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Energy

Canada wallows on LNG sidelines, paralyzed by Ottawa’s onerous regulatory system

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7 minute read

From the Frontier Centre for Public Policy

By Lee Harding

Mitsotakis said Greece has built a major facility outside the city of Alexandroupolis to process incoming LNG tankers. He said Greece will pump LNG to the rest of Europe and needs more at home as the country abandons coal.

When it comes to fossil fuels, the world wants what Canada’s got. The problem is, Prime Minister Justin Trudeau doesn’t care.

Fresh proof came with the recent visit of Kyriakos Mitsotakis, the first Greek leader to come to Canada in more than 40 years.

According to the office of the Prime Minister Trudeau, Mitsotakis was simply here to march in Montreal’s Greek Independence Day Parade, discuss “shared interests” and cut the ribbon as Greece purchased Canadian-made firefighting planes.

But, during an interview with CTV, Mitsotakis said his country would “of course” like to start importing Canadian liquified natural gas (LNG).

“We are a big entry point for LNG, not just for the Greek market, but also for the Balkans, for Eastern Europe. Theoretically, we could even supply Ukraine,” said Mitsotakis.

“In principle, yes, we are very interested in obtaining LNG at competitive prices.”

Mitsotakis said Greece has built a major facility outside the city of Alexandroupolis to process incoming LNG tankers. He said Greece will pump LNG to the rest of Europe and needs more at home as the country abandons coal.

Much of Europe’s energy has traditionally come from Russia or Middle Eastern autocracies. More than a decade ago, author Ezra Levant made the case for Canada’s “Ethical Oil” as a better alternative. Canada’s status as a democratic state that respects human rights and extracts oil with a minimal environmental footprint is as good as it gets. Mitsotakis, a Harvard-educated investment banker, understands that quite readily today.

“Canada is a country (for) which we share so many values,” said Mitsotakis. “I think we see eye-to-eye on many of the challenges that we face.”

Still, there was no mention of energy exports in Trudeau’s public comments regarding Mitsotakis, nor in official government communications about the visit.

Mitsotakis can take little consolation that his treatment is not unusual, as true as that may be. In the past 18 months, both the Japanese prime minister and the German chancellor returned home without official assurances that Ottawa was eager to offer bulk quantities of Canadian LNG.

Japanese Prime Minister Fumio Kishida came to Canada in January, 2023 making no secret of his “high expectations” to reach an LNG export agreement with Canada.

In August 2022, German Chancellor Olaf Scholz came to Canada hoping to reach an LNG deal. “Canada is our partner of choice,” Scholz said at the time.

Somehow, Trudeau said at a press conference with the German leader that there was no “business case” for LNG exports to Europe. Instead, he took the chancellor to an empty field in Newfoundland that was the chosen site for a future Canadian facility to export carbon-neutral hydrogen.

That will help Germany a little, but not nearly enough. The country turned to Qatar and signed a 15-year LNG export deal.

Canada is currently the world’s fifth largest producer of natural gas. But, as is the case with oil, facilities to sell it overseas are very limited. Canada has no LNG export facilities currently operating. Any LNG exports to Europe would have to go through a US export terminal.

Kitimat, BC will open a major export facility in early 2025, but plans to build an LNG pipeline to ports on the East Coast have fallen apart due to high costs.

On Monday, Alberta Energy Minister Brian Jean said “onerous” regulatory procedures were more to blame.

“With massive natural gas reserves, Canada can no longer wait on the LNG sidelines, burdened by an onerous regulatory system. Our allies and trading partners need us. We must have more LNG export facilities approved and built,” Jean said in a statement.

Jean is right. Canada has scuttled one opportunity after another during the Trudeau era, first by smothering pipeline development in onerous regulations. The Northern Gateway pipeline was the only one the nation banned, citing environmental concerns off the coast of northern B.C., despite the fact that 50 tankers passed the same waters every day with exports from Alaska.

Other proposals, such as the Energy East pipeline, were held up in red tape until its proponents decided the project wasn’t worth it. A 30,000-page application went for not, as did the hope that refineries in the Maritimes could refine Canadian products instead of those from the Middle East.

The trans mountain pipeline was also bound up until the government bought it, after which its progress still went painfully slowly. Years late and six times over-budget at a cost of $34 billion, the “long delayed” pipeline is finally ready for crude deliveries.

Bill C-69, dubbed by former Alberta Premier Jason Kenney as the “No More Pipelines Act”, was declared unconstitutional by the Supreme Court of Canada last fall. The development is welcome but cannot restore lost time.

Canada remains poorly positioned to capitalize on another historic opportunity–the European thirst for oil as it tries to distance itself from Russia. Unfortunately, this problem seems more convenient to Ottawa than not. The Canadian government seems more interested in having zero carbon emissions even if that means zero economy. Too bad that makes zero sense.

Lee Harding is a Research Fellow at the Frontier Centre for Public Policy

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Business

Premiers fight to lower gas taxes as Trudeau hikes pump costs

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From the Canadian Taxpayers Federation

By Jay Goldberg 

Thirty-nine hundred dollars – that’s how much the typical two-car Ontario family is spending on gas taxes at the pump this year.

You read that right. That’s not the overall fuel bill. That’s just taxes.

Prime Minister Justin Trudeau keeps increasing your gas bill, while Premier Doug Ford is lowering it.

Ford’s latest gas tax cut extension is music to taxpayers’ ears. Ford’s 6.4 cent per litre gas tax cut, temporarily introduced in July 2022, is here to stay until at least next June.

Because of the cut, a two-car family has saved more than $1,000 so far. And that’s welcome news for Ontario taxpayers, because Trudeau is planning yet another carbon tax hike next April.

Trudeau has raised the overall tax burden at the pumps every April for the past five years. Next spring, he plans to raise gas taxes by another three cents per litre, bringing the overall gas tax burden for Ontarians to almost 60 cents per litre.

While Trudeau keeps hiking costs for taxpayers at the pumps, premiers of all stripes have been stepping up to the plate to blunt the impact of his punitive carbon tax.

Obviously, Ford has stepped up to the plate and has lowered gas taxes. But he’s not alone.

In Manitoba, NDP Premier Wab Kinew fully suspended the province’s 14 cent per litre gas tax for a year. And in Newfoundland, Liberal Premier Andrew Furey cut the gas tax by 8.05 cents per litre for nearly two-and-a-half years.

It’s a tale of two approaches: the Trudeau government keeps making life more expensive at the pumps, while premiers of all stripes are fighting to get costs down.

Families still have to get to work, get the kids to school and make it to hockey practice. And they can’t afford increasingly high gas taxes. Common sense premiers seem to get it, while Ottawa has its head in the clouds.

When Ford announced his gas tax cut extension, he took aim at the Liberal carbon tax mandated by the Trudeau government in Ottawa.

Ford noted the carbon tax is set to rise to 20.9 cents per litre next April, “bumping up the cost of everything once again and it’s absolutely ridiculous.”

“Our government will always fight against it,” Ford said.

But there’s some good news for taxpayers: reprieve may be on the horizon.

Federal Conservative leader Pierre Poilievre’s promises to axe the carbon tax as soon as he takes office.

With a federal election scheduled for next fall, the federal carbon tax’s days may very well be numbered.

Scrapping the carbon tax would make a huge difference in the lives of everyday Canadians.

Right now, the carbon tax costs 17.6 cents per litre. For a family filling up two cars once a week, that’s nearly $24 a week in carbon taxes at the pump.

Scrapping the carbon tax could save families more than $1,200 a year at the pumps. Plus, there would be savings on the cost of home heating, food, and virtually everything else.

While the Trudeau government likes to argue that the carbon tax rebates make up for all these additional costs, the Parliamentary Budget Officer says it’s not so.

The PBO has shown that the typical Ontario family will lose nearly $400 this year due to the carbon tax, even after the rebates.

That’s why premiers like Ford, Kinew and Furey have stepped up to the plate.

Canadians pay far too much at the pumps in taxes. While Trudeau hikes the carbon tax year after year, provincial leaders like Ford are keeping costs down and delivering meaningful relief for struggling families.

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Economy

Gas prices plummet in BC thanks to TMX pipeline expansion

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From Resource Works

By more than doubling capacity and cutting down the costs, the benefits of the TMX expansion are keeping more money in consumer pockets. 

Just months after the Trans Mountain Expansion (TMX) project was completed last year, Canadians, especially British Columbians, are experiencing the benefits promised by this once-maligned but invaluable piece of infrastructure. As prices fall when people gas up their cars, the effects are evident for all to see.

This drop in gasoline prices is a welcome new reality for consumers across B.C. and a long-overdue relief given the painful inflation of the past few years.

TMX has helped broaden Canadian oil’s access to world markets like never before, improve supply chains, and boost regional fuel supplies—all of which are helping keep money in the pockets of the middle class.

When TMX was approaching the finish line after the new year, it was praised for promising to ease long-standing capacity issues and help eliminate less efficient, pricier methods of shipping oil. By mid-May, TMX was completed and in full swing, with early data suggesting that gas prices in Vancouver were slackening compared to other cities in Canada.

Kent Fellows, an assistant professor of Economics and the Director of Graduate Programs for the School of Public Policy at the University of Calgary, noted that wholesale prices in Vancouver fell by roughly 28 cents per litre compared to the typically lower prices in Edmonton, thanks to the expanded capacity of TMX. Consequently, the actual price at the gas pump in the Lower Mainland fell too, providing relief to a part of Canada that traditionally suffers from high fuel costs.

In large part due to limited pipeline capacity, Vancouver’s gas prices have been higher than the rest of the country. From at least 2008 to this year, TMX’s capacity was unable to accommodate demand, leading to the generational issue of “apportionment,” which meant rationing pipeline space to manage excess demand.

Under the apportionment regime, customers received less fuel than they requested, which increased costs. With the expansion of TMX now complete, the pipeline’s capacity has more than doubled from 350,000 barrels per day to 890,000, effectively neutralizing the apportionment problem for now.

Since May, TMX has operated at 80 percent capacity, with no apportionment affecting customers or consumers.

Before the TMX expansion was completed, a litre of gas in Vancouver cost 45 cents more than a litre in Edmonton. By August, it was just 17 cents—a remarkable drop that underscores why it’s crucial to expand B.C.’s capacity to move energy sources like oil without the need for costly alternatives, allowing consumers to enjoy savings at the pump.

More than doubling TMX’s capacity has rapidly reshaped B.C.’s energy landscape. Despite tensions in the Middle East, per-litre gas prices in Vancouver have fallen from about $2.30 per litre to $1.54 this month. Even when there was a slight disruption in October, the price only rose to about $1.80, far below its earlier peaks.

As Kent Fellows noted, the only real change during this entire timeline has been the completion of the TMX expansion, and the benefits extend far beyond the province’s shores.

With TMX moving over 500,000 barrels more per day than it did previously, Canadian oil is now far more plentiful on the international market. Tankers routinely depart Burrard Inlet loaded with oil bound for destinations in South Korea and Japan.

In this uncertain world, where oil markets remain volatile, TMX serves as a stabilizing force for both Canada and the world. People in B.C. can rest easier with TMX acting as a barrier against sharp shifts in supply and demand.

For critics who argue that the $31 billion invested in the project is short-sighted, the benefits for everyday people are becoming increasingly evident in a province where families have endured high gas prices for years.

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