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Results: 1 - 15 of 62
Marc-André Viau
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Marc-André Viau
2020-06-18 16:48
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Thank you, Madam Chair.
Distinguished members of the Standing Committee on Industry, Science and Technology, thank you for having us here today. My name is Marc-André Viau, and I am the director of government relations at Équiterre. I will be sharing my time with Ms. Tzeporah Berman, from Stand.earth.
We are here today as part of this committee's study on foreign investment, following the adoption of the motion. Our contribution to the work of this committee is to present to you the results of a study that my colleague conducted, and with which Équiterre has partnered, on foreign ownership of the oil sands.
This is a report that shows that 70% of the oil sands are foreign-owned. So we're wondering if it's really still a Canadian resource.
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Marc-André Viau
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Marc-André Viau
2020-06-18 16:49
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I'll try, Madam Chair.
If profits are increasingly going into the pockets of foreign investors, then the question arises as to who benefits from this operation. Is it Canadians, who have to foot the cleanup bill? My colleague will talk more about this in a few minutes.
Now, with respect to the motion passed and the specifics of the study, our report provides some answers as to the extent to which firms in strategic Canadian industries have depreciated as a result of the COVID-19 crisis.
As you will see, the loss in the value of oil sands companies predates the pandemic, and we invite the committee members to consider the reasons for this devaluation.
In addition, if the phenomenon predates the pandemic, committee members are invited to consider a second element of the motion, namely whether Canada should impose a temporary moratorium on acquisitions by the state-owned enterprises of totalitarian countries, in connection with the COVID-19 pandemic.
We also invite committee members to comment on why such a moratorium is more relevant now than it was in 2012 when the government approved CNOOC's purchase of Nexen. This raises the question of whether the nature of the political regime from which the investment is made is significant and whether this could be correlated with the devaluation.
Finally, the assessment thresholds in the Investment Canada Act are appropriate for a net benefit review. We support a review of the net benefit criteria as defined in section 20.
We invite elected officials to review paragraph 20(e), which deals with the compatibility of investments with national industrial, economic and cultural policies.
Considering that industrial, economic and cultural policies are increasingly linked to environmental policies, and considering Canada's progressive trade agenda, I think it would be good to include the concept of environmental compatibility in section 20 so that we can really talk about net benefits to Canada.
I now give the floor to my colleague Tzeporah Berman.
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Tzeporah Berman
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Tzeporah Berman
2020-06-18 16:51
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Madam Chair, thank you very much for having me here today.
I've been asked to speak briefly on the results of our investigative study of ownership and financial benefits from the oil sands.
I will say a quick word on methodology. This report is based on data from Statistics Canada, the oil companies' annual and quarterly reports, and data obtained from the Bloomberg terminal.
The global COVID-19 pandemic has devastated the global economy and plunged the price of oil to record lows.
I will provide a bit of context as to why we did this particular research. Even before the world was turned upside down by the first global pandemic in a century, as my colleague noted, the oil and gas industry in Canada, despite rising production levels, was cutting jobs, paying less in royalties, while demanding higher and higher subsidies. To be specific, despite increasing oil sands production, the number of jobs created by the oil and gas sector has continued to decline.
Since 2014, the industry has shed 53,000 jobs. In addition, reclamation of the oil sands, conventional oil and gas wells and pipelines in Alberta is now estimated to cost at least $260 billion in liabilities. There is increasing concern that taxpayers, not polluters, will be left holding the bill for the cleanup of this massive toxic liability.
Finally, in addition, using WTO definitions, ISED studies are showing us that the federal government is subsidizing the industry with billions of dollars to producers, not consumers, providing disproportionate advantage to fossil fuel producers over renewable energy.
For many years, industry lobbyists and spokespeople have argued that increased support and greater subsidies were fair because we all benefit from the oil and gas industry. While Canada has enjoyed many benefits of the oil and gas industry, this investigation reveals that the majority of profits from the industry are leaving the country.
We now know that most oil sands production is not owned by Canadians. Ten of the 14 publicly traded companies invested in the oil sands are headquartered in Canada, but only two of those are majority owned by Canadians.
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Tzeporah Berman
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Tzeporah Berman
2020-06-18 16:54
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I'll go right to the summary, then.
We found that 70% of oil sands production is owned by foreign companies. Foreign-controlled operational profit in the oil and gas sector doubled between 2012 and 2016. That's 3.5 times the economy-wide average. Even for the big five oil sands companies, through the first three quarters of 2019, their profit rate was 14.2%, almost double the Canadian industry average. They're doing well. They're making record profits. The majority of these profits are leaving the country.
Thank you.
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View Simon-Pierre Savard-Tremblay Profile
BQ (QC)
Good evening.
Thank you, Madam Chair.
Mr. Viau, thank you for your presentation on behalf of Équiterre.
You mentioned in your report that a major part of the oil sands industry was foreign-owned. I would be curious to have the figures as well as the trend because, in 2016, I read a text by Mr. Daniel Breton, Quebec Minister of Sustainable Development, Environment, Wildlife and Parks in 2012, in which he stated that fewer and fewer foreign companies were interested in the oil sector. I should point out that this was about the oil sector in general, not just the oil sands. That may be the difference; you may or may not confirm it, since you are the expert.
Mr. Breton indicated that, in the end, there were fewer and fewer royalties, and that the large and growing share was in fact pension funds. In other words, the pensions of Canadians and Quebeckers were at risk. In fact, the Caisse de dépôt et placement du Québec jumped into this for a while. We were putting pensions at risk for this sector which, in the end, was anything but interesting in the long term.
I'd like to get your comments on that.
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Marc-André Viau
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Marc-André Viau
2020-06-18 17:18
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Thank you very much for the question, sir.
I will answer, and then I'll give the floor to my colleague so she can complete my reply.
Our study shows that 70% of production is controlled by foreign interests. In terms of growth, control of operating profits is said to have increased from 31.6% in 2012 to 58.4% in 2016. These are profits that go into the pockets of foreign interests. There is certainly an increase in this area. On the other hand, there is a decrease in jobs, 53,000 fewer jobs compared to the peak in 2014, and an increase in the cost of cleaning up orphaned wells. So there is a combination of factors.
Maybe you want to add a word on that?
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Tzeporah Berman
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Tzeporah Berman
2020-06-18 17:20
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You are right that there has been a major flight of IOCs from the oil sands. Over the last five years, we've seen about $30 billion to $50 billion from major international oil companies pulling out of the oil sands, companies like Statoil, Total, etc. We've also seen major investment houses and insurance houses make statements saying they will no longer insure oil sands or related activities, and they will no longer invest in oil sands or related activities, because of the high-carbon nature of our oil, some because of concerns relative to indigenous rights as well.
Despite foreign ownership pulling out of the oil sands directly, the ownership of the existing companies, the investors in the existing companies, still tops 70%. This is because of increased investment by Chinese national oil companies, which now control 5.2% of oil sands production, which is 3.5 times more than the majority of Canadian-owned companies. American interests now own more than 52% of oil sands production, more than twice the number of Canadian shareholders, and more than all other non-U.S. investors combined.
We looked at each company, and looked at their percentage that was Canadian-owned. If you look at the average Canadian ownership within the eight largest Canadian companies, it's only 18.8%.
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View Alexis Brunelle-Duceppe Profile
BQ (QC)
All right.
This is a question for everyone. It is not really a rhetorical question, it is a question that we, the members of the Bloc Québécois, are asking ourselves.
What price must producers of oil sands fuel get to turn a profit?
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Pierre Gratton
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Pierre Gratton
2020-05-28 16:08
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It depends on the producer. There are some producers who can keep going at the current price. It is difficult, but it is possible. For others, it is not profitable. The price must be higher.
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View Alexis Brunelle-Duceppe Profile
BQ (QC)
What I am understanding is that there is no base price. It depends on the producer. At this time, it is not profitable for most.
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Pierre Gratton
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Pierre Gratton
2020-05-28 16:08
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Our members are oil sands producers who have been established for years, even decades, and they have covered most of their capital costs. For them, it is more profitable now than it is for others. It depends on the company.
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View Raquel Dancho Profile
CPC (MB)
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2020-02-27 11:10
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Thank you, Minister, for being here today.
I would like to discuss with you women employed in untraditional sectors, something you know much about. I appreciate the focus in your opening remarks on the importance of gender-based analysis for women, particularly in untraditional sectors.
I was interested to learn as I was researching your department and the work you've done about a program your department undertook several years ago called the mining and refining for women pilot project. It was a 30-month mentorship project, with the goal to retain and advance women's employment in non-traditional roles by Teck Resources' zinc and lead mining operation in Trail, B.C. As you know, women are not well represented in the trades, particularly in mining. This project, funded by your department, was looking to help women close that gender equality gap. It received resoundingly positive feedback from the women involved. I was very encouraged to see that your department takes women in untraditional sectors very seriously and that this is really in line with your mandate to improve gender equality in Canada. I appreciate, with this program, that your department wants women to succeed in mining.
Given all the success women had with this project, I'm curious to hear your thoughts on the Teck Frontier mine. The project presented a mass of high-paying employment opportunities for women, for local first nations and women in the mining sector. Of course, it's well understood that the decision on the Teck Frontier mine was to be made by cabinet and by you this past Tuesday, February 25. Although we know the project did not go forward, and we were given notice two days' prior, your government had the proposal since July 2019.
Can you provide to the committee the gender-based analysis plus for the Teck Frontier mine project?
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View Maryam Monsef Profile
Lib. (ON)
Raquel, I wish you all the best in your first term here in Ottawa. I'm sure you're going to make a world of difference.
The Teck decision to pull out was their decision and, as we all have been discussing over the past few weeks, it must have been a very difficult decision.
I can tell you that they had done an excellent job with their indigenous consultations, and that is a model for future projects to move forward on.
On the initiatives around women's economic security, some of the pilots you mentioned—
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View Raquel Dancho Profile
CPC (MB)
View Raquel Dancho Profile
2020-02-27 11:13
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I'm sorry, Minister, to cut you off.
I just want to know if you can table the gender-based analysis report for the Teck Frontier mine.
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View Maryam Monsef Profile
Lib. (ON)
What came out of the joint panel is available online. Anything that comes out of cabinet—this one isn't one—is, of course, protected by cabinet confidence.
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