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Saskatchewan makes its case before Senate committee on Bill C-48

Provincial government sees double standards abounding with C-48

ReginaSpeaking on behalf of the government of Saskatchewan, Energy and Resources Minister Bronwyn Eyre testified before the Senate Transportation and Communications Committee when it held a hearing May 1 in Regina, looking into Bill C-48, the Oil Tanker Moratorium Act. This is the bill which would formalize the moratorium of oil tankers exporting Canadian crude oil products from the northern B.C. coast.

This was Eyre’s opening statement, in its entirety:

First off, I would like—we would like—to thank members of the committee for stopping in Saskatchewan. I know that was in question at one point. There was some talk of it’s being an “unnecessary expense.”

But of course we feel that that’s the last thing it is, and that it’s necessary and important that you hear from Saskatchewan people directly about the impact, to their jobs and livelihoods, that this Canadian energy crisis that we are in—because it is a crisis—represents; and is having on people.

This crisis continues to put Canadian jobs at risk: thousands across Western Canada. 

And these are Canadian jobs. Just like GM or Chrysler jobs or SNC-Lavalin jobs. 

We like to say that  energy jobs are ‘people too.’

Why we’re here today, and why we feel it’s important to address you on Bill C-48, is because this proposed bill is part of a broader, macro-economic issue—which is that Canadian exporters continue to not be able to get oil to tidewater, which has a resulting, trickle-down effect on the price that we get for Canadian energy products; and ultimately on royalties (which of course fund hospitals and highways, social services and and across Canada).

This should be a national issue. After all, last year, insufficient pipeline capacity cost Canada’s energy sector $20.6 billion, or 1 per cent of GDP. 

Here in Saskatchewan, we feel that, within the federation, when it comes to energy, there is, quite simply, a double standard between East and West—even between West and West. And that’s a painful realization; and a painful truth to have come to terms with. 

If you told a person on the street that despite proposed Bill C-48, the Oil Tanker Moratorium Act, the $40 Billion-dollar liquid natural gas (LNG) terminal—planned for Kitimat in BC—will get federal relief from tariffs on steel modules and will get a new pipeline to supply it with natural gas... 

And that it will be perfectly OK for LNG monster tankers to go through the Douglas Channel and upload LNG from Kitimat. 

But that this same bill will decree that oil tankers, which would load Western Canadian oil at the exact same port, will not be allowed to go through the exact same chanel.

That person would say that’s a double standard.

And that’s not a moratorium.

If you told that same reasonable person that there are 20,000 so-called tanker movements per year in Canada, 85 per cent of which are on Canada’s east coast. And that inbound tanker traffic, carrying foreign oil products from Algeria, Saudi Arabia and Nigeria, among others, can enter Quebec ports without issue. That of the 25 million tonnes of oil that Quebec imports per year, on oil tankers, 89 per cent goes through the ports of Quebec City and Montreal...And this, despite significant St. Lawrence beluga whale populations...

And so therefore:

That under Bill C-48, inbound, foreign oil is okay. But outbound Canadian oil is banned.

A reasonable person anywhere in the country would say that’s preposterous.

And that’s not a moratorium.

The fundamental problem with this proposed bill is its selectiveness. Why the West coast and not the East coast? Why the northern B.C. coast and not the Port of Vancouver? Because Northern B.C. is more beautiful than Vancouver? Or the St. Lawrence? Or the coasts of Newfoundland? More environmentally fragile or valued? Of course not.

Let’s also forget: Newfoundland has significant off-shore oil rigs. New Brunswick refined $1.6B worth of Saudi oil last year. Why don’t they qualify for an oil tanker moratorium? 

You can see the dilemma for Western Canada, and for reasonable people here.

Some of you questioned my colleague, Minister (Jeremy) Harrison, a few weeks ago about why we can’t just focus on the port of Vancouver...or the U.S. coast...Why we care about gaining access to northern B.C.?

The answer is: We already do focus on the Lower Mainland and U.S. coastal ports ... and we need access from anywhere we can get it...access to global markets to ease our hyper-dependency on the US. 

As some of you pointed out, the U.S. clearly benefits from Canada’s continued lack of market diversification. US refiners do access discounted barrels of Canadian crude oil and sell refined products to continental and global markets at full market price.

But we could begin to fix this situation if we built more Canadian pipelines!

That was the whole point of Energy East and Northern Gateway and Trans Mountain, and why we are so concerned about more and more delays on that project. Producers already eek out what product they can to the Lower rail, for one. But those same rail tracks are in demand from, and in competition with, other sectors as well: from potash and other mining, to agriculture. 

That’s why it’s called a transportation bottleneck. Everyone wants access. Western Canada’s regional system of pipeline and rail capacity is highly integrated, so Saskatchewan’s producers would naturally benefit enormously from any new export pipeline. 

Saskatchewan companies have become ingenious, highly creative, when it comes to working around the system with trucking...rail...and whatever ports they can get to.

They are making the best of a very bad situation.

But why we are focused on northern BC today, and its deep-water ports, and the global access that they would afford, is because they would help assuage the Canadian energy crisis. Those northern ports would give Canadian exporters a full-day export advantage (in other words, better, faster, cheaper shipping arrangements) over other Pacific ports, including ports in the Lower Mainland, to rapidly growing Asian markets. 

The Prince Rupert area, for example, would lead to a full, 36 hours faster shipping time to the world’s largest port in Shanghai, than the Port of Vancouver would. It would also avoid costly delays that routinely occur as a result of congestion of rail and ports in the Lower Mainland. 

And while we’re at it:

Northern Gateway, which—along with Energy East—was killed by this federal government, would have reached northern B.C. and would have been just that: a northern gateway to Asian markets, for B.C., Alberta and Saskatchewan producers. But benefiting all of Canada.

But Northern Gateway will never come back to life with Bill C-48. This bill would kill it forever.

Eagle Spirit will never come to life with Bill C-48. I understand that you heard, in December, from the Eagle Spirit Chiefs Council, the National Chiefs Coalition, the Indian Resource Council—who, together, represent some 200 First Nations communities. They spoke to you about how the Eagle Spirit Energy Corridor project could help reconciliation through economic empowerment. A $12 billion investment that would create a once-in-a-lifetime opportunity for the 35 First Nations along the proposed pipeline corridor—and who have indicated ‘in principle’ support for the project. 

But Eagle Spirit’s prospective port, at Grassy Point, is in the proposed moratorium zone. And as its proponents have said, “Without tankers, there can be no pipeline.” 

That’s called a wasted opportunity.

Your colleague, Dennis Patterson, Senator for Nunavut has said, “I am struck by the division and acrimony that this Bill breeds. it unnecessarily pits neighbour versus neighbour.”

That is a tragedy.

In terms of solutions that we are putting forward today, as Saskatchewan, we would suggest that you canvas and learn as much as you can from shipping stakeholders in Western and Eastern Canada about the tradition of safe tanker transport of oil products that has been achieved over the years and what excellent managers of marine traffic Canadian ports have been; and how tankers can co-exist in a clean, healthy environment that, of course, we all want as Canadians. 

Bill C-48 allows the federal government to arbitrarily exempt oil tankers, but doesn’t address other marine traffic, such as cargo ships, ferries and cruise ships, which bring with them their own, well-known carbon footprints. 

Is that fair? 

Meanwhile, let’s not forget that, worldwide, 7,400 oil tankers are currently afloat, sailing around the Galápagos Islands, the Great Barrier Reef. Jewels of the world, just like the northern coast of B.C.

The federal government could also create a tanker corridor, complete with rescue tugs and spill recovery equipment that could safeguard all shipping. 

Or create a Particularly Sensitive Sea Area (PSSA), which would protect against oil spills and safeguard coastal waters while, at the same time, not explicitly discriminate against oil shipments. 

Oil shipments from one area of the country.

Federal Minister for Trade Diversification Jim Carr, said back in November: “Our competitiveness depends in large part on making Canada the most globally-connected economy. The investments we are making will connect our people, their ideas and the products they sell to the world.”

We couldn’t agree more.

But those products, that competitiveness and globally connected economy, surely include Western energy. 

Our understanding is there are no oil-tanker moratoriums in the entire world. With this bill, Canada would have the only one. 

There are other options, other alternatives, at your disposal. Again I say: the time for sober second thought is now. 

Let this bill—which amounts to a self-imposed export ban, by Canada, on its own, Canadian oil products—die on the order paper. 

And let’s go back to the drawing board.

Thank you.