ARCHIVED - Responsible Resource Development and the Path to Shared Prosperity

Information Archived on the Web

Information identified as archived on the Web is for reference, research or recordkeeping purposes. It has not been altered or updated after the date of archiving. Web pages that are archived on the Web are not subject to the Government of Canada Web Standards. As per the Communications Policy of the Government of Canada, you can request alternate formats. Please "contact us" to request a format other than those available.

Draft Notes for Remarks
by
The Honourable Joe Oliver
Minister of Natural Resources
to the
Business Council of British Columbia
“Responsible Resource Development and the Path to Shared Prosperity”
November 28, 2012
Vancouver, B.C.

Introduction

Thank you for that kind introduction. It’s great to be back in British Columbia, to be back in Vancouver.

It’s an honour to be addressing members of the Business Council of B.C. I am especially pleased to meet with you under the umbrella of the  Agenda for Shared Prosperity, this remarkable, non-partisan, joint initiative of the Business Council and the  Chamber of Commerce. Greg [Greg D’Avignon, President and Chief Executive Officer, Business Council of B.C.], your leadership and your forward-looking vision are making a difference. Congratulations on a successful launch, and best wishes for a fruitful dialogue.

Economic Context

Canada’s Economy (National Prosperity)

Two weeks ago, my colleague, Jim Flaherty, Canada’s Finance Minister, unveiled the latest economic update. The good news is that Canada continues to lead. We are in a relatively good position, compared with most advanced countries. Thanks to Canada’s Economic Action Plan to respond to the global recession, Canada has more than recovered both all of the economic output and all of the jobs lost during the recession.

We have seen the strongest job growth in the G-7: Since July 2009, employment has increased by over 820,000. Employment is now more than 390,000 above its pre-recession high. More than 90 percent of all new jobs are full-time jobs. More than two-thirds of new jobs are in high-wage industries. We’re talking good jobs. Reliable jobs. Jobs for families. Jobs with futures.
 
Canada’s economic productivity is now significantly above pre-recession levels: in fact, the best performance in the G-7.

Personal, Household and Community Economies (Inclusive Prosperity)

I could continue in this vein — but I won’t. I don’t want macro results to obscure personal impacts. Canada is more than an economy. We’re a nation. A nation founded, not on columns of figures, but on the strength of communities and families.

To us, statistics reported at boardroom tables must be supported by the reality felt around kitchen tables. By that measure — the personal measure, the family measure — as far as we have come through the global recession, more work lies ahead.

While personal tax rates have fallen — significantly; while disposable income has risen; and while inflation is low: too much of the middle class labours under high debt. Too many families struggle with the cost of living. Too many British Columbians and Canadians worry for their futures.

The work of building a prosperous B.C. and a prosperous Canada is ambition enough. Yet today our challenge is not just economics, but inclusion. I am referring to the challenge of achieving and maintaining a prosperity that includes all, and in which all feel included.

Some British Columbians, and some Canadians, hear the word “prosperity” and think it applies to others. Not to them. Some feel that “prosperity” is for corporations, not people. This misperception is not their challenge. It is ours. Fostering a sense of inclusive prosperity, of shared prosperity, is a responsibility that Government and the business community together must shoulder.

If prosperity is to remain our goal — and I believe it must remain our goal — then we must cement a connection “between economic prosperity and personal, family prosperity,” to borrow the words of the Agenda for Shared Prosperity.

If “productivity,” or GDP, is to remain relevant as measure of performance, then people must be able to see themselves in it. They must have confidence that the metric includes their productivity: that they’ll be able to remain productive and provide for their families, securely, into the future.

It is not enough to believe, as a matter of textbook economics or blind faith, that a rising tide will lift all boats. Ordinary Canadians demand and deserve to see the proof, in their homes, in their lives, and their communities.

Inclusive Prosperity Through Resource Development

This is precisely the topic that I wish to address in the time that remains: How to advance the cause of shared prosperity, particularly in regard to our natural resources

I do not intend to address any particular resource development initiative, or to carry a brief for any specific project. As a general matter, however, we must accept that the future development of our resources will depend heavily on public confidence — on the public’s faith in the ability of government and the private sector to “do the right thing.”

The Benefits of Resource Development

Obviously, public confidence and public faith are connected to responsible resource development, and to environmental protection — but that’s getting ahead of the discussion.

Amid the heated debate over “how” — how to extract, how to transport, how to export our raw materials — we must not lose sight of the “why.”

As the world’s 36th largest population trying to support the world’s 10th-largest economy, Canadians must be a trading nation. To maintain the strength of an open economy nestled between the mountains and the Pacific, British Columbia must be a trading province.

From the earliest days, natural resources have fueled the growth and development of British Columbia and of Canada. During the 1880s, the B.C. economy developed around the gold rush and the fur trade. For years, the primary industries of forestry, mining, fishing and agriculture were pillars of the B.C. economy. Today, that economy has diversified, but the importance of resources remains.

  • Natural resources account for half of Canada’s exports.
  • Here in British Columbia, natural resources account for 80 percent of the export of goods.
  • Energy products have now overtaken wood products and pulp and paper as the province’s dominant export.
    Though I note that, through initiatives such as our Canada Wood Export Program, part of the Government’s Economic Action Plan, we are helping wood producers to expand export opportunities in overseas markets.
  • Resource industries make up 13 percent of the B.C. economy. They generate billions in royalties and tax revenue to support hospitals, schools, infrastructure and other important services in this province.

Most everyone in this room takes those statistics for granted. We cannot assume, however, that outside of this room the importance of resource development is universally accepted or understood.

However, we cannot take our prosperity for granted. For example, earlier this month, the International Energy Agency released its annual report, which found that the United States will be “almost self-sufficient in energy, in net terms, by 2035.”

We know that 98% of Canada’s crude oil exports and 100% of Canada’s natural gas exports are to the United States. We know that we command a lower price for our oil and gas because they don't reach tidewater. We know that this costs the country $50 million everyday, over $18 billion a year. We know that oil and gas accounts for $22 billion in revenues to government that support critical social programs like health care and education.

It’s never smart to have just one customer, and the data that I just cited reinforces why developing the infrastructure to build safe pipelines and transport our natural resources to new markets is essential for our future prosperity and security. And I am referring not just to the understanding that resource development is important to the macro economy, but also to the conviction that resource development will benefit the micro economy of each household.

The benefits to B.C. and Canadian households include direct employment. Resource-based industries directly support over 100,000 jobs in this province.The benefits also include indirect employment — tens of thousands more jobs in B.C..

And further indirect benefits are the services provided by provincial and federal governments and funded through royalties and tax revenues. Not to single out any particular project or industry, but merely as an example, I point to the exciting opportunities created by the export of liquefied natural gas:

  • BC LNG, partly owned by the Haisla First Nation, licensed to export up to 1.8 million tonnes of LNG per year.
  • KM LNG, licensed to export up to 10 million tonnes annually. 

A proposed pipeline. Plants in Kitimat and Prince Rupert. This fall, when I led delegations to Japan, South Korea and China, we weren’t just selling liquefied natural gas and other energy. We were building jobs in British Columbia and Canada. Construction jobs. Permanent operating jobs. Not to mention indirect jobs in other sectors.

At a personal level, at a household level, that is what resource development delivers.

Making the Case for Resource Development

Who will make the case for the benefits of resource development? We together — Government, private sector and all concerned stakeholders — must shoulder that burden.

I stress that more is required than mere public education or the typical information campaign. The need is not education, so much as demonstration: that is, demonstration of shared benefit. Delivering information is not the same as building confidence: confidence in an inclusive prosperity that touches all families and communities.

The people of this province are all British Columbians, but on this issue they’re from Missouri. The “Show Me” state. We need to show how resource development buoys 4 million personal economies and supports 1.9 million household economies. I do not fully agree with Nietzsche’s observation that if you know the “why,” you can live any “how.” In the case of resource development, not every “how” is acceptable. Conversely, the reverse certainly holds true: If the public doesn’t accept why a pipeline should transport oil or gas across the province, then no amount of how is going to overcome the objection.

Debate over the best way to develop our resources is healthy. We should not shrink from the dialogue. We must embrace it. But the discussion must be based on a common understanding of why our resources are so vitally important to all British Columbians and all Canadians. Then, and only then, can we thrash out the important questions of responsible development and environmental protection.

Environmental Protection

When it comes to protection, the questions are about what form responsibility and environmental protection will take, not whether we act responsibly to protect this beautiful province.

Development will not proceed — no development — unless it is safe and responsible, because this is where British Columbians and Canadians have drawn the line.

In September, at Port Metro Vancouver, I talked about the tough federal laws — enforceable laws, laws with backbone and real teeth — that protect the environment and ensure safety. To many British Columbians, however, the issue is not the height of the statute books, but the depth of our resolve. When the environmental heritage is at stake, we can, we will place — and we have placed — preservation and protection first.

So it was, that, two years ago, our Government, on the basis of a federal environmental review, rejected an open-pit mine that would have caused significant adverse environmental impacts. It was denied, and the proponents went back to the drawing board.

Stronger enforcement bears further witness to our resolve. As just one example, the frequency of oil and gas pipeline inspections will be increased by 50 percent. The frequency of comprehensive audits will be doubled.

For many years, in my previous life in the private sector and in the last year and a half as a Minister, it’s been my privilege to travel across Canada. My travels reinforce what has long been imbedded in my heart. This is a magnificent, beautiful country. And each part of Canada is distinctly and uniquely beautiful. So it’s understandable, and entirely appropriate, for British Columbians to insist that all new projects uphold and protect our natural heritage.

That being said, there is a key difference between the appreciation of natural beauty and the protection of natural beauty. The former is subjective. The latter must be objective. 

For environmental protection to be effective, it must be objective, measurable and scientifically sound. It’s a fact that 35,152 kilometres of pipeline already carry gas and liquids across British Columbia.

Many British Columbians will say, “we know about crude oil and natural gas, but they’re not the same as diluted bitumen.” In fact, diluted bitumen is already being piped through British Columbia. Dilbit is regularly shipped through our waters: From Westridge Terminal, across Vancouver Harbour and English Bay, then through the Strait of Georgia and Haro Strait, into the Strait of Juan de Fuca.

Many British Columbians ask whether diluted bitumen is more likely to corrode pipelines than is crude oil. Science gives us the factual answer. According to science — according to a scientific research study released just last year — dilbit is not any more corrosive than conventional crude oil. 

Many British Columbians — and this is an understandable question — many people ask whether diluted bitumen would react the same way as conventional crude oil if it ever got into water. When I was last in British Columbia, I spoke to someone from the Western Canada Marine Response Agency. He was on the cleanup crew that responded when a city worker struck the underground Kinder Morgan pipeline and bitumen made its way into the water. He said they responded quickly, put out an oil boom and laid down absorbent cloth under the spill site attached to lobster traps. Following the cleanup, they recovered the cloth and no oil had sunk. 

So we know in that instance that dilbit floated. But we need more information to answer this question. It needs to be answered by the best evidence and sound science.

Through this year’s Budget, we are investing millions — over 35 million dollars to be precise — to obtain objective, scientific, fact-based answers to this and other questions and to improve our knowledge and understanding of the risks to the marine environment and to manage them effectively.

I note that Responsible Resource Development includes upholding our moral and constitutional obligations to the First Nations. Responsible Resource Development means consulting with Aboriginal groups in a manner that is consistent, accountable, meaningful and timely. Responsible Resource Development means involving Aboriginal groups in the process from beginning to end and considering impacts on Aboriginal rights when decisions are made.

The Private-Sector Role in Responsible Resource Development

You are, and you must be, co-stewards of responsible resource development.

A few years ago, speaking to world leaders in Davos, Switzerland, Prime Minister Harper used “enlightened self-interest” to describe the behaviour of sovereign nations.
The same principle applies to businesses that practise corporate social responsibility.

Such corporate responsibility is not limited to environmental protection. As you know, it extends to every aspect of your operations:

  • Environment
  • Health and safety
  • Business ethics
  • Labour rights
  • Human rights
  • Consumer fairness
  • Respect for First Nations and for indigenous peoples in other parts of the world
  • Community development
  • And so on

These responsibilities cannot be separated. They are part of a whole.

This afternoon, I have attempted to explain how economic prosperity, personal and household prosperity, resource development, and safety, sustainability and responsibility are all intertwined.

We share the challenge of demonstrating benefits to family economies, which in turn will build confidence in responsible resource development, which in turn will produce greater benefits for families.

A difficult task, to be sure. But difficulty won’t deter us Canadians. It wasn’t a Canadian who coined this motto, but it might as well have been: “The difficult we do immediately; the impossible takes a little longer.”

Despite challenges, the future is bright. Over the next decade, current and planned major resource projects are worth 650 billion dollars. Almost 100 billion dollars of that capital investment will occur right here in B.C. That abstract figure may mean little to households, but impact will be big: hundreds of thousands of jobs for middle-class families, in every part of our economy and in every region of the province.

The challenge is here. Our shared responsibility is clear. Let’s get to work.

Thank you.