QUESTION PERIOD — Natural Resources
National Energy Strategy
June 22, 2021
Honourable senators, my question is for the Government Representative in the Senate.
Senator Gold, the Canada Energy Regulator is currently holding hearings in response to a request from Enbridge to change its pricing regime. Enbridge is requesting a switch from short-term contracts, wherein risk is borne by the pipeline owner, to long-term contracts. In this proposed regime, if a producer can’t fill its contracted space, it is still on the hook for paying the pipeline fees.
Most Canadian oil producers oppose the switch, yet Enbridge says that most refineries support the switch, and it’s their right. The problem is that those refineries are located in the U.S. and are owned by U.S. companies. Plain and simple, they want to pay less for our resources.
Senator Gold, considering we are all reluctant owners of the soon-to-be-completed expanded Trans Mountain pipeline, can you describe how this pricing regime will affect government revenues from TMX?
Thank you, senator, for your question and for giving me some advance notice, because it enabled me to seek more information from the government than I would have otherwise had at my fingertips.
The government is well aware that the proposed pricing-regime change has the potential to significantly impact many parties. As part of the Canada Energy Regulator’s full review of Enbridge’s application, all interested parties are invited to provide input to that body, which is an independent regulatory body.
With regard to the potential impact on government revenues, this government does not intend to be the long-term owner of Trans Mountain Corporation. I’ve been advised that the government intends to launch a divestment process after the expansion project is further de-risked, if I can use that term, and after engagement with Indigenous groups has concluded.
The government remains confident that this project was and is a responsible investment that will generate a positive return for Canadians. Again, I’ll remind colleagues that every dollar earned will be invested in clean energy projects.
Earlier this month, another insurer declared the Trans Mountain pipeline too risky to be insured. Does the government have an estimate of when the project will no longer be insurable by private funds?
Thank you for the question, senator. I do understand that one insurer has decided not to renew the insurance policy they were holding that expires in August. As we all know, insurance decisions are made by private-sector insurers based upon what they perceive the risks to be in the marketplace.
The government sees markets moving when it comes to energy. Globally, the energy landscape is shifting, and investors are putting their money in companies and jurisdictions that take climate change seriously. It has been much in the news, as we know, over the last number of weeks.
To answer your question, from the government’s perspective, the fact is that Trans Mountain Corporation would be in a better position to comment on this matter, and I invite you to make inquiries there.
