432-00549 (Natural resources and energy)

The Government of Canada thanks the petitioners for expressing their views regarding Western Canada’s petroleum industry.

Crude oil is a globally-traded commodity for which purchasing decisions are dictated by supply and demand fundamentals. Canada’s market-based energy framework allows the private sector to determine crude oil and petroleum product flows. Companies make their own decisions on market conditions. Canada’s energy policies are firmly rooted on the principle that well-functioning markets are the best way to direct investment and production decisions. Limiting refineries’ ability to access global crude sources would go against this principle.

Decisions pertaining to the purchase of crude oil by refineries depend on the price and availability on the global market, as well as choosing the type of crude oil that is well suited for their specific refinery configuration and operating requirements. Due to the cost to transport Western Canadian crude to Eastern Canada, Eastern Canadian refineries choose to import foreign crude oil as it is more economical. In 2020, Canadian refineries imported 600,000 barrels per day of crude oil. Seventy-one percent of Canadian crude oil imports came from the U.S., which is the result of having an integrated energy market. This trade helps to ensure that adequate supplies are available at the lowest cost for consumers.

In recent years, Eastern refineries have had increasing access to domestic crude sources. The reversal of Enbridge Line 9 pipeline has enabled the flow of 300,000 barrels per day of crude oil to refineries in Quebec. To ensure access for Eastern refiners to domestic crude sources, the Government of Canada is supporting the replacement of Enbridge’s Line 3 pipeline, as well as advocating for maintaining operations on Enbridge’s Line 5, which supplies refineries in Ontario, Quebec and neighbouring U.S. states. Refineries on the East Coast also have access to offshore oil produced in Newfoundland and Labrador, which increased with the coming into service of the Hebron project, an offshore oil field estimated to contain more than 700 million barrels of recoverable resources.

In 2020, the Government of Canada provided more than $2.8 billion to support the petroleum sector during theCOVID-19 pandemic, including $1.7 billion for orphan and abandoned well reclamation in Western Canada. This funding is helping to retain and create approximately 10,000 well-paying jobs while enhancing the sector’s environmental performance so it can continue to play a key role in Canada’s clean-growth future.

As noted by the undersigned, it is anticipated that Canadian oil and gas will play a key role in supplying to the world’s future energy needs, even as many countries commit to achieving net-zero emissions by 2050. The government supports international market access for Canadian oil. The government is taking action to ensure that new infrastructure is built, including by committing resources to continue construction of the Trans Mountain Expansion project since purchasing it in 2018.

The Government of Canada also recognize that the Canadian oil and gas sector has made strides in reducing its emissions, achieving a 36 percent reduction per barrel in 2018 compared to 2000 levels. The government will continue to support oil and gas decarbonization through its funding programs, which include the Clean Growth Hub, the Strategic Innovation Fund’s Net-Zero Accelerator Program and the Emissions Reductions Fund.