Check against delivery
Thank you very much Madam Chair, honorable senators.
It's my pleasure to be here this morning to address an issue that is very important to the people of Alberta, accompanied by my Energy Minister. I look forward to her participation in this testimony.
Madam Chair, this bill—if passed in anything like its current form—will, in the submission of the Alberta government, be a disaster for the Canadian economy and will seriously rupture national unity.
If it passes in anything like its current form, the Government of Alberta will launch an immediate constitutional challenge of Bill C-69 as an obvious and flagrant violation of our exclusive constitutional jurisdiction to regulate the production of our natural resources. This is a power that was won by Premier Peter Lougheed in 1981 in the constitutional convention held in this building, without which Alberta never would have signed its consent to the patriation of the constitution in 1982.
Alberta's consent in the Constitution Act was predicated on it attaining exclusive constitutional jurisdiction in section 92A for the regulation of production of natural resources--specifically of oil and gas. The bill before you proposes, in a flagrant way, to violate that exclusive power, which was a condition precedent of Alberta's consent to the Constitution Act.
Madam Chair, recent polling indicates that as many as 50 per cent of Albertans indicate that they support the concept of secession from the Canadian federation. I, and our government, am dedicated to national unity. I'm here to convey to you and your fellow senators that there is a growing crisis of national unity in Alberta, which would be exacerbated by the adoption of this bill and other policies like the proposed “tanker ban” Bill C-48.
In Alberta, this is known as the “no more pipelines act” precisely at a moment that we are living through a period of prolonged economic decline and stagnation in Alberta, in large measure because of our inability to get Alberta's and Canada's natural resources to global markets. This has caused enormous economic suffering in Alberta.
Nearly 200,000 unemployed people—tens of thousands who have left the labour market and given up looking for work, tens of thousands who have left our province, many of whom moved to Alberta from provinces in eastern and central Canada to participate in our resource industry—no longer have employment. Incomes are down in Alberta by over 6 per cent in the past four years. So many families are struggling to get by.
And all of this in part because, apparently, many Canadian leaders have decided to surrender growing global energy markets to some of the world's worst regimes: the OPEC dictatorships, Russia and the United States, which has doubled its energy production in the past decade…
…while U.S. foundations have funded a campaign to land lock Canadian energy. A campaign that funded organizations that have called for and support this bill precisely because they see it as another tool in land locking Canadian energy.
I note, Madam Chair, that the very same organizations who endorsed this bill, who opposed the Northern Gateway pipeline, who opposed the Energy East pipeline, who opposed the Keystone XL pipeline, who opposed the Trans Mountain pipeline, who want to make sure that this bill prevents any other major pipeline project from being proposed…
…those very same groups have done nothing to stop the doubling of US oil production, the massive expansion of the oil pipeline system in the United States, or a 10 per cent increase in the production of oil across the world in the past decade alone.
In this bill, in C-48, in their campaign of obstruction, they have focused exclusively on bottlenecking Canadian energy. I think its incumbent upon you as members of Canada's Upper Chamber to ask: Why are these organizations so committed to undermining the vital economic interests of this country while doing nothing to reduce or diminish growing global demand and production for oil?
I think the answer is simple.
It is because we as Canadians and our political leadership have invited this campaign of obstruction and aggression through weakness, because we have political leadership willing to introduce legislation such as this. And that is why our government, which was sworn in two days ago, is launching a strategy to stand up for Alberta.
No longer will the people of Alberta quietly accept policies such as this, which constitute a direct attack on our vital economic interests.
We Albertans are proud of what we do. We are proud to have the third largest reserves of recoverable oil in the world, and the fourth largest reserves of natural gas. We are proud to produce those resources at the world's highest environmental, human rights and labour standards. We are proud of the remarkable innovation and massive investments made by our energy companies in constantly shrinking the environmental footprint and carbon intensity of Alberta energy.
We are proud conservationists, and we're very proud of our natural environment. And we will protect it. No matter what political stripe, Albertans will protect the environment.
As far as we're concerned, and from an energy point of view, it's not an issue of protecting the environment. It’s a total lack of balance in the essential protection of the environment and economic growth.
The bill completely misses the balance that we all know we need between environmental protection and economic development. And that is why this bill is opposed across the political spectrum in Alberta. And I believe it has growing opposition across Canada. You heard recently from my distinguished predecessor, former Premier Notley, who spoke eloquently about Alberta's opposition to this bill.
I endorse the words that she presented to this committee.
However, I want to be very clear. We are not simply here to say that this bill needs amendments. In our view, if this bill continues in anything like its current form, it is unacceptable. The Government of Alberta has submitted a series of amendments which our government endorses—amendments which are essential to the protection of provincial jurisdiction, in part, respect for section 92A of the Constitution Act.
We also endorse the amendments brought forward by the Canadian Energy Pipeline Association and the Canadian Association of Petroleum Producers. In our view, these amendments must together form a package to do anything remotely like saving this bill so that it does not create an even deeper crisis in investor confidence.
Madam Chair, one of the reasons for the prolonged economic adversity in my province is because of the flight of tens of billions of dollars of capital, primarily from our oil and gas sector…capital that has fled and taken with it jobs and equipment from the Canadian oil and gas industry, primarily to the American oil and gas industry.
This money has not left the production of energy. It has simply left the employment of Canadians, once again highlighting the futile hypocrisy of those seeking to bottleneck Canadian energy. In my province, we suffer from 7 per cent unemployment, which I think masks the real numbers. In the energy producing states south of the border, they benefit from 2 to 3 per cent unemployment in Texas, Oklahoma, Colorado and North Dakota.
While there's been a massive decline in oil and gas investment in Canada, there's been a massive, concomitant increase of over 5 per cent in the United States over the past four years.
This is not about global prices.
This is about policy—a policy environment which is further damaged by the uncertainty created by Bill C-69. So, Madam Chair, the C.D. Howe Institute in 2018 estimated that 36 projects worth $77 billion alone were cancelled in Canada. 2018 was the worst year for Canadian oil and gas financing in two decades.
Over the past decade, the annual return on Canada's oil and gas equities has been a negative 0.5 per cent and they constituted the biggest share of the Toronto Stock Exchange, versus a positive 5.5 per cent growth for oil and gas equity.
So I ask anybody, Madam Chair, who thinks that there's some virtue in further strangling the industry that has been a key engine of Canadian prosperity: I ask them to account for the fact that all they've done is to ship capital, jobs and energy production to another jurisdiction…a jurisdiction that does not have carbon taxes, that has lower environmental regulations, that has a much easier time of building pipelines, and a jurisdiction which has gone from a significant importer of Canadian energy to a net exporter of their own in energy.
In 1980, Premier Peter Lougheed described the national energy program as "The Ottawa government without negotiation and without agreement simply walking into our home and occupying the living room." That is exactly how I would describe bill C-69.
What they pass in its current form goes beyond the mandate of the federal government in its jurisdiction over overriding provincial projects of the oil sands and other petrochemical industries…which find themselves within the limits of the province, it's jurisdiction and are already subject to provincial regulation to the federal government, that the threat posed by C-69 cannot be dismissed as a uniquely Albertan issue.
Yes, I'm here to represent my province, but I'm also standing up, I believe, for the interests of Canada's national economy. When Alberta's energy sector suffers, it cascades through the whole economy. Recent statistics have yet again demonstrated a sluggish growth in the Canadian economy precisely because of what's happening in our energy industry.
A study from the University of Calgary School of Public Policy estimated recently that pipeline capacity constraints are costing Canadians some $14 billion a year in lost revenue, with about $7.2 billion forfeited from provincial royalties and other taxes, $5 billion loss by industry and the rest being lost at the federal level.
But don't just take my word for how devastating C-69 would be for Canada. Listen to the people who decide every day whether or not to invest in our country and create jobs here. Total, a French petro company, have estimated that bill C-69 will make it much less likely that they will invest in energy projects or make a commitment like pipeline capacity in Canada. They are threatening to vote with their feet.
Every energy industry association has been lining up at this committee to show how the expanded scope of assessment, unlimited interventions and endless opportunities to extend timelines will make investor uncertainty even greater where it is already in a crisis situation.
Equally worrisome is who you're not hearing from. It's impossible to calculate the value of projects that investors aren't bothering to propose. Foreign investors are saying they cannot be bothered to spend the time figuring out a country that cannot resolve its internal differences.
They're not going to waste good money on pointless, protracted regulatory exercises that would now be further lengthened by this bill.
Madam Chair, it's simply baffling to Albertans and to most Canadians who understand the facts that we as a country would inflict this punishment on ourselves. The Canadian oil and gas industry has the most highly regulated, cleanest, fairest and most inclusive resource management regime on the face of the planet.
I note that the bill includes a mandate for a gender assessment of these projects. There is no energy industry in the world that employs more women than the Canadian energy industry. There is no province that has a higher level of employment and incomes for Aboriginal people than the province of Alberta. Why? Primarily because this industry has been a tool of social progress, Madam Chair. Tens of thousands of Canadians who were living in despondency, dependency and unemployment moved to Alberta because of the industry attacked by this bill.
So if your interest is in social progress, then why would we create yet further uncertainty and damage for an industry that has been one of the greatest engines of social progress? If your industry is growing the middle class and making it easier for people to join it, then why would you do further damage, through this bill, to the industry that has been the greatest engine of middle-class growth in the modern Canadian economy? This is inexplicable to us.
This bill delivers the exact opposite of what the Liberal Party promised in its 2015 platform, which stated that we will end "the practice of having federal ministers interfere in the environmental assessment process." But the bill as it is now drafted does the exact opposite.
There will be more political interference than ever before under C-69. Despite the promise of improved approval timelines, C-69 has more than earned the name, the “no more pipelines act.” It provides repeated opportunities for the minister to intervene and pause the process.
It creates a regime that limits the information taken into account in decision-making, and raises serious questions about natural justice and procedural fairness. As I've said, Alberta is not alone in raising these concerns.
I know my time is limited, so let’s focus on what, to me, is really the essential issue for us.
As I outlined in my letter to this committee on April 9th, such a broad review of the decision-making process that is included in this bill flies clearly in the face of section 92, 10 of the Constitution Act, which speaks to projects or activities that constitute local works or undertakings. These are projects involved in the exploration of natural resources and sites and facilities in the province for electrical production, all of which fall within exclusive provincial jurisdiction under the constitution.
This bill as written would give the federal government final say on the construction and operation of these kinds of provincial projects based on factors unrelated to any legitimate federal jurisdiction.
This is directly contrary to the Supreme Court of Canada’s 1992 Oldman Dam River Society decision. The Supreme Court ruled that federal environmental assessments “can only affect matters that are truly in relation to an institution or activity that is within federal legislative jurisdiction.”
With no limitation spelled out in C-69 on the scope of federal assessments and approvals, this bill disregards the balance, the delicate and important constitutional balance, between federal and provincial powers.
This is particularly galling as it violates section 92A of the constitution, which I've mentioned before, which was a condition precedent of Alberta’s signature on the Constitution Act.
I understand the federal government released yesterday its proposed criteria for projects under this bill and purports, amongst other things, to regulate the development of in-situ oil sites in Alberta. These are exclusively within Alberta territory. They relate to the production of natural resources.
There is no rational person who could see under section 92A a federal interest to regulate that. It would be a blatant violation of the constitution.
The federal government is asking you to violate the constitution of Canada in adopting this bill. Should this proceed in its current form, we will see the federal government in court and have a very high level of confidence about prevailing there.
If this committee decides to proceed with the bill, I ask that it be substantially rewritten to respect our exclusive provincial jurisdiction. That means that the amendment packages proposed by CAPP and CEPA and the previous Alberta government, in our judgment, must be adopted in their entirety with no exceptions.
This bill does not need a nip and tuck, it needs complete reconstructive surgery--or it needs to be put out of its misery.