RNNR Committee Report
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Mr. Leon Benoit, M.P. Dear Colleague: Pursuant to Standing Order 109, I am pleased to respond on behalf of the Government of Canada to the seventh Report of the Standing Committee on Natural Resources entitled “The Cross-Canada Benefits of the Oil and Gas Industry.” Our Government would like to thank the members of the Committee and invited witnesses for their testimony to better understand the benefits of the Canadian oil and gas industry. Our Government agrees with the Committee’s report citing the benefits of developing Canada’s oil and gas resources, and the significant opportunity presented by expanded energy infrastructure and improved access to both domestic and export markets. Canada’s oil and gas industry plays a vital role in the lives of Canadians. The report underlines that the Canadian oil and gas sector benefits Canadians from coast to coast to coast, and is poised to do so well into the future. Over the last five years, governments received over $23 billion annually from the oil and gas industry in royalties and other means. This revenue is equivalent to the amount spent on educating over 1.6 million Canadian children in public schools, or the amount governments spend on the health care of about 5 million Canadians. Over the next 25 years, responsible development of Canada’s energy resources is forecasted to generate billions of dollars in economic activity, hundreds of thousands of jobs, and billions in tax revenue to continue funding critical social programs like health care, education, and old age pensions. Our Government recognizes that the global energy landscape is changing. Growth in global energy demand is shifting to developing economies such as China and India, and unconventional resource development (e.g., shale oil and gas and oil sands) is expanding rapidly in the U.S. and Canada. The U.S. is expected to be effectively energy self-sufficient in net terms by 2035. The National Energy Board expects Canadian oil production to grow by 75% through to 2035 and natural gas production to grow by over 30% over the same period. Since virtually all of Canadian exports of oil and gas currently go to the United States (U.S.), we recognize that it is imperative for Canada to expand its energy infrastructure and diversify its export markets. To help support this objective, Canada must attract international investment. By lowering taxes, paying down debt, reducing red tape, and continuing to promote free trade around the world, Canada boasts an open and attractive investment climate. Canada placed second in Bloomberg’s recent world ranking of business-friendly nations and KPMG concluded that our total business costs are the lowest in the G7. In support of Canada’s market diversification imperative, our Government has also worked to implement a modern, streamlined regulatory system. Through the Government’s Responsible Resource Development plan, launched in 2012, we simplified the structure of required assessments, set legislated beginning-to-end timelines, and consolidated responsibility for environmental assessments to ensure one project, one review. Resources are now allocated where they are most needed: on major projects that could have significant potential environmental impacts. The creation of a safe, efficient and world-class transportation system to move energy resources across the country is also required to ensure that resources are developed responsibly and the benefits of oil and gas development are maximized for Canadians. Our Government has already introduced comprehensive measures for tankers and pipelines to ensure world-class safety. We will continue to implement additional safety measures for rail. No project will proceed unless it is safe for Canadians and safe for the environment. Our Government recognizes that safety requires continuous improvement, driven by advances in technology and innovation. Strengthening the safety of Canada’s energy transportation systems has focused on three areas:
Aboriginal peoples are especially well positioned to benefit from oil and gas development, as much of the existing or proposed resource development and infrastructure projects are located near their communities. We must make every effort to go beyond our duty to consult. We must work to ensure that development is done in partnership with Aboriginal peoples in a way that both protects the local environment and is respectful of Aboriginal and Treaty rights. We are taking action to identify shared interests and establish tools to support deeper collaboration with First Nations. This includes addressing recommendations made in a report by the Special Federal Representative on West Coast Energy Infrastructure: the creation of a Major Projects Management Office West and a Tripartite Forum between the Governments of Canada, British Columbia (B.C.), and B.C. First Nations. Innovation and new technologies are also critical to improve the economic and environmental performance of energy production, transport, and use. The Government of Canada is investing $480 million over five years (2011–16) to develop and demonstrate leading-edge technologies in energy efficiency, renewable energy, transportation, and unconventional oil and gas, and for the development of tools and regulations to help technologies make it to market. In our efforts to support industry in addressing the environmental impacts of oil and gas development, we have invested in areas such as tailings management, advanced separation technologies, and soil and groundwater remediation. As well, Canada is a leader in carbon capture and storage technology, with four commercial-scale demonstration projects in operation or under construction. Working collaboratively, the Government of Canada and the Governments of Alberta, Saskatchewan, and B.C. have invested over $1.8 billion in funding for carbon capture and storage since 2008. Our Government is also taking other steps to reduce greenhouse gas emissions related to energy development. Through a sector-by-sector regulatory approach, regulations to reduce greenhouse gas emissions are being tailored to individual sector circumstances, to maximize progress while maintaining competitiveness across the Canadian economy. We have already put in place regulations for two of Canada’s largest sources of emissions—transportation and electricity—and are continuing to work on regulations for other major sources, including the oil and gas sector. Finally, our Government is investing in responsible energy use and is making important progress toward improvements in energy efficiency. We deliver programs that provide Canadian consumers and businesses with practical ways to reduce their energy costs, enhance productivity and competitiveness, and improve environmental performance. This is particularly important for energy-intensive industries like oil and gas. Taken together, our Government has taken critical steps to position Canada as an oil and gas leader and ensure that present and future generations will continue to benefit from these strategic resources. In closing, we would again like to thank the members of the Standing Committee on Natural Resources for their work in preparing this report. Sincerely,
The Honourable Greg Rickford, P.C., M.P. |