There's no problem refining oil sands bitumen in Canadian refineries. East coast refineries could refine it if there was a cheap way to get it to Montreal. Most refineries in Canada and the US are operating below capacity right now.
The real problem is cheap refining capacity in China and India due to low wages, low standards of living, no health and safety standards, less taxes, few environmental standards, government subsidies, etc . For example, the Burnaby refinery that processes raw bitumen piped from the oil sands through the existing Kinder Morgan pipeline may close because they can't refine it as cheaply as China or India who can outbid them for the purchase contracts, even with tanker shipping costs. If they twin the KM pipeline to Burnaby, the Burnaby Refinery will certainly close and we'll lose those jobs and west coast capacity to refine our own Canadian oil in a world shortage.
Why such a rush to exploit and exhaust our domestic oil reserves when their value as a commodity and future oil security grows the longer they are left in the ground and world oil reserves begin to deplete? Short term economic growth and profit.....mostly China's though.