Opposition – New Democratic Party of Canada
Dissenting Report to the Study on Current and Future
State of Oil and Gas Pipelines and Refining Capacity in Canada
New Democratic committee members are encouraged this study,
sparked by our concern about Canada’s declining refining sector, draws
attention to the need to better identify and understand a wide variety of energy
challenges facing Canadians. However, we are disappointed Majority Report
recommendations simply and uncritically repeat the government’s unbalanced
approach to natural resources management in Canada―an approach that is
destabilizing the balanced economy we've built up since the Second World War.
While the main report identifies a number of significant
issues pertaining to refineries and pipelines in Canada, there are four main
issues it does not adequately address: (1) the need for a made-for-Canada
energy strategy that prioritizes the interests of Canadians; (2) the protection
of quality, value-added jobs in the refining sector; (3) the need to ensure sustainable
energy security in all parts of the country; and (4) the importance of
responsible, sustainable resource development and a robust environmental
In November 2011, New Democratic committee members proposed
the Standing Committee on Natural Resources study the Current and Future
State of Oil and Gas Pipelines and Refinery Capacity in Canada. It was
hoped such a report would contribute to our understanding of our rapidly developing
oil and gas sector as well as provide an overall picture of energy provision in
Canada. Four days of expert testimony reinforced our view of the pressing need
for a comprehensive energy strategy and provided valuable insights into
possible policy solutions.
Unfortunately, this testimony is largely ignored in the main
body of the Majority Report. In addition to ignoring the need for a
comprehensive energy strategy, the Majority Report recommendations outline an alarming
vision for accelerated energy-related resource development without due regard
for economic impacts, the enforcement of environmental regulations or the
internalization of environmental costs.
This dissenting report reflects upon the Majority Report
recommendations and presents an alternative vision of natural resource
development that prioritizes the interests of the Canadian public.
The final recommendations generated in the Majority Report are
engineered to justify the Conservative Government’s present approach to energy
sector resource development. The Majority Report recommendations illustrate a one-dimensional
approach to natural resource development that prioritizes oil industry profits.
We feel Canadians instead expect both energy security and the sustainable
development of our country's natural resources.
This Conservative approach comes at the exclusion of almost
all other values. For example, the Conservative approach favours raw resource
export over domestic value-added job creation and foreign sales over domestic
resource security. It exposes Canada to the risks of unchecked foreign ownership
of Canadian natural resources. It ignores potentially perilous international
trade obligations―such as the proportionality clause of NAFTA―
requiring Canada to export set amounts of natural resources once such exports
have been initiated.
This development-at-all-costs approach sets up conflict
between Canadians and hides the associated environmental costs to future
generations. The Conservative approach encourages the extraction and export of raw
natural resources with little domestic benefit, but considerable environmental
and social costs that will be borne by Canadians.
Canada needs a national energy strategy. This strategy must
establish a plan for developing our vast natural resources to secure maximum
economic benefit for Canadians, address a number of long-standing energy
related challenges, but also ensure the environmental and social well-being of
current and future generations. The Conservative Government refuses to develop
such a strategy despite calls for action from provincial and territorial governments,
industry and citizens.
The importance of energy to the lives of Canadians and to
our economy, and the complexity of the considerations involved, highlight the need
for a national energy strategy for Canada. Such a strategy requires policy
development in areas including the domestic supply of renewable and
non-renewable energy-related resources and non-renewable resource export. Policy
development in these areas must consider how to balance potential benefits as
well as economic, social and environmental impacts.
Under the Conservative government's policies, billions of
dollars in direct and indirect subsidies to the oil and gas industry have led
to an artificial rise in the value of the Canadian dollar. Evidence suggests the
inflated Canadian dollar is now responsible for over 50 per cent of all job
losses in our manufacturing sector—more than outsourcing or the recent
recession. The government's unbalanced resource development policies impose a
heavy toll on the Canadian economy.
New Democrats believe the federal government has a role to
play in developing a comprehensive strategy for our country’s long-term energy
security in a lower carbon future, in consultation and cooperation with
provincial, territorial and Aboriginal governments, unions, energy providers,
environmental organizations, and other stakeholders.
A successful Canadian energy strategy must respect the basic
principles of economic, social and environmental sustainability, including
enforcing existing environmental regulations internalizing environmental costs.
It must reduce Canada’s non-renewable resource dependency by maximizing energy
conservation and fostering renewable energy development. It must also ensure
responsible resource export and maximize the economic benefits of resource
In contrast to this approach, the Conservative government
has chosen to focus almost entirely on non-renewable energy resource export,
with little if any consideration given to domestic supply of energy-related renewable
or non-renewable resources. While the Conservative approach is driven by the
corporate interests of major energy companies, it pays little or no attention
to social or environmental impacts of government policy.
That the government should immediately begin working with provinces, territories,
municipalities, Aboriginal groups, industry, NGOs and the academic community to
develop a comprehensive national energy strategy that puts Canadians first.
emergence of the Western Canadian oil sands has transformed Canada. Crude oil
reserves are estimated to be approximately 170 billion barrels, growing to 300
billion barrels due to extraction technology advances. In 2010, Canada produced
1.5 million barrels of bitumen per day. These reserves not only provide
considerable raw-export potential, but also value-added opportunities in the upgrading
and refining sector.
Canada has failed to take advantage of the domestic opportunities to add value
to these raw products. While Canadian refineries are comparatively clean and
efficient, only 15 full-range refineries remain operational with only a handful
equipped to refine bitumen based-crude oil. While Canada remains a net exporter
of refined products, this status is under threat. Canada has lost approximately
one refinery per year since production peaked in the 1980s. Where in the early
1980s Canadians refineries produced approximately 2.2 million barrels per day
of refined products, this amount since has dropped by nearly 400,000 barrels
per day. More provinces will lose all ability to refine oil products if Canada
continues to lose refineries at the current rate.
of the Canadian refining sector also represents a significant erosion of
high-paying, long term jobs. The direct refinery labour force peaked at 27,400
workers in 1989, falling by nearly 10,000 workers to just 17,500 jobs by 2009. Testimony
from the Communications, Energy and Paperworkers’ Union shows that “for every
400,000 barrels of raw bitumen exported out of the country for upgrading and
refining, 18,000 jobs in Canada will be lost.” Currently, seven Albert-based
upgraders process just 53 per cent of oil sands bitumen prior to export. This
represents a significant lost opportunity for long term, value added jobs.
construction of high volume export pipelines such as Keystone XL and Enbridge
Northern Gateway would greatly increase the export of raw bitumen. New
Democrats are concerned the Conservative Government’s unreserved support of
these pipelines ignores their significant negative impacts on potential
long-term employment in Canada and on the value extracted from our natural
that oil and gas will continue to play a prominent role in our energy mix in
the medium term, a responsible energy strategy would discourage bulk exports of
our unprocessed resources and encourage value-added, responsible upgrading,
refining and petrochemical manufacturing here in Canada to maximize the
economic benefits and jobs for Canadians.
Recommendation: In order to maximize the long term
viability of Canada’s upgrading and refining sectors, the Government of Canada should continually monitor
domestic refining output and work with the provinces and territories to protect
quality, family-sustaining jobs in the upgrading and refining sectors.
A comprehensive approach to energy must also take into
account the security of our energy supply both nationally and at a regional
level. Committee testimony highlights the fact that while Canada is a net oil
exporter, regional energy production and consumption significantly varies.
In particular, witnesses indicated that Eastern Canada’s
reliance on imported oil and gas to meet many energy needs (including a higher
reliance on fossil fuels for home heating) exposes the region to significant
price volatility and occasional supply uncertainty. Testimony from Professor
Larry Hughes of Dalhousie University highlights the importance of improving
energy security in the region by conserving energy, developing renewable
alternatives, and exploring ways to increase Eastern access to Western energy
In spite of this evidence, the Conservative Government
eliminated federal support for renewable power by ending of the ecoENERGY for
Renewable Power Program. It also cancelled the highly popular ecoENERGY
Retrofit - Homes Program which helped Canadians reduce energy consumption and
improve the efficiency of their homes. The elimination of these and other
measures have a negative effect on Canadian energy security.
New Democratic committee members believe the best way to
ensure long-term energy security for all Canadians is by reducing dependence on
fossil fuels and fostering the development of renewable energy technologies
which provide safe, environmentally friendly, and reliable energy to meet energy
needs in all regions.
Sustainability—social, economic and environmental—must be at
the centre of our approach to the development of natural resources. New
Democrats reject the false dichotomy between protecting our environment and
ensuring long-term jobs for Canadians. Sustainability can, and must, become
central to the way we do business in order to ensure that future generations
can prosper. More specifically, cumulative environmental impact assessments, enforcing
environmental regulations, robust consultation with First Nations, and implementing
science-based monitoring are all essential to ensure responsible development.
Unfortunately, the Conservative government has failed to
uphold these principles. In 2010, the Conservatives used the budget bill to
transfer the authority for most environmental evaluation for major resource
projects from the Canadian Environmental Assessment Agency to the National
Energy Board and the Canadian Nuclear Safety Commission. New Democratic
committee members are concerned the Conservative government will repeat this
move in 2012 in order to speed up environmental reviews for major resource
While we agree that Canada’s environmental assessment laws
could better serve the interests of the public, industry, First Nations and the
environment, New Democratic committee members hold that rolling back
environmental protections developed over the past two decades to speed projects
to approval will not serve Canadians, especially if it is done in a way that
inhibits open public debate on the changes and avoids proper scrutiny by a
Recommendation: That any changes to the regulatory
process should not negatively impact the participation of Canadians in the
review process by either reducing participant funding or time available for
public comment, and should not curtail the duty to consult with Aboriginal
groups. Furthermore, that any changes be proposed in stand-alone legislation so
that it may be given full consideration by Parliamentarians.
Testimony to the Standing Committee on Natural Resources
reinforces the need for a national energy strategy, confirms concerns over the
loss of value-added refining in Canada, and underscores the need to address
energy security while balancing the requirement for appropriate environmental
protections. Under the Conservative approach, the decline of the Canadian
refining sector and expansion of raw export oil pipeline capacity suggests a
future in which Canadians receive less value for our energy resources, while
depleting these non-renewable resources at an increasingly rapid pace. Such a
future presents a risk not only to our environment and communities, but to
quality Canadian jobs and the long-term economic competitiveness of our energy
sector in a world transitioning to cleaner energy sources.
Democrats have a very different vision for Canada’s energy and resource future,
one in which we maximize the benefits we receive from our resource development
while at the same time minimizing negative social and environmental impacts.
While we recognize this approach to managing resources will require greater
collaboration with the provinces and territories and deeper engagement on a
variety of policy proposals than those proposed by the Conservatives, studies
such as this begin to show a way forward.