Ottawa – Remarks by the Deputy Prime Minister at the Standing Committee on Natural Resources Regarding the Trans Mountain Expansion Project:
Our government acquired Trans Mountain Corporation and the Expansion Project in 2018 because we knew it was a necessary investment that would make Canada and the Canadian economy more sovereign and more resilient. I want to highlight four areas where the project is delivering positive results for Canada.
First: This project is helping to ensure that Canada gets fair market value for our resources. One of the key ways to see the economic impact of this project is the higher price that Canadian resources are getting in the market—often measured by the price differential between Canadian oil and American oil.
In 2018, the price differential between each barrel of West Texas Intermediate and Western Canadian Select peaked as high as $50 a barrel—that’s a discount representing almost 70 per cent of the WTI price on every barrel of WCS sold. Since the Trans Mountain expansion was brought into service in the second quarter of this year, this average differential has closed, sitting at about US$12 per barrel, or just 17 per cent of the WTI price. This is really important. This is money that Canada was just giving away and this is now money that Canada has for ourselves, for Canadian workers, for provincial and federal governments to invest in the things Canadians need.
Second: This investment contributes to good jobs and economic growth across Canada.
Canadian workers in the oil and gas sector earn, on average, about $3,000 per week—almost 2.5 times the average weekly earnings in Canada overall.
The Bank of Canada has estimated that the Trans Mountain expansion will increase GDP by about 0.25 per cent in a single year. That is a considerable boost to our economy.
All of this means good jobs and more revenue for federal and provincial governments that can be used for public services that really matter to us, like health care, education, and housing infrastructure.
The pipeline is also having a positive impact on central Canada’s manufacturing industry by creating stable demand for industrial materials and products. According to the Canadian Steel Producers Association, the oil and gas sector has used about 30 per cent of all steel used in Canada.
This is just one example of how the pipeline’s benefits extend beyond Alberta—in fact, it is a national infrastructure project that is delivering economic growth and creating good jobs across the country.
Third: This project is helping get Canadian resources to world markets even as the Western alliance is constraining Russia’s access to global markets for its oil. In a very real way, this project is helping us to support the brave people of Ukraine and to constrain Putin’s ability to fight against them.
And fourth: This project is an important step towards economic reconciliation with Indigenous Peoples.
Indigenous Peoples have benefitted from the project—and will continue to do so. During construction, Indigenous Peoples represented 10 per cent of all workers on the expansion and over 20 per cent of construction contracts went to Indigenous contractors resulting in more than $6 billion awarded to Indigenous businesses and partnerships.
Mr. Chair, it is clear that the newly expanded pipeline presents economic and social benefits to Canada—and that purchasing it and getting it built and operational was an important investment in Canada’s economy now and for years to come. This project is good for our workers. It is good for our economy. It is good for our national security and the security of our allies. It is a project that Danielle Smith and Rachel Notley both support. I think that is evidence that it’s something in the national interest. I’m glad we could get it done together.
Thank you.