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Notes for Remarks
The Honourable Joe Oliver
Minister of Natural Resources
British Columbia Chamber of Commerce
January 23, 2012
Good morning, everyone. Thank you to the British Columbia Chamber of Commerce for the opportunity to be here this morning. I want to acknowledge again, Senator Gerry St. Germain and also former Environment Minister Barry Penner. I’m very pleased to have you both here and everyone else.
Let me say it’s always a pleasure to visit Vancouver, especially in January.
Of course, there’s a lot more to Vancouver than the climate. There’s the natural beauty and the dynamic culture, the great restaurants and on and on it goes. For a Torontonian, it’s a bit depressing, actually.
But this city is one of Canada’s great economic engines and our biggest gateway to the huge economic opportunities of the growing Asia–Pacific market. These opportunities represent the potential for hundreds of thousands of jobs in Canada and literally trillions of dollars in economic activity here and right across the country.
I was in China and Japan last fall. I met Premier Christy Clark who was there with a very large and impressive delegation from Canada’s forest sector, and I witnessed first-hand the massive appetite in the Asia–Pacific region for Canada’s natural resources, especially in China. And, while there, I attended a ceremony marking the completion of a milestone project: China’s first four-storey wood-frame structure. Canada played a key role in providing its expertise in engineering, architectural design and wood-frame construction. This joint Canada–China project was built using B.C. wood, and it represents an affordable solution to China’s growing housing needs and a great opportunity for Canada’s forest industry.
Many of you are aware that China is already the fastest-growing market for Canadian wood products. The number of shipments to China has risen almost 500 percent since 2007. B.C. is now selling almost as much softwood lumber to China as it does to the U.S.
That kind of success doesn’t just happen. It’s the result of hard work by players across the sector and the outreach we’ve done with the forest industry and the Province of British Columbia and others through initiatives like our Canada Wood Export Program. The result is that thousands of British Columbians are working in forest communities across the province to service this growing market.
In Japan, I visited the newly constructed Port of Sendai to commemorate the arrival of B.C. lumber, the first shipment of foreign lumber since the devastating March 11 earthquake and tsunami. I also toured a temporary housing site for residents displaced by these disasters. This site comprises 95 units built with B.C. lumber.
I was pleased to join with the Government of British Columbia and representatives from Canada’s forest industry to announce $4.5 million in support for the Canada–Tohoku Reconstruction Project. These funds will be used to support the construction of community facilities such as schools, elderly care centres and so on in the Tohoku region, also incorporating high-quality Canadian wood.
Canada’s forest sector is enjoying real success in the Asia–Pacific, and there remains tremendous opportunity. Over time, our ability to grow and diversify markets for wood products through market development and promotion in this region is virtually unlimited. And it’s not just forest products.
Canada is a global leader in mining. We produce over 60 minerals and metals and are a world-leading exporter. Canada is the world’s largest producer of potash; the second-largest producer of uranium; in the top five countries of the world in the production of aluminum, molybdenum, nickel, platinum metals, salt, sulphur, titanium concentrates and zinc; and we rank third in the production of diamonds.
The value of Canada’s mineral production in 2010 exceeded $41 billion and contributed almost $35 billion to Canada’s mining processing industries’ GDP and $18 billion to our trade surplus.
I’ll be speaking later this morning at the Association of Mineral Exploration B.C. Roundup 2012, an event that’s become one of the biggest and most important exploration and mining shows in the world. They’re expecting more than 7,000 delegates from close to three dozen countries, with a good deal of them from the Pacific Rim. For Canada, for B.C. and for Vancouver, a city that is one of the capitals of the mining world, that’s another great opportunity both in terms of exports and participating in mineral development in Asia–Pacific markets. An even greater opportunity lies in the diversification of markets for Canadian energy in the Asia–Pacific region.
Canada’s resources represent a strategic asset for our nation. Energy accounts for seven percent of gross domestic product and growing. It’s importance as an economic driver will increase in the future because Canada is an energy superpower. We have abundant energy resources of all kinds. We are the second-largest producer of uranium. We’re the third-largest producer of natural gas and hydroelectric power. Canada is the sixth-largest producer of oil, and we are growing in the renewable energy sector. We are, by far, the largest supplier of energy resources to one of the world’s largest markets — the United States.
Canada’s proven oil reserves at 174 billion barrels are the world’s third-largest, and 98 percent of it is in our oil sands. Here in British Columbia, it’s estimated there’s enough shale gas in the northeastern part of the province to meet Canada’s needs for a hundred years.
With the future in mind, we also want investment in renewable energy and energy efficiency to continue to grow. Since 2006, the Government of Canada has invested more than $10 billion in green infrastructure, energy efficiency, clean energy technologies and the production of renewable energy and fuels.
A sound and responsible approach to energy will build on innovation and draw on all our resource endowments. It will advance our contribution to the global fight to reduce greenhouse gas emissions.
But we must be realistic. The hard fact is that the global economy runs on fossil fuels, and on oil in particular.
The International Energy Agency, or IEA, predicts that, even under the most stringent greenhouse gas policy scenario, oil will remain the world’s dominant source of energy for at least the next 25 years. Far from declining, the IEA projects that global oil consumption will rise by more than 13 percent by 2035 to some 99 million barrels a day. We just cannot turn off the tap. That would create economic chaos and relegate more than a billion people around the world to decades of energy deficiency.
Opportunity for Canadians
So, what does this mean to Canada? Consider that today the oil sands alone are responsible for 480,000 jobs. Those jobs are in every sector of the economy: skilled trades, manufacturing, clerical jobs, financial services — everywhere. Here in B.C., the oil sands contribute about $1.1 billion to the province’s GDP annually and support more than 17,000 jobs.
And it’s more than jobs. Over the past five years, oil and gas extraction has contributed an average of $22 billion to government revenues — $22 billion each year to help fund everything from education to health care and to roads and bridges. Pipelines that carry energy to the marketplace are also major generators of economic activity.
The Keystone XL Pipeline extension to carry Canadian oil to refineries on the Gulf Coast of the United States would create thousands upon thousands of jobs both in the U.S. and Canada and contribute to national security in the U.S. We continue to believe this project will be beneficial to both countries. So we were very disappointed last week when President Obama refused to approve Keystone.
However, it is clear that the process is not over. We remain hopeful that this project will ultimately be approved. But this decision underlines the critical importance of diversifying our markets to ensure the prosperity and security of Canadians for decades to come. Hence the importance of building the infrastructure to transport our oil and gas to the Asia–Pacific market.
The Northern Gateway Pipeline would represent an investment of $5.5 billion, creating thousands of jobs here in B.C. during construction and additional long-term jobs to operate it. In fact, a recent study from the University of Calgary’s School of Public Policy estimates that opening the Asia and California markets to Canadian oil through the West Coast could add as much as $132 billion to Canada’s GDP between 2016 and 2030 as a result of higher international prices compared to U.S. prices.
The expanding economies of Asia are also an obvious market for Canada’s natural gas to ports on the West Coast. B.C.’s first liquefied natural gas export terminal could potentially be in operation by the end of next year.
We can see $500 billion or more in new investment in energy and mining projects over the next 10 years, leading to hundreds of thousands of new jobs and benefits right across the country. It’s our job, our responsibility as a government, to make sure those potential benefits are realized for Canada.
Given the importance of market diversification to jobs and the economy, next month Prime Minister Harper and Minister Ed Fast, our International Trade Minister and one of my B.C. colleagues in the House of Commons, will be travelling to China to discuss ways to further our trade relationship.
And, as you know, from the beginning, our focus as been on making Canada a magnet for investment. And we’re succeeding. We set the foundation for growth and economic resilience, lowering personal and corporate tax rates, paying down debt, containing expenditures, reducing red tape, promoting free trade and innovation.
Today, while some countries are looking to protectionism to stabilize their economies, Canada is lowering trade barriers. While others turn to higher taxes to pay down deficits, Canada can offer the lowest corporate overall tax rate on new business investment in the G-7. While many countries are confronting brutal public sector cuts, Canada can take measured steps without undermining our most important social services.
It’s clear we’re on the right track. Forbes Magazine recently named Canada the best country in the world in which to do business. Both the IMF and the OECD predict Canada’s economic growth will be among the best this year and next. Real GDP is now significantly above pre-recession levels, and our economy has generated some 600,000 jobs since July of 2009. Moreover, Canada is the only G-7 economy to have more than recovered both all the output and all the jobs lost during the recession.
And that is why we will continue to focus on our low-tax plan for jobs and growth, including a return to balanced budgets over the medium term. This is essential to maintaining Canada’s advantage in the global economy and to ensuring we have maximum flexibility to respond to what the world may have in store for us.
Unfortunately, there are some radical environmental groups that would seek to block this opportunity to diversify our trade. Their goal is to stop any major resource project, no matter what the cost to Canadian families in lost jobs and economic growth. No forestry, no mining, no oil, no hydrocarbons, no more hydroelectric dams. These groups threaten, as I said before, threaten to hijack our regulatory system to achieve their radical ideological agenda. They seek to exploit any loophole they can find, stacking public hearings with bodies to ensure that delays kill good projects.
The regulatory process itself is also unpredictable and needlessly complex. Timelines are often extended, and delays are commonplace and excessive. Investors need timely decisions. If proponents are forced to wait too long for regulatory decisions, they will look for other opportunities to pursue.
For example, the approval of the Mackenzie Gas Pipeline took almost nine years. The Joslyn Mine Project took nearly six years. In comparison, the western expansion of the nation-building Canadian Pacific Railway under Sir John A. Macdonald took four years.
Under our current system, building a temporary ice arena on a frozen pond in Banff required the approval of the federal government. This delayed the decision by two months — two valuable months — to assess something that thousands of Canadians have been doing for over a century.
It is possible that regulatory reviews can be done in reasonable time without compromising the rigour or standards of the process and the ability of interveners here in British Columbia and elsewhere, including First Nations, to be heard.
It’s crystal clear to me that we need to put an end to unreasonable delays. Delays can jeopardize the viability of projects and harm our reputation as an attractive place to do business. Our Government is committed to a regulatory system that ensures sound environmental protection and respects the right of people with a legitimate interest, including Aboriginal rights. We can do that and also have realistic timelines that facilitate economic prosperity. These goals are not mutually exclusive. You can have rigorous, predictable and timely reviews with a full range of perspectives to be heard. But we can’t do these things under the current regime, where the process is unpredictable and timelines are often missed.
And that’s why regulatory improvement has been a priority for our Government from the beginning. We’ve implemented a number of innovations to enhance the performance of the regulatory system for major projects. But they are no more than first steps. We must, and we can, do more.
The really fundamental modernization we need cannot happen without system-wide legislative changes and greater collaboration with provincial and territorial governments. That process is underway. And when I met with my provincial and territorial counterparts last July in Kananaskis where we reached broad agreement on the need to step up our cooperation on the essential areas of regulatory approval. The ultimate goal is clear: one project, one review, in a clearly defined time period.
So, ladies and gentlemen, Canada has huge oil and gas reserves. The time to capitalize on these resources and diversify our energy markets is now. It’s in our national interest. If Canada does not move to supply the burgeoning Asia–Pacific market for energy, someone else will, and Canadians will have lost out on billions upon billions of dollars in economic benefits that will support our quality of life for generations. It would be the height of irresponsibility for any government to stand back and allow that to happen. I can promise you, our Government will stand up for Canadians.
Thank you very much.
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