Standing Committee on Foreign Affairs and International Development (FAAE)
feat. Joe Calnan
October 25, 2023
TESTIMONY VIDEO (Comments by Joe Calnan begin at 17:27:45)
Mr. Chair, members,
Thank you for the invitation to appear today.
In my opening remarks, I would like to emphasize that it is in Canada’s national interest to support our allies and our European and Asian partners by providing them with access to Canadian energy. Europe has been the primary target of Russian economic warfare through the manipulation of energy supplies, and will require further assistance over the coming decades not only to ensure that Ukraine wins this war, but also to enable the reconstruction and integration of Ukraine into the European Union. If Europe fails to do so because of our lack of support, the resulting Russian victory will undermine the international rules-based order which Canadian security and trade depends on.
I would like to underline three important points concerning Canada’s role in the global energy system.
First, Canada is a firmly established player in the international supply of many fuels, including uranium, natural gas, and oil. Our role in the security of the global energy system is often masked by our broad energy integration with the United States, but our influence will become more visible upon the introduction of major new energy export facilities in British Columbia.
Second, notwithstanding Canada’s strong role in maintaining global energy security, the Federal government can do more to assist the European Union in its REPowerEU Plan and eliminate the influence of Russian fuels in Europe’s energy systems.
And third, though Canada has a variety of policy options to assist projects meant to support Europe, Canadian foreign policy priorities do not guide private investment decisions. That being said, the Canadian Federal Government has historically played a central role in improving the economics of strategic projects meant to further Canadian national interests.
These points are highly relevant when discussing Canada’s future role in supplying energy to Europe.
Turning to the current situation in Europe, we should note that the European Union has proven to be unexpectedly resilient to cutoffs of Russian energy. We underestimated Europe’s ability to adapt to sudden shocks, and its commitment to reduce its energy usage in response to the crisis, as seen in its dramatic decline in natural gas consumption. In sustaining much of the direct impact of Russia’s economic war with the West, the countries of the European Union have demonstrated a deep resolve to defend Ukrainians from Russian aggression, and to safeguard the international rules-based order.
This resolve has come at a cost. The European Union’s economic recovery from the pandemic has slowed dramatically as a result of the energy price spike. Energy price uncertainty has led energy intensive industries in Europe to shift investment elsewhere. NATO’s European members currently face the daunting prospect of helping ensure Russia’s defeat in Ukraine, followed by Ukrainian reconstruction and integration into the European Union, while undergoing persistent economic stagnation.
How can we assist our allies in Europe?
To an extent, Canada is already helping. Current Canadian energy supplies provide a powerful buffer against supply disruptions for many fuels and critical minerals. Canada exports nearly as much oil to the United States as Russia exported to Europe prior to the beginning of the war. That being said, the Federal government can and should encourage the Canadian energy industry to do more, including on the supply of oil, liquefied natural gas (LNG), critical minerals, and hydrogen.
The future of Canada’s support for Europe depends on infrastructure and initiative. Canada has the resources required to meet Europe’s needs, but these resources are far from where they are needed.
For example, a major complication for LNG export out of the East Coast is the lack of pipeline infrastructure connecting Canada’s natural gas grid to the Maritimes. Efforts by the Federal Government to connect the Maritime provinces with our gas grid could come with the triple benefit of improving local energy security, enabling the phase-out of coal-fired power stations, and improving the case for LNG export.
Canada has a long history of Federal support for nation building infrastructure. Our resources can again be marshalled in support of our allies and partners on the other side of the Atlantic. All we need is the will.
Thank you again, and looking forward to any questions.