Canada is the world’s sixth largest producer of natural gas, and is home to the world’s third largest oil reserve.[5] Heather Kennedy, Vice-President of Government Relations at Suncor Energy, told the Committee that “Canada is in an enviable position when it comes to oil and gas,” and that “our abundance of fossil fuels has positioned us as a global marketplace, providing a unique opportunity to develop the reserve base over the long term.”[6]

The oil and gas industry accounted for 21.5% of the total Canadian capital expenditure in 2013.[7] Janet Annesley, Vice-President of Communications at the Canadian Association of Petroleum Producers, reported that industry’s overall annual revenues at approximately $110 billion[8] can be primarily attributed to the development of unconventional oil and gas, which, according to Sarah Dobson from the Pembina Institute, has grown at “an annualized rate of 8.4%.”[9] Ms. Annesley reported that, as a sector, “the upstream oil and gas industry is today, Canada’s single largest private investor, forecast to inject some $68 billion into Canada’s economy this year, and that capital provides direct and indirect employment for more than 550,000 Canadians and countless others sectors that do business from Main Street, Saskatchewan, to Bay Street, Ontario.”[10]

Several witnesses suggested that an estimated 30% to 50% of Canada’s oil and gas industry is Canadian-owned.[11] Among the industry’s domestic ownership sources, Canadian public pension funds were characterized as an important shareholder.[12] According to Brenda Kenny, President and Chief Executive Officer of the Canadian Energy Pipeline Association, approximately 25% of the Toronto Stock Exchange is energy related, “so any large pension plans would certainly have a stake in this.”[13] Ms. Annesley also noted that “When people think about who benefits from oil and gas, they often think about a C-suite executive in Calgary, but it's really nurses and teachers.”[14]

Oil and gas exploration and production (upstream operations) take place primarily in western Canada, though there is significant oil and gas production in Atlantic Canada and the North. While this segment of the industry is concentrated primarily in those regions, the overall value chain of the industry – including, but not limited to, refining, manufacturing, maintenance, pipeline transportation, and retail and wholesale sales – extends across Canada and benefits all provinces and territories.

According to Peter Boag, President and Chief Executive Officer of the Canadian Fuels Association, energy pipelines, the midstream component of the industry, are an integral part of the oil and gas value chain, “providing [an] essential linkage between the location where the raw material is found, the processing facility, and beyond the processing facility.”[15] The Committee learned that Canada’s network of pipelines extends over 115,000 kilometres and moves approximately 3.2 million barrels of oil and 14.6 billion cubic feet of natural gas across the country, every day.[16] To emphasize the importance of energy pipelines in the Canadian economy, Ms. Kenny stated that “The energy pipeline industry is an enabler of prosperity across Canada and continues to be a hallmark of this country’s nation building. We help keep the cars moving, factories running, houses heated, creating jobs and economic activity in every region of the country.”[17]

The Committee learned that Canada has 18 oil refineries located in 8 provinces, with a combined capacity to refine nearly 2 million barrels per day of crude oil.[18] Mr. Boag highlighted the importance of Canada’s oil refineries, the downstream component[19] of the industry, by stating that “[they] are the crucial manufacturing intermediaries between crude oil as it comes out of the ground and the refined products that we as Canadians use every day.”[20]

Speaking about Canada’s environmental regulatory regime, Mr. Boag raised the importance of policy alignment across jurisdictions so that the oil and gas sector remains globally competitive. He then added that “to Canada's credit, and most provinces, we've done a very good job of making sure that the substance and pace of our environmental regulation is largely aligned with that of the U.S.”; Canada’s significant competitor.[21] Normand Mousseau, Professor at Université de Montréal, noted that several provinces (i.e., British Columbia, Alberta, and Quebec), have introduced policies and programs that require their large greenhouse gas (GHG) emitting industries, including oil and gas, to undertake GHG reduction measures.[22] Ms. Kenny told the Committee that the “industry overall is supportive of movement toward climate change action in a measured approach,” and it is already participating in a number of programs that aim to reduce its emissions.[23]

Several witnesses commented on the world-class safety regime and innovations that the federal government has implemented and supported in the resource development sector to enhance economic benefits.[24] For example, Jay Khosla, Assistant Deputy Minister at Natural Resources Canada, noted that:

… the Government of Canada is and has taken action to ensure success. In fact, much has already been done to support a vibrant and responsible energy sector. The government has modernized its regulatory system, is putting in place world-class safety and security regimes, and has invested in innovation and efficiency. The government is engaging domestically and internationally, and building partnerships with stakeholders to maximize Canadian benefits from resource development. In sum, the objective is to put all the building blocks in place to support the effective and efficient development of projects.[25]