. Tell me why we should come to Estevan and what you will do for us.
Mr. Harrison: I appreciate that question. We would very much encourage the committee to go to Estevan. We would encourage you to go not only to Estevan but to other communities in the province to see first-hand the impacts that have resulted due to the policies of the national government that have had a very detrimental impact on the energy sector already. This bill, along with Bill C-69, is going to continue to have and create very negative impacts, some of which I laid out in my opening comments.
This impacts real people in the real world who are having a very challenging and difficult time directly because of policy choices made by the Government of Canada. I would very much encourage members of Parliament, both in the Senate and the House of Commons, to take the opportunity to go and talk to these people, who are good people, hard-working people. Some of these people were accused of the same thing for attending the rally in Regina last week as well. These are good people who work hard, and I encourage you to go and talk to them.
Senator Plett: Thank you, minister. My next question deals with rail transportation. You touched on it briefly. Manitoba is not impacted in the same way as Saskatchewan and Alberta in regard to the oil shipments. We certainly have oil there.
We are impacted equally when CP and CN won’t haul our grain. As you know, minister, we dealt with this a few years ago in the Rail Safety Act and in others, and CN and CP deny that they are using the amount of oil that they’re hauling against the farmers. However, it’s evident that they are.
Can you touch briefly on what that does to your province, the province of Alberta and my province, the province of Manitoba, when CP and CN are using the most dangerous method of hauling oil and are not able to haul the grains to port that we so desperately need to get out of our province? How does this impact not only the oil industry but the agricultural industry as well?
Mr. Harrison: It’s a very good question. It’s absolutely the case, the fact that we’ve seen tremendous orders of magnitude increases in the volume of oil on the rails over the course of the last 10 or 15 years. There’s a direct reason for that. The reason is we can’t get pipelines built in this country. That’s the reason. There is a direct connection.
Oil is going to move one way or the other. It’s moving by rail. We’re going to end up with nearly 300,000 barrels a day on the rails, which means there’s going to be a displacement of other commodities that would otherwise have been on the rail in that amount. That has an impact on agriculture that is very significant, and we saw that a number of years ago. We were very grateful to the national government at that point for moving in an assertive and decisive way in addressing volumes for agricultural movement. That was something we appreciated.
To the credit of the national rail companies, there have been investments made to increase capacity and “de-bottleneck” certain areas of the system which have led to the ability to increase the overall volume on rail. Without question there is an impact when you have the volume of oil moving by rail on the agricultural sector, on potash and on the forestry sector as well, which is an important thing for my area of the province. All of these things are occurring directly because we, as a country, can’t get a pipeline built.
I had the honour of representing my province in Singapore and Asia a couple of weeks ago, and it’s remarkable the reaction from ministers in other countries who just can’t wrap their heads around how in Canada we have this tremendous resource wealth, yet somehow we can’t get our commodities to market. It’s incomprehensible. The explanation for how we can’t get any of this done makes it even more incomprehensible.
We, as a province, have been highly frustrated and vocal about making sure we can get a pipeline built. I’m in favour of all the above: Northern Gateway, Keystone XL and Energy East. We need to have the capacity on the pipes, which is by far the safest way of moving energy, as you referenced, senator, in your question.
Rail is probably the most challenging, high-risk way of moving energy there is. Pipelines are by far the safest, yet because of policy choices, again by the Government of Canada, we’re not able to move production of energy by pipeline.
Senator Cormier: Welcome to the Senate of Canada, minister. You’ve heard the very good news that the committee will be travelling to Saskatchewan very soon and that we’ll be happy to hear from the people of Estevan in Regina. Our resolution was quite interesting. We want to hear from Saskatchewaners.
You’re certainly aware of the two amendments that the Government of Alberta proposed in its brief. I’ll read them quickly, and I quote:
Amend the proposed Oil Tanker Moratorium Act to require a science-based assessment to set the proposed schedule of prohibited substances.
Amend the proposed Oil Tanker Moratorium Act to redefine the area protected from oil tankers based on scientific and socio-economic criteria that is subject to periodic review.
What is the Government of Saskatchewan’s position on these proposed amendments? Would your government accept a Bill C-48 that includes some compromises, such as the ones proposed by the Government of Alberta?
Mr. Harrison: I have not had a chance to review the amendments proposed by the Government of Alberta, but we are of the view that Bill C-48 is not a necessary piece of legislation. We are not supportive of the bill, whether it is amended or not. The specifics of the proposal from the Government of Alberta, we have not reviewed at this point.
Senator Cormier: Thank you.
Senator Boisvenu: Welcome, Minister Harrison. My first question is about statistics. What percentage of your oil is sold to Americans as opposed to Canadians?
Mr. Harrison: I don’t have the exact stat in front of me, but a relatively high proportion of our production would be sold into the United States market. There is a whole host of reasons for that, but the way the energy infrastructure system is set up a lot of our oil would go into the U.S. system and down through “Refinery Row” in the United States. As a result of that, we’ve had a substantial impact on the differential. I spoke about that a bit, but I won’t get into it. However, because of the overall capacity issue in the entire system, all of this adds up to the massive discount that we were getting, which was extraordinary up until to a few months ago.
Senator Boisvenu: Your province is also hampered by the price of oil. The Americans buy oil 30 per cent cheaper than market price, but once the oil is refined, they resell it to the international market. The Americans are exploiting your province.
Mr. Harrison: That’s absolutely true.
Senator Boisvenu: Has Mr. Trudeau’s federal government been in contact with your province regarding this bill? Has your province shared its concerns? Were you listened to?
Mr. Harrison: We were not consulted at the ministerial level. I have never, but one of my counterparts had an indication that this was coming. There may have been some pro forma communication at the officials’ level. I’m not aware of that occurring, though, either. So, no, we were not consulted at the political level, most definitely.
I think we’ve been pretty clear in terms of our view of what this bill will do and what impact this bill will have on the province. We’ve communicated that both publicly and formally in the context of direct communication with our counterparts. Again, this is another example of federal policy that has been put forward without due consideration of the impact on particular areas of the country, along with Bill C-69 which we are highly concerned with as well. I think my colleague spoke about that fairly recently at a house committee.
All of this adds up, though, along with a number of other federal initiatives, including a carbon tax and things like clean fuel standard — all of the layering on of highly prescriptive regulation on the energy sector imposed on us by the federal government — to making it very challenging for our industry to compete globally. That is something we are deeply concerned about.
Senator Gagné: Thank you for your testimony. I believe that there are risks not only for Saskatchewan and Alberta but also for the rest of Canada if we don’t get the oil to market. I realize that. All of the communities on the West Coast also face risks if they lose their livelihoods.
Some groups discussed the risk of an oil spill as a matter of “when” rather than “if” it will happen. In your opinion, what is the adequate level of risk with respect to the movement of oil by sea?
Mr. Harrison: The observation I would offer is the safest way of moving oil and energy products is via pipeline. We’ve had a number of derailments over the course of the last year in our province. That’s not something just specific to Saskatchewan. This happens with rail transportation because it is a much less reliable, safe way of transporting energy. Our communities are being put at risk because we can’t move energy by pipeline to the coast.
As far as the balance of what is the appropriate degree of risk with regard to seaborne transportation of energy products — I think I spoke to that in some detail in my submission — obviously we are landlocked province. We don’t have a coast. We don’t have government departments that are responsible for coastal protection. Our view is that the degree of risk, which has existed now, as it is, for a long time, is an acceptable one. There have not been significant spills of oil for some period of time.
I’m not minimizing the fact that there is risk. There is risk in everything. I think Senator Manning made that point on the last round. There is risk associated with everything. Our submission is that the degree risk associated with seaborne transportation is an acceptable one.
Senator Stewart Olsen: Thank you for being with us today. Further to Senator Boisvenu’s question about consultation, I will share something with you. We had Minister McKenna, Minister of Environment and Climate Change, before us the other day in Question Period. She made a statement that was quite denigrating to Conservative premiers. I was shocked because as a federal minister you are obligated to work with provinces, no matter the political stripe, be they NDP or Conservative.
Could you elaborate a bit more? I come from New Brunswick. It is a have-not province. I have always admired Saskatchewan. It used to be have-not for many years and pulled itself up based on natural resources.
I’m kind of shocked that the government did not seem to understand that a tanker ban or this bill in B.C. would affect so many provinces in the rest of Canada. Could you elaborate on that? I don’t understand the “no consultation.”
Mr. Harrison: Well, we’ve gotten used to it. I will speak bluntly. This is our view, and we’ve said this publicly before. We’ve been highly concerned about the direction this government has taken with regard to energy policy, which has taken little to no consideration of Western Canadian interests into account.
I didn’t look this morning, but with the world price of oil at a historically relatively healthy level, we should have our energy sector in Western Canada right now creating thousands and thousands of jobs. We should. We’ve been relatively fortunate in Saskatchewan in that we have maintained job growth through this, in spite of all the headwinds federally.
Alberta, our next-door neighbour, which is slightly more dependent on the energy sector as a proportion of their population, has lost 130,000 or 140,000 jobs over of the last few years because of federal policy.
Policy matters; it really does. The fact that at one point we were getting less than $11 for a barrel of oil produced literally meant that you could go to Hardisty, Alberta, and if you paid somebody five dollars they would take that barrel of oil off your hands. You were not even making a profit on any of this. You were paying to put this into the pipe. This is a direct result of federal decisions and federal policies that have had a devastating impact. When we layer on Bill C-48 and Bill C-69, we will never have another major energy infrastructure project built in the country.
All of this adds up to a concerted campaign to land lock our resource in Western Canada, aided and abetted by the Government of Canada. There is a reason why 2,000 people are showing up to rallies in Regina with 700-truck convoys who have never been to a protest in their life before. There is a reason this is happening.
I don’t think Minister McKenna gets that. I don’t think the Prime Minister gets that. I don’t think there is an understanding in the federal cabinet of the impact this is having on real people in Western Canada who just want to go to work. Part of the reason I am here is to express that.
Senator Stewart Olsen: Thank you, sir.
Senator Dasko: Thank you, for coming here today, minister. I have a couple points of clarification from the comments you have made. With Northern Gateway, was there any Saskatchewan resource being transported from that project?
Mr. Harrison: There would have been perhaps a minimal amount. The issue, though, is not so much the resource in the pipe but the capacity in the system which lowers the differential. That’s what the issue is. We would have had the differential close to almost the world price by having that additional capacity online —
Senator Dasko: I hear you. Excuse me —
The Chair: Let him finish his answer and then you can ask another question
Senator Dasko: My question is the same. Was there any Saskatchewan resource in Northern Gateway?
Mr. Harrison: There would have been an amount, yes.
Senator Dasko: What about Eagle Spirit? Was there any Saskatchewan resource in that project?
Mr. Harrison: It would depend on a whole number of factors whether there would or wouldn’t be. It would be dependent on the day as well. The way this works, there is a high degree of company-specific decisions that would have an impact as far their contracts for who is transporting what.
Senator Dasko: Was there any Saskatchewan resource in Trans Mountain?
Mr. Harrison: There would be, yes.
Senator Dasko: You are placing a lot of weight of the problems in the industry on Bill C-48 specifically. Can you name a specific project, based on a Saskatchewan resource, that was planned to go ahead with the terminus on this particular coast that is affected by Bill C-48?
Mr. Harrison: The issue — and I tried to express that through my opening comments and some of the responses — is that Bill C-48 is part of a much bigger problem here —
Senator Dasko: Yes, I know. I am asking specifically about Bill C-48 —
Mr. Harrison: And Bill C-48 is a significant issue because —
Senator Dasko: Excuse me, minister, I am asking specifically about Bill C-48. You have made many statements here about the larger issues. I am asking specifically about this bill.
The Chair: Senator Dasko, let him answer the question and then you can ask him another one.
Senator Dasko: Mr. Chair, he is not actually answering it.
The Chair: That’s for senators here to decide.
Minister Harrison, just answer the question and then Senator Dakso can ask another one.
Senator Miville-Dechêne: Senator Boisvenu was also pressing a witness, so it happens. I think she is trying to get a specific answer.
Senator Stewart Olsen: You can press, but let him answer.
The Chair: I apologize, Minister Harrison. You’ve been in this before, so go ahead.
Mr. Harrison: I am one of the few ministers who enjoy Question Period. I enjoyed during my time here in opposition and I enjoy answering questions in Question Period back home. The reality is that we have a layering on of a whole number of federal measures that have had a very significant impact on the energy sector.
I don’t think that’s in dispute. I would hope it is not in dispute, because there are literally hundreds of thousands of people out of work because of it. That’s the reality.
Bill C-48 is part of the bigger issue of land locking our energy resource on which we were getting $11 a barrel only a few months ago, because of a number of things. There are forward-looking issues as well, that we will never be able to get our resource to market. Bill C-48 is a big part of that, and C-69 is a big part of that. A layering on of highly prescriptive federal regulation is a significant part of that in the immediate term. A carbon tax is part of that as well. You add this all up and what it means, for our treasury in the province, is $300 million a year. For Alberta, it is billions.
Senator Dasko: Minister, excuse me —
Mr. Harrison: That means we can’t put investment into things like health care and education and, despite that, we’ve managed to balance our budget.
Senator Dasko: I am asking about the name of a specific project, taking the Saskatchewan resource, with a terminus specifically in the area of this coast. That’s’ all I’m asking. I understand that you see this as part of a larger picture. We are here to talk about Bill C-48.
Mr. Harrison: What are you getting at by “specific project”? Like an individual well being drilled or not? That’s not how it works in the energy sector.
Senator Dasko: You were the one who raised the names of specific projects. I am raising the name of a specific project. Was there a Saskatchewan project delivering the Saskatchewan resource to the particular coast that will be stopped by this bill?
Mr. Harrison: Are you asking if there are wells that are not being drilled that would be drilled if we had a competitive —
Senator Dasko: No, I’m asking about a specific project.
Mr. Harrison: What do you mean by that? Is a specific project a single well?
Senator Dasko: You named specific projects, and I am asking for names of other ones.
Mr. Harrison: I named pipeline projects.
Senator Dasko: Yes.
Mr. Harrison: We said we would like them all to be built, because if all of them were built we would have a significantly larger amount of investment in the energy sector, wells drilled and people at work in Saskatchewan.
Senator Dasko: You made a statement that your reserves cannot move to the coast. How about the south coast?
Mr. Harrison: A large portion of it goes to the south coast right now. The senator made a good point that we are getting a massive discount for that resource because of the fact that there is not the capacity in the system to get the world price. So that’s exactly the point. We are getting a $30-plus discount, and that’s basically being collected in profits by energy refiners in the United States.
Senator Dasko: So the Saskatchewan resource right now is going to the south coast?
Mr. Harrison: There would be a proportion of it that is. A proportion of it goes elsewhere. I can tell you where none of it goes, which is Eastern Canada. None of it goes there because we can’t get Energy East built.
Senator Dasko: But we are talking about Bill C-48 here. Thank you very much.
Senator Miville-Dechêne: Minister, I’ll ask my question in French, if I may.
I listened to you carefully while trying to understand. There are currently no tankers operating in northern British Columbia. There is, however, a rather broad social consensus in this region that there should not be any tankers.
This matter affects 60 per cent of the British Columbia coast. The remaining 40 per cent of the British Columbia coast is inhabited, and tankers are allowed to operate in this region. This region does not have the same environmental characteristics as northern British Columbia, which is undeveloped and is one of the rare places in which the environment has remained intact.
I fully understand that you feel trapped, imprisoned, because you don’t have a coast. However, despite the problems in southern British Columbia and the problems with Trans Mountain, why not use the southern part of the province to get your oil out?
Lastly, why do you want to ignore or disregard the rather strong social consensus in northern British Columbia, which is to keep the environment as is?
Mr. Harrison: I appreciate the question. Thank you for that. You know, one of the references of moving oil through southern British Columbia in the question, I wish we could. I wish we could. I understand Premier Notley will be testifying after me, and I think she will probably have some comments on that as well. We’ve seen little progress on Trans Mountain. I would have to be convinced that there is a genuine willingness and desire on the part of the current national government to move ahead with this project, despite what they’ve said publicly. We’ve seen little evidence of that.
Senator Miville-Dechêne: Why not concentrate your efforts in the south of B.C.? You understand that there is a qualitative difference between the north, which is not developed and where there are no tankers, and the south, where there is already traffic. I’m wondering why this is not taken into consideration in your remarks.
Mr. Harrison: Our position, and I’ve said it before, is we’ve taken an “all of the above” approach to moving energy. Northern Gateway, Trans Mountain, Energy East, Keystone XL — we have taken an “all of the above” approach to supporting these energy projects.
There is a national interest in all of this as well. That’s what we’ve encouraged the federal government to look at. Our view and submission is that the national interest is served by having the ability to move our energy from a number of different points.
Senator Miville-Dechêne: Exactly, but the national —
Mr. Harrison: That would include Prince Rupert, as an example.
Senator Miville-Dechêne: Interest has to be balanced with regional consideration and what people think in those regions. Do they exist for you? Do those communities have a say?
Mr. Harrison: I can make the same argument. What about our communities that don’t want 300,000 barrels of oil rolling through their communities on the rail?
Senator Miville-Dechêne: You could make that argument. They do it, but they are at the end of the pipeline.
Mr. Harrison: There are a lot of folks would say that if we did not have to have that, we would prefer not to. But there is a national interest served because of the fact that that’s the only way to move energy right now.
It is the role of the federal government to determine what the national interest is. We make our submissions as a province on what we think the national interest is, which is an “all of the above” approach to moving energy. The national government has made a policy choice with Bill C-48, which is specific to that one area. This isn’t national, which is an interesting policy rationale in how you differentiate the two. We disagree with the position of the national government.
Senator McCoy: Thank you. In reference to the earlier tête-à-tête here, I used to be in government, too. We always called it Question Period, not answer period. Ministers get adept at fielding the questions.
I heard you say that you believe the risk of transporting oil by sea is acceptable, and I wanted to go back to get a little more clarification on that. You didn’t link it to an earlier statement you had made whereby you were talking about a whole lot of precautions, such as tugs, escorts or pilots who know the waters. I would like to give you the opportunity to say, when you talk about risk, would you be talking about risk as fully minimized as one could do on a world-class level?
Mr. Harrison: Thank you very much, Senator McCoy, for the question. It is a good one. That is precisely what we would assert. We should have the very best safety precaution standards and training that can possibly be had. I think that there has been significant work put in already to ensure that our maritime navigation standards are some of the best you will find anywhere. We would submit that having these standards, and even looking at enhanced standards if that’s deemed appropriate, would be an appropriate course of action.
Senator McCoy: We know that there are upwards of 3,000 ships plying these waters now on a regular basis and that, in fact, they are all under the weight limit of 12,500 gross tonnes. There have been three spills since 2006. The minister himself recognized that this is the most poorly protected coastline in Canada. Do you think that this committee should be concerned and making recommendations to increase the protection of this area of Canada?
Mr. Harrison: Right. Well, far be it from me to give the committee advice or direction, but I think it would be appropriate to provide recommendations on how that maritime safety can be improved without having a complete prohibition on transportation.
The Chair: Thank you very much, Minister Harrison. We appreciated your testimony.
I’m pleased to welcome our final panel this morning. It’s amazing, considering there’s an election going on, that you have the time. We really appreciate it. From the Government of Alberta, we have the Honourable Rachel Notley, Premier of Alberta. Thank you for participating today. The floor is yours.
Hon. Rachel Notley, Premier of Alberta, Government of Alberta: Thank you very much, and good morning, senators. I am coming to you today from Calgary, on the traditional territory of the signatories to Treaty 7, where the Metis people also share a very deep connection with the land.
It is an honour to be able to present to you all today. I want to begin by thanking your committee for heeding my call to come to Alberta to consult on Bill C-48. I believe that is absolutely the right thing to do. Alberta absolutely needs to be part of this discussion, as it has an incredible impact on us. It is a very important issue, and that is why I am presenting to you today as well.
I’m here to talk about the future of our energy industry and the horribly misguided West Coast tanker ban, Bill C-48. I’ve brought three friends along with me today. I’m pleased to introduce to you Angela Allen, Edward Pena and Roger Auriti. They work in the energy industry.
Why are they with me? There are two reasons. First, I want the whole committee there to be able to look them in the eye. They are not numbers on a page; they are your fellow Canadians, and the decisions you make will affect them. Second, as you mentioned at the outset, we are in Alberta in an election, and this election is about these people — Angela, Edward, Roger and millions of Albertans just like them. The election is about their jobs, their future and making sure Alberta works for them.
Why is this election about their jobs? We have gone through a historic downturn here in Alberta, one that has taken a very big toll on working people. We need Ottawa to work for Alberta on pipelines, on energy policy and on the basic task of listening to these people, the very people who power this great country.
Canada is blessed, as you know, with an extremely valuable natural resource, a resource that is in demand across the world and that helped build this country and has improved the well-being of every Canadian. That resource is pulled from the ground by women and men who make good, family-supporting wages. Those wages are spent in cities and towns across Canada, strong communities where working people can build good, secure lives.
From those wages, we’re also able to fund important things like schools and hospitals, things that connect us and give us hope for the future. That resource is also being pulled from the ground in a stable democracy, where rights are respected and where we take our responsibilities to the environment seriously. I value this, and the people here with me today do too.
We need to defend the things that make Canada the best place on earth to live, work and raise a family, and fight for an Alberta and Canada that actually works for everyone.
I am a little worried these days that much of what we value as Canadians is at risk. You may have noticed that Albertans are not the biggest fans of Ottawa these days. That’s the G-rated way to put it. If you want to know why, one of the things we can do is look no further than Bill C-48, the so-called tanker ban, stretching from the northern tip of Vancouver Island, all the way to Alaska.
In the time I have, I want to give you three very clear reasons why this bill needs to be rejected. First, it’s bad for jobs and investment, plain and simple. Second, it’s not a tanker ban; it’s an Alberta ban. Let’s stop suggesting otherwise. Third, if you continue to push policies that single out provinces in their impact the way this one does, it is a policy that is effectively very divisive. It is the kind of policy that, as we say in Alberta, represents little more than what we often characterize as a “stampede of stupid.” Ultimately, you’re going to hurt our country and our sense of unity. Those are the stakes.
Let’s just start, first, with jobs. The world has changed. We can no longer count on simply selling our resources to one market: the Americans. They are our biggest customer and competitor. Everyone here on this committee has heard me and many others say that many times. Our lack of pipelines not only means we can’t sell abroad; it means we can barely move what we produce now. It means we cannot move our resources, and it means there is less work for Angela, Edward, Roger and hundreds of thousands of other people.
That’s one reason why I’m getting our oil out now through rail. It’s not something we should be doing but something we have to do, because we have to move our product — 120,000 barrels a day. The rail deal we have put in place will keep folks working to some degree until Ottawa gets the pipeline mess sorted out, but it is not a long-term solution and should not be a long-term solution. Pipelines are the solution, and not just one pipeline. We need Line 3, Keystone XL and the Trans Mountain expansion all operational to get our economy back on track and bring back the good jobs that my friends here depend upon.
While TMX is on track — and I’ll speak more to that in a moment — KXL and Line 3 are moving through the American legal system. Bill C-48 essentially makes us hostage to their fortune. We shouldn’t be creating a blanket ban on potential projects in the West when projects aimed south aren’t yet cleared of roadblocks. It makes no sense.
To be fair, it was roughly a year ago this week that we compelled Ottawa to buy Trans Mountain when investors pulled out. For that, we thank them. We do. It is a very significant step forward. It kept the project alive. At the end of the day, that one gesture is not enough and is not going to support our industry as a whole. It is part of the solution, but it is not the whole solution — not even close. We need people in Ottawa to essentially back these workers, not block them.
That brings me to my second point: There is a glaring double standard at the heart of this law. Bill C-48 is an Alberta ban, as I said, not a tanker ban. After all, Bill C-48 still lets massive LNG tankers travel those waters. So it’s not really a tanker ban at all. It’s a ban on energy resources produced in Alberta, by Canadians, from getting to overseas markets.
But let me also be clear: These products will go overseas. If Ottawa bans the north coast tankers, American investors will move our product by rail to Alaska. We’ll lose jobs, we’ll take a discount on our products and the same waters you’re trying to protect will still be affected because you have no ability to stop the U.S. from going through those waters.
Once again, we will make American shareholders rich while Albertans lose out. As I said before, it’s a stampede of stupid. We just need to be more strategic.
Now, the list of banned products outlined on Bill C-48 also go well beyond what they need to. It includes partially upgraded bitumen, light crude oil, synthetic crude oil and a number of lighter hydrocarbons. Again, we don’t have a rational connection between the alleged objective of the tanker ban and the actual vehicle and the mechanism with respect to what’s in this legislation.
Now, right now — and this is important — Alberta is taking major steps to upgrade and refine our resources. In fact, it is part of a historic effort to diversify our economy, the largest of its kind since the days of Premier Lougheed.
One important component of this work, partial upgrading, takes more carbon out of the barrel, which is a good thing, and also refines the product in a way that would impact how it would react in water. It’s an incredibly important project. It’s an incredibly important investment for our economy, and it will mean more revenue for our resources and fewer overall emissions, except that the way Bill C-48 is constructed now, it makes it almost impossible for us to attract investment — or at least investment that is focused on a quicker way out of the country.
Bill C-48 is a disincentive to the very kind of investment that we need to attract to Alberta to refine our products, keep more jobs here, take carbon out of the barrel and make our products safer to ship. These are all the kinds of things that we should be trying to do as strategic players in the energy industry. Yet we have Bill C-48 in its current construction, which at the very outset tells investors not to even bother. This makes no sense.
So the blunt tool is basically not connected to science in any way. Bill C-48, in its current form, is a very blunt tool that removes investment interest and removes any incentive to innovate technology, either in the patch or in shipping. It just makes no sense.
At the end of the day, what we need is for you to not block us but instead to back us here in Alberta. With LNG you’re not blocking what they do; you’re backing what they do. With Hibernia off the coast of Newfoundland, you’re not blocking what they do; you’re backing what they do. With crude tankers in the St. Lawrence Seaway, you’re not blocking what they do; you’re backing what they do.
In Alberta all we’re asking for is the same treatment for the same products on two different coasts, because right now there is a clear inconsistency between the way we are treating product on the East Coast versus the way we are treating product on the West Coast.
In short, we need to end this double standard. We need to treat all Canadians equally. Don’t block us. Back us.
Finally, if you continue to block us instead of backing us, if you continue with the double standards which are embedded in Bill C-48, you’re going to hurt the entire country. We need to keep Canada working. This is time for nation building, for facing the rest of the world united and determined, confident in who we are as Canadians and confident in the incredible skills and training of people like Angela, Edward and Roger.
No country produces its energy resources as safely and with the attention to the climate as we do here in Alberta. Our shipping record is the same: Safe and environmentally responsible. Let’s show the world that we are an energy superpower, a climate leader and a model for how to defend jobs and address the real challenges of a warming world.
While we’re at it, let’s show all Canadians that we can grow our economy and fight climate change. Let’s show Canadians we can defend working people and defend the high quality of our hospitals and schools. Let’s show Canadians that 90,000 jobs in downtown Calgary are just as important as 90,000 jobs in downtown Montreal.
I’m going to keep fighting for all Albertans to build pipelines and diversify our economy, to build up our hospitals and schools and to make sure Alberta works for everyone. I invite Ottawa to join us. Don’t block us. Back us. Toss Bill C-48 in the garbage where it belongs.
Finally, in closing, to Albertans like my friends Angela, Edward and Roger, thank you for everything you do each and every day to build our province and our industry.
I’m happy to take questions at this point if you have any.
The Chair: Thank you very much, Premier Notley, and I’m happy to report that we’re going to be travelling the first week in May to the city of Edmonton.
Senator Cormier: Good morning, premier. I’ll ask my question in French. I want to tell you that I’m from New Brunswick, and there are lots of workers from New Brunswick contributing to Alberta’s oil industry. Many workers from back home are in your province. I read the brief you submitted to our committee on March 18, 2019, with great interest.
First of all, in the brief, you said that there was no inclusive, thoughtful consultation by the federal government. However, in a letter you sent to Minister Garneau on November 9, 2017, you mentioned consultations carried out by the Government of Alberta, which include several meetings with the federal government between March and April 2016. I’d like to know which consultation did not happen.
Second of all, in the first amendment you proposed, you said that if the bill passes, the schedule should not include the substances currently prohibited and should be amended and filled in after a real consultation with Albertans. If the bill is passed with an empty schedule—and there’s almost nothing in it—I’d like to know what studies you used. When you talk about prohibited substances, you refer to some studies led by Natural Resources Canada showing that diluted bitumen behaves similarly to conventional crude oils in marine environments. What studies was this based on, and may we have access to these studies? Thank you.
Ms. Notley: Thank you. I think, if I’ve got it correct, you’ve got essentially three questions there. You’re asking about consultation, amendments and studies. Is that roughly correct?
Senator Cormier: Exactly.
Ms. Notley: In terms of consultations, there is no question that our officials did engage with federal government officials as Bill C-48 was being deliberated on, and certainly our minister did engage once or twice there as well. But I think it’s fair to say that we didn’t actually experience that there was any kind of movement in response to what we said. Nor was there any accommodation of the significant concerns we were raising. It was very much at an official level before we had a real sense of what was going to ultimately find its way into the legislation.
Certainly, in terms of having an understanding about the impact on a larger level within the energy industry with other officials — I mean, at the end of the day this has gargantuan impact on Alberta. When it all comes together what this effectively is doing is saying that we will not allow products from Alberta’s oil sands to be shipped off the north coast. That is where the vast majority of Canada’s oil and gas activity is occurring.
The definition of what would be included in the schedule right now would exclude from exportation off the north coast products that are just “Okilly Dokilly” on the East Coast, but for some reason we’ve decided here in Alberta we can’t ship it off the West Coast. Then, of course, we are all very familiar with the troubles Alberta has been experiencing in getting its products from Alberta to the central or eastern parts of this country for other reasons.
Because of that, then, because the consultation is so significant to Alberta, it’s not enough for there to have been some conversations between public officials within ministries. There should be very significant consultation with municipal leaders, with industry leaders, with worker leaders, with communities far and wide. This, in essence, takes an exceptionally aggressive step against our ability to internationally export product from the Alberta oil sands at anything close to a fair price. That is why we’re saying it’s not adequate.
Indigenous leaders are the other groups that have not been fully consulted. There’s a multiplicity of Indigenous groups that are interested in engaging in economic and industrial activity as it relates to moving our product west, and they have not been significantly included in this. That’s what we need in terms of consultation. It is just not there.
The impact of this bill is so great that the occasional conversations between public officials just don’t come close to the kind of consultation that should have occurred.
In terms of the amendments, let me say it’s quite true that the amendments we propose would, in essence, make the bill almost empty, which is why really what we’re saying is just stop the bill at this point. We need to have a much larger understanding of what the consequences are to the overall future of Canada’s energy industry.
As you’re aware, we have had to take the economically ridiculous step of curtailing production in Alberta because we don’t have enough capacity to move our product, and that is keeping it well under the emissions cap, but we still don’t have the capacity to move our product. That is a massive anti-economic step that we have had to take, because over a decade we’ve had this slow car crash coming towards us where we’ve lost the ability to move our product.
We are currently waiting on three pipelines: Trans Mountain, we all know where that stands; and the two that are subject to U.S. regulatory approaches. If we don’t get those, then this situation that I am describing will last for a long time, and people’s jobs are going to be affected in the long term.
The Government of Alberta is investing in rail. We all know rail doesn’t make sense in the long term, but that’s what we are forced to do. That’s why I’m saying that the significance of this bill is huge for the future of our industry. We don’t actually think that there is any room for it with any amendment at this point.
The Chair: Okay. Can I —
Ms. Notley: The final question you had — you had one last one.
The Chair: Premier, I have to go on because we don’t have a lot of time. Those studies that he asked you about, maybe if you can forward them to the clerk.
Ms. Notley: No problem at all.
The Chair: That took up a lot of time. We have four questioners left. Keep it short.
Senator Boisvenu: Premier, welcome to the Senate via video conference. I appreciate the work you are doing for Albertans and all Canadians. There are many Quebecers working in your province.
Apparently, oil-related activities will be prohibited on 60 per cent of British Columbia’s coast, but if you also exclude the western coast of Vancouver Island, which is very difficult to develop, nearly 95 per cent of the coast will be excluded. The government is proposing directing all pipelines to the Port of Vancouver, which would be the only place that terminals could be built. Is this proposed solution viable for your industry, and is it realistic with respect to transporting oil from both Alberta and Saskatchewan?
Ms. Notley: We all know the challenges we’ve had just to get the TMX pipeline built. We think we’re closer than we have ever been, but it’s been going on forever, and that by itself will not be adequate.
The other thing about going through Prince Rupert is that with respect to some markets, it actually cuts a day off of the shipping time. It gives the product that we have in Alberta and Saskatchewan an advantage over product that would be coming from other places further south in the U.S. For once in a blue moon, we could actually find ourselves with a geographic advantage as opposed to a disadvantage, which is what has been part of what has driven the discount that Canadians have had to struggle with pretty much all along.
I think the ban as it stands right now, again, the way it’s constructed does not take into account the unique nature of different points along the West Coast in terms of the ability to safely move product. Again, the ban is a very blunt tool. At this point what I’m talking about is the geography of it, not the substance of what’s being banned but also the geography over which the ban applies.
We need to consider whether there is a more refined or precise approach that we can take that would allow us to benefit from the advantage that we would have by being able to ship off the northwest coast with the appropriate marine safety standards, of course, being in place.
The Chair: Thank you.
Senator Miville-Dechêne: Thank you, premier, for your very strong presentation. I would like to hear you on the will of the vast majority of Indigenous tribes in coastal B.C. that do not want this extra risk. You said that for the moment foreign tankers could be in that zone, but they are not. They are respecting the exclusion zone, so there are no tankers circulating along the shores of northern B.C. right now.
Obviously this is a difficult and controversial bill. What about those Aboriginal tribes that are on the coast and could be impacted by a spill? It’s not possible to have zero risk when you have circulation. What about them? I see you’re with workers, and I empathize with them. This is not an easy bill.
Ms. Notley: Absolutely. By no means do I ever want to say that those things aren’t important issues. That’s, of course, why we need to focus on the matter of safety and on how we ensure safety.
There are many dangerous things that are shipped at any given time. We could talk about what could happen to forests if there’s a natural gas leak. We’re picking a particular product here and the risk associated with this product. When you look scientifically in terms of the actual odds, the history, what the consequences are and the nature of the product being banned, and you compare it to other products where things are happening all the time, whether on the West Coast, the East Coast or anywhere else, we have targeted this particular product with a set of standards that is way out of whack in terms of the standards that are applied to many other activities and products that impact these communities and others.
We need to have a common set of rules that are applied, a common level of understanding of acceptable risk and a common level of effort made to mitigate that risk, because that’s what fairness is. You don’t pick and choose because we happened to notice this particular industry recently, but we’re just going to look the other way with respect to the other kinds of risks and hazards that we accept each and every day. That’s why we’re saying we need to go back to the drawing board, look at the science and the evidence and dig in as to how we can balance those interests and protect those communities rather than using this kind of blunt tool, which stands to significantly kill one of the single most productive industries that the nation presently enjoys the benefits of.
Senator Miville-Dechêne: Can I have a small —
The Chair: We are running out of time.
Senator Miville-Dechêne: You are in politics. You know this was Mr. Trudeau’s promise to many of the tribes on the north coast of B.C. What about those tribes who are seeing that as a gesture of reconciliation and don’t want any risks?
Ms. Notley: There are also a number of tribes between Fort McMurray and the coast who also, as a gesture of reconciliation, would have liked to have been consulted and would like to enjoy the economic benefits that come from this industry. As with all Canadians, Indigenous people don’t come to this with a uniform position. Reconciliation involves listening to all of them, not just some of them.
Senator Manning: Welcome, Premier Notley. Being from Newfoundland and Labrador, I am fully aware of the contributions of Alberta to our country. As a matter of fact, I spent my seventeenth and eighteenth year in Fort McMurray. Many of my family members are still there. I am also fully aware of Alberta’s contribution per capita to Canada’s equalization program and that my province and others have benefited from that. I will ask a couple of quick questions together.
When Minister of Transport Marc Garneau appeared before our committee, he identified the persistence of crude oil as one of the reasons this product was targeted over others, like LNG. Do the risks associated with persistent products differ from those associated with non-persistent products? If so, to what extent? I think many people have a problem understanding why we can stop one product from being shipped while we allow another.
Also, could you talk about product moving from Alberta south versus moving product west or east, the discount on the oil prices and what that is doing to the jobs in Alberta and in Canada generally? I know we have an avenue, but it is not the best avenue. How can we improve that? I will throw that all out at one time and wish you luck.
Ms. Notley: I will try to be brief in my response. Obviously there is a big difference between LNG and crude oil, but when you get to crude oil it is not as simple as the legislation would suggest. That is that all crude oil cannot be managed safely in the unlikely event of a spill. Crude oil is very diverse within that category. You already have synthetic crude oil going up and down the St. Lawrence Seaway. You already have light crude oil going off the East Coast. Yet these products have been banned from going west.
That’s where our point is. We need to dig in on the science and on what the strategies are to change the nature of the product so that it is safer to ship and also understand that this bill proposes to ban products that are safer than others. That’s the first thing.
Second, in terms of the impact of having to go south, it’s twofold. Obviously, when there is enough pipe capacity to go south, there is still a discount and Canadians pay for that discount. What is happening right now, though, is that we have a shortage of capacity. So the discount was so outrageous — we were getting about $8 a barrel at one point; the discount was over $40 last fall — that we’ve actually now curtailed production. That makes no sense. You don’t stop producing a thing that gives value to your nation as a whole.
We don’t want to have to curtail production for any length of time. We need to keep our options open. Two of the three pipelines that we need to be successful right now are subject to regulatory processes over which we have no agency because they are U.S. in nature.
As a country, we need to keep our options open. This bill closes those options and discourages investors from continuing to work in this country.
The Chair: Thank you very much. Are we all done?
Senator Stewart Olsen: No, one really brief question.
The Chair: One quick one. I would like Senator McCoy to have a question, since she is from Alberta.
Go ahead, Senator Stewart Olsen.
Senator Stewart Olsen: Premier Notley, thank you. New Brunswick has suffered as well. When you say it’s all nice on one side, no, we were strangled with Energy East. They didn’t have to try to ban tankers.
Because you are in an election right now, can you assure this committee that all your opponents take the same position as you do on a go-forward basis?
Ms. Notley: I cannot speak for all of my opponents definitively; I think that would be inappropriate. However, I will give you a 95 per cent chance that all of my opponents are on side with this position.
Senator Stewart Olsen: Thank you.
The Chair: Thank you. That was very good, premier.
Senator McCoy: Thank you for being here yet again, premier.
People are saying that they would prefer to see our oil landlocked because it contributes to climate change or global warming. I know you are a champion of climate change mitigation and adaptation. How do you square your position on shipping more oil with your position on reducing greenhouse gas emissions?
Ms. Notley: That’s a really good question. Again, this goes back to one of the first initiatives we took as a government by bringing in our climate leadership plan. As part of that, we put a cap on emissions in place. In the early stages we were quite successful, with that program and through the other elements of the climate leadership plan, in attracting investment into the task of taking carbon out of the barrel and finding ways to produce it in a way that is more responsible. All of this anticipates growing production but keeping emissions and carbon low as a percentage of what is coming out of Alberta and shipped, and essentially being an increasingly sustainable and responsible producer of the nonrenewable product.
We’re not going to be able to attract that investment, even when we find a way to produce it more responsibly, if we have no way to move it. So that’s what this is about.
The Chair: Thank you very much. We’ve got to wrap it up. I’m sorry. We have a couple of other items of business and caucus meetings are starting.
We know how busy you are right now, premier. Thank you so much for being able to present here. We look forward to visiting the province of Alberta in the first week in May on this issue. Thank you again.
Ms. Notley: Thank you.
The Chair: Senators, if you could remain one second, we have two items. I hope we get unanimous agreement on this and then it is over with really fast. One is the extension of the date. We had a date with a motion but an agreement was made between the government and the opposition for May 16 as the date.
Could we all agree that the date now is May 16 rather than the date we voted on? We have done this before. That’s the agreement we have with the government. If that’s okay, we could move that unanimously and then we are done with it.
Senator Stewart Olsen: Are you talking about clause by clause?
The Chair: Yes, exactly. It has to be reported by May 16.
Senator Miville-Dechêne: So clause by clause would be —
The Chair: We will have to schedule that at an earlier time.
The second item is the budget. We had a budget that included Estevan, but then Estevan was excluded from the travel dates. Then we had a motion that if there is enough interest we would stay extra time in Regina the following day. My recommendation is that we just keep the budget. Then we don’t have to go back to Internal to do it again. It is no different than the way we budget for senators. We budget for 12 senators; it is rare that we ever get 12 senators, just like any committee, so we won’t spend the money.
I would like unanimous agreement on that. That will help steering organize ourselves so we can get the clerk moving on this quickly, because we don’t have a lot of time. We are planning to go on April 29. That is the week we are looking at. We will consult and then we will decide. If that’s okay, we will call it unanimous and everybody is happy. I am.
Senator Boisvenu, I am so sorry, can your issue wait until tomorrow? We can always not take rather than take, Senator Boisvenu, and that will give us more time to discuss it, rather than the couple of minutes we will have. It is always easier to reduce. Thank you.
(The committee adjourned.)