Dr. Greg Thomas reads his statement with Maureen Kirkbride, interim CEO, and Dan Baxter, Director of Policy Development, Government and Stakeholder Relations, of the BC Chamber of Commerce. Photo by Rob McKay-Dunn of the Greater Vancouver Board of Trade.
This week a panel convened by the Minister of Natural Resources conducted a series of roundtables in British Columbia on the Trans Mountain Project, the proposed expansion of an existing pipeline that will improve Canada’s ability to access world markets for oil. After a rigorous review, the project was approved by the National Energy Board last May subject to 157 conditions aimed at strengthening the project’s environmental protection and safety measures.
The chamber network showed up in force at the consultations, arguing for the local and national economic benefits of the project. The BC and Kamloops Chambers, as well as the Greater Vancouver Board of Trade, discussed the economic impact of the project on their local communities and the province as a whole. Jobs, economic stimulus, tax revenue: the project will provide a short term boost to regional and national economies, while improving the competitiveness of one of Canada’s keystone industries.
The Canadian Chamber was represented at the Economic Roundtable in Vancouver by Dr. Greg Thomas, a member of the Environment and Natural Resource Policy Team as well as the current Chair of the Surrey Board of Trade. Below is the presentation he made on behalf of the Canadian Chamber:
I am here to represent the Canadian Chamber of Commerce, a national network of over 450 local, provincial, territorial and regional Chambers of Commerce and Boards of trade representing a network of over 200,000 businesses of all sizes.
I volunteer as a member of the Chamber’s Natural Resource and Environment and Indigenous Affairs committees, and I am also proud to serve as the current chair of the Surrey Board of Trade.
Like many other oil and gas companies, Kinder Morgan is a member of the Canadian Chamber, but so are firms in the manufacturing, technology, agriculture, forestry and most other major Canadian industries. This breadth of membership means that the national Chamber cannot narrowly serve the interests of a single industry, but must promote policies and projects that will support the competitiveness of Canada as a whole.
Other participants are better positioned to speak to the direct economics of this project on the BC economy, so I will focus on why the national Chamber has made it a priority to advocate for projects like Trans Mountain for the last three years.
First, Trans Mountain would support the competitiveness of Canada’s oil industry, a cornerstone of our national economy.
Global markets will be increasingly volatile and competitive in the future. The ability to move products at low cost to tidewater will be essential for Canada’s resources to compete globally.
This matters because the oil industry is one of the most significant creators of value-added products and services in the country. According to Statistics Canada data, every worker in the oil and gas sector creates $1.36 million in value per job per year, 15 times higher than the national average for all sectors.[i]
Like other high value-added industries such as automotive and aerospace, the oil industry’s supply chains reach far beyond the oil rig or mine site. A 2012 report commissioned by the Fédération des Chambres de Commerce du Quebec found that oil sand supply chains contributed over a billion dollars to the economies of BC, Ontario and Saskatchewan, and several hundred million each to Quebec and the Atlantic provinces.[ii]
These figures encompass the impacts on small metal fabrication firms or environmental service providers. It includes bankers and lawyers on Bay street and cleantech startups in Vancouver.
Second, Canada, like many other rich countries, appears to be trapped in a cycle of low growth. GDP growth estimates for this year are 1.3% -- not enough to sustain essential job growth, pension returns and government revenue. [iii]
According to OECD research, the only way for rich countries like Canada to move out of this low-growth trap is to invest in infrastructure that will yield high returns over the long term, such as transport or energy.[iv]
The short term economic stimulus that the Trans Mountain project will provide could help kick start the Canadian economy, without spending a dime of public money.
The Canadian Chamber’s expertise is naturally on business issues, but before I conclude I would like to touch on climate change, another priority of the Chamber network.
Our membership recognizes the need to address climate change and supports a transition to a low carbon economy. The Canadian chamber has supported national carbon pricing since 2011. Electric cars and other alternatives are set to make important inroads into the market for passenger vehicles, an important source of demand for gasoline.
But British Columbians, Canadians and the growing global middle class will still need oil for many decades to come to power long-distance truck, rail, train and air transport, as well as a feedstock for essential petrochemicals and other essential products.
The Chamber network sees no reason why Canada, a democracy with strong environmental policies and regulations, should not continue to compete for this market.
Failing to build projects like Kinder Morgan will do nothing to hasten the development and adoption of alternatives to oil. What it will do is weaken the competitive edge of Canada’s energy industry and the health of Canada’s economy as a whole.
The benefit to the climate of Canada ceding markets to heavy oil producers in Venezuela, West Africa or the Middle East – producers that cannot match the Canadian businesses’ record of investment in environmental technologies – are dubious. The economic impact on Canadian families, however, would be huge.
Thank you for the opportunity to speak.
[i] Trevor Tombe. “Better off Dead : “Value Added in Economic Policy Debates”. University of Calgary School of Public Policy. https://letstalkroyalties.ca/wp-content/uploads/2015/11/10-17-2015_Value-Added-in-Public-Policy-Debates.pdf
[ii] KPMG. “Economic Impacts of Western Canada’s Oil and Gas Industry”. Federation des Chambres de Commerce du Quebec. http://www.fccq.ca/pdf/general/FCCQ-Economic-Impacts-of-Western-Canada-s-Oil-Industry_nov-2013.pdf
[iii] Hendrik Brakel. “The End of Growth”. 5 Minutes for Business. Canadian Chamber of Commerce.
[iv] Catherine Mann. “Policymakers: Act now to break out of the low-growth trap and deliver on our promises. OECD Ecoscope. https://oecdecoscope.wordpress.com/2016/06/01/policymakers-act-now-to-break-out-of-the-low-growth-trap-and-deliver-on-our-promises/