Canada’s regulatory system often results in inefficiency, delays, administrative burdens and unnecessary costs to both government and business, CIAC President and CEO, Bob Masterson, told the Standing Committee on Industry, Science and Technology (INDU) February 7.
The comments were provided as part of a study on regulatory modernization in response to the Federal Fall Economic Statement in November.
Mr. Masterson targeted regulatory overlap and duplication, rushed regulation that does not take industry’s perspectives for achieving goals, uncertainty and timeliness in his speech to the Committee.
“Obtaining an approval in Canada takes an average of 249 days, about double the OECD average and triple the time required in the United States. Make no mistake, this reality is well-known globally and is a strong influencer on Canada’s foreign direct investment gap,” he said. “The study being undertaken by this committee is welcome and urgently overdue.”
He pointed to the implementation of the Chemicals Management Plan and Transport Canada’s multi-faceted approach to better managing risks associated with the transportation of dangerous goods as great examples of regulatory initiatives working well in Canada. He also noted that the Ontario government had started important efforts in this area with its comprehensive Red Tape Challenge recommendations beginning to be implemented by the current government.
Alberta’s Industrial Heartland Association (AIHA) hosted its annual Stakeholder Event on Thursday, January 17 in Edmonton. CIAC was in attendance and was one of many event sponsors. Attendees heard industry updates from several companies building and operating in the region including CIAC’s newest member – Inter Pipeline and their Heartland Petrochemical Complex currently under construction. The event was attended by the Premier, Members of her Cabinet and Caucus, as well as members of the Official Opposition. The Premier reaffirmed the Alberta government’s focus on diversifying province’s economy through resource value add manufacturing and upgrading.
Mark Eramo, Vice President of Global Business Development for Oil, Midstream, Downstream & Chemical at IHS Markit was the feature speaker and focused his remarks on the state of the global chemical industry. Points of interest to the chemistry industry in Canada include:
- High crude prices and low-cost natural gas attracting North American chemical investments;
- China and US investment continues at rapid pace, with modest growth in other regions;
- Chemical Industry in a prolonged peak earnings cycle with potential risks for the mid-2020s as current strong margins in gas-based chemistry drive new investment with the potential for global economic slowdown and reduced demand;
- Decline in demand for refined products will see a shift in crude to chemicals with new refinery configurations and technology producing larger quantities of chemicals in greater scale;
- Sustainability issues for sector remain focused on carbon, however water and plastic will continue to be priority issues for the industry.
This year’s Stakeholder Event was the largest yet for AIHA with over 1,000 people in attendance. CIAC congratulates AIHA on once again raising the bar on stakeholder engagement.
The House of Commons Standing Committee on Finance’s report on the pre-budget consultations was released December 10, and includes a number of recommendations directly responsive to CIAC’s requests. Of note is Recommendation 9 (page 40) to, “Work with all other levels of government to align and coordinate efforts to create a competitive investment climate across Canada to attract world-class value-added petrochemical facilities.”
This success is a result of eight months of CIAC engagement with Finance Committee members, which included CIAC’s 2019 Federal Pre-budget Consultation submission and testifying at the pre-budget consultation hearings in October.
CIAC and CPIA sponsor a lively discussion on getting to zero plastic waste
In front of a packed house of approximately 70 people at the National Arts Centre in Ottawa CIAC and CPIA held a lively discussion with the Sixth Estate on Breaking the mold: getting to zero plastic waste on December 11.
CIAC’s Executive Vice President, Isabelle Des Chênes, opened the discussion up by framing the issue and giving a brief presentation on the broad issues at play including the benefits of plastic, Canadians’ perceptions on plastic waste and what industry can do to support solutions. “The public in Canada have been up in arms on this subject and rightly so. As manufacturers of plastic resin and plastics, we need to work with governments to educate the public about plastics’ benefits to society and the environment,” said Des Chênes.
Christopher Hilkene, CEO of Pollution Probe, then spoke about what his organization is doing to raise public awareness of the issue of plastic waste and bringing different stakeholders together to discuss solutions.
The Director of Government Relations at NOVA Chemicals, Ken Faulkner, then outlined the work that manufacturers are doing to tackle this issue, such as innovating to make plastic packaging fully recyclable and working with non-profit partners to improve infrastructure to reduce marine plastic debris in Southeast Asia.
Ryan L’Abbe, Vice President Operations, GreenMantra Technologies, brought the important element of innovation to create end markets for recycled products. He pointed out that due to a lack of supply in Canada, his company actually imports materials from the U.S. to have enough post-consumer plastic to recycle into products like asphalt and roof shingles.
Rounding out the discussion, Sean Fraser, Parliamentary Secretary to the Minister of Environment and Climate Change then spoke on the Federal government’s recent efforts to create a framework for a national strategy of reducing plastic waste and what needs to happen in the near and long-term future to tackle the issue.
Watch a full recording of the panel discussion on the Sixth Estate Facebook Live page here.
Last year’s U.S. tax reform poses a substantial risk to the long-term viability of a large portion of Canada’s petrochemical and other chemical industry, as well as the Canadian economy at large, according to a PricewaterhouseCoopers report commissioned by the Business Council of Canada and released on September 12.
The impacts of U.S. tax reform on Canada’s economy, looks at numerous sectors in the Canadian economy. Key findings indicate that the U.S. tax reforms would put 635,000 jobs (3.4 per cent of Canada’s employment) at risk and potentially reduce Canada’s GDP by $85 billion (4.9 per cent of the economy).
The petrochemical sector will be particularly hard hit. The report indicates that with the U.S. tax reform, Canada is falling even further behind the U.S. in terms of competitiveness posing a “serious risk” to petrochemical manufacturing in Canada.
“The relative attractiveness of the U.S. is reflected in the fact that, capital expenditure in chemical manufacturing has decreased by 0.3 per cent in Canada over the past five years, while increasing by 10 per cent in the U.S.,” The report states.
These findings echo the concerns raised in CIAC’s 2019 Federal Pre-Budget Submission. The submission notes that although Canada used to enjoy an advantage through its marginal effective tax rate to help overcome construction, utility, labour and logistics disadvantages, that advantage is now gone with the U.S. tax overhaul. CIAC is calling on the government to take urgent action to ensure the Canadian chemistry sector remains competitive to keep business – and jobs – within Canada.
Read more in CIAC’s 2019 Federal Pre-Budget Submission
Read the full Business Council of Canada report
Last week, CIAC began its first series of meeting with key ministries in the new Ontario Government.
The meetings provided the opportunity to reinforce the important contributions that the chemistry sector plays in Ontario’s economy and outline pressing issues the sector is facing.
President and CEO of CIAC, Bob Masterson, and Director of Government and Stakeholder Relations for Ontario, Don Fusco, met with the Ontario Minister of Finance, Vic Fedeli, Minister of Economic Development Job Creation and Trade, Jim Wilson, and Minister of Municipal Affairs and Housing, Steve Clark.
“We were able to engage in substantive dialogue on how to improve the operating and investment environment for the Ontario chemistry industry and we were pleased that we were met with very well-informed and receptive responses. This is due in part to our past relationships and briefings when the ministers were opposition critics, but also because officials have done a great job briefing up on our materials,” said Mr. Masterson.
“I was very pleased at the degree to which the new Ontario Government seems to be hitting the ground running with us. We look forward to working with the new Ontario Government to promote its ‘open for business’ mandate in our sector.”
CIAC will continue to work with the new government and provide recommendations in the spirit of continuous improvement aligned to our Responsible Care® principles. We will also work to support the Ontario Government’s effort to deliver a practical and pragmatic regulatory framework ensuring the citizens of Ontario can enjoy a sustainable future where both the environment is safeguarded and the economy prospers.