Hon. Joseph A. Day (Leader of the Senate Liberals):
Honourable colleagues, I’d like to say a few words in relation to this bill and the proposed amendments.
As others before me have said, this is a simple bill, just four clauses, and it does one thing: It declares the Trans Mountain pipeline project and all related works, which is a bit of a concern, to be works for the general advantage of Canada. I’d like to congratulate Senator Black for bringing this issue before us in the form of a bill.
Senator Black has laid out his rationale for bringing this legislation forward. He noted that Kinder Morgan has been pushing this project and advocating for it for more than six years, meeting every requirement made of them during the approval process.
As Perrin Beatty, President and CEO of the Canadian Chamber of Commerce, put it in a recent special piece in the Financial Post:
“Trans Mountain received federal approval after an extensive, rigorous, scientifically valid review with input from thousands of stakeholders. At the end of that process, Kinder Morgan accepted the numerous federal and provincial conditions imposed on the project.”
But it seems that all the work to date has been for naught, and the uncertainty surrounding this project, though it has been approved to proceed, has caused Kinder Morgan to suspend non-essential activities and related spending on its pipeline expansion project. They are uncertain. Their shareholders are uncertain, and nothing that is occurring right now is allaying that uncertainty.
As we have heard, the bill would declare that the Trans Mountain pipeline project and related works are works to the general advantage of Canada. In his speech on this bill, Senator Black said:
“. . . the competitive position is being eroded in Canada, and in large part it’s being eroded in Canada because there is a sense which has developed that Canada is the country where projects come to die.”
More than ever, this seems to be the case. I think it is particularly fitting now, in the shadow of the Kinder Morgan Trans Mountain situation, that we have a frank discussion about the need for pipelines in this country.
Senator Mockler: That’s right.
Senator Day: Canada is the fourth-largest producer of oil in the world, and there can be no doubt that transportation of oil is becoming an issue in this country.
As I have said in this chamber before, we face real challenges in moving Alberta oil, whether going westward over the mountains through a pipeline or eastward, being carried by rail cars or otherwise. If we are to take advantage of our own natural resources, we will need to find ways, both economically and environmentally sound ways, to move it.
While the Kinder Morgan controversy rages in the West, it is clear that a lack of pipelines is having an effect in the East as well. Eastern Canada is currently importing more than 750,000 barrels of oil per day from the United States and other countries around the world, oil that could be coming from Alberta. That is why I was so disappointed at the cancellation of the Energy East pipeline project. It would have carried 1.1 million barrels of Alberta oil to Atlantic Canada every day. It would have had a great economic impact on New Brunswick, creating jobs and opportunity in the province, and I am certain those benefits would have been felt in the rest of Canada as well.
Senator Mockler: Absolutely.
Senator Day: My colleagues from New Brunswick, Senator Percy Mockler in particular, said in an op-ed piece last fall:
“Canada is a nation with an abundance of natural resources, but due to our outdated infrastructure for transporting oil, we’re stuck with all our eggs are in one basket.”
Senator Mockler: That’s right.
Senator Day: Senator Mockler continued:
“Energy East promised the opportunity to diversify our export markets by getting oil to tidewater, as a result slashing the discount at which we’re forced to sell to the United States due to a lack of other options.”
There was much support for Energy East among the businesses in the region as well. During a committee hearing in Saint John, New Brunswick, Dick Daigle, then chairman of the Saint John Region Chamber of Commerce, testified:
“Support for Energy East pipeline has been identified as the top issue for our membership, and support has been consistent, in excess of 90 per cent over the last three years. Our membership is supportive because they recognize and understand the benefits that can come to a country and our region because of this pipeline.”
Mr. Daigle went on to say that Energy East would have resulted in a nearly $16 billion investment, which could have been the equivalent of $55 billion in gross domestic product growth for Canada and $6.5 billion for New Brunswick over 20 years. It could have meant more than $850 million in tax revenue for the province of New Brunswick, but we all know what happened.
In August of last year, the National Energy Board announced an expanded focus for the Energy East project, including the consideration of greenhouse gas emissions, an impact of reduction targets.
In September, TransCanada suspended its project application so that it could conduct a thorough review of these changes announced by the National Energy Board partway through the process.
In the end, given the new assessment criteria announced by the National Energy Board, TransCanada terminated the project altogether.
Honourable colleagues, we didn’t hear the federal government coming forward and offering to help with the financing on that particular project at that time, nor did it stop the change in criteria halfway through the project after TransCanada had spent millions of dollars over many years during the process.
In light of what happened, the Senate Transport Committee’s report on pipelines seems prescient. It reads:
“Many witnesses suggested that the regulatory process needs to be fair, based upon the best-available evidence, informative and transparent. As noted above, investors also need to be confident that the regulatory process will not change partway through a review, and that they can proceed with a project once they have obtained the required regulatory licences.”
This is what happened with Energy East. The National Energy Board chose to greatly expand the assessment criteria in the middle of the assessment process and TransCanada felt it was no longer in their best interest to continue the project.
As senators will know, I have asked the Honourable Jim Carr, Minister of Natural Resources, about the failure of Energy East. Most recently I asked if the federal government supported in principle a pipeline eastward, bringing Alberta oil to Atlantic Canada. But the minister dismissed even the idea of a pipeline running east despite the obvious economic and environmental benefits.
I’m glad that our forebears, honourable colleagues, had greater nation-building vision, for the railways might never have been built in Canada.
Honourable senators, the fact remains that Canada already has an extensive network of pipelines, about 840,000 kilometres of them, that carry crude to domestic and U.S. refineries. The economic benefits to expanding that network within the confines of our regulatory system would be significant.
Senator Pratte in his remarks at second reading earlier this month — not today — noted his concern that the bill will accomplish little but further entrench the sides for and against. On the other hand, it’s difficult to see a resolution that will satisfy opinion holders on both sides of this debate.
But as Mr. Beatty said, investors are right to question the worth of Canada’s regulatory regime if at the end of the process a province can obstruct and overturn a federal decision because it disagrees with that federal decision.
This is something of which we must take heed. The success of our federation relies on the rule of law and confidence in the decisions made by our policy-makers. We must do what we can to consider all options and find solutions, and this bill makes it clear that our federal government has an important constitutional role to play in this process.
The question that we have before us is: Do these amendments help this bill? Do we need the bill now that the federal government has already indicated that this project is in the interest of Canada?