From EnergyNow.Ca

By Jim Warren

Energy Issues Carney Must Commit to if He Truly Cares About National Cohesion and be Different From Trudeau

If the stars fail to align in the majority of Western Canada’s favour and voters from Central Canada and the Maritimes re-elect a Liberal government on April 28, it will stand as a tragic rejection of the aspirations of the oil producing provinces and a threat to national cohesion.

As of today Mark Carney has not clearly and unequivocally promised to tear down the Liberal policy wall blocking growth in oil and gas exports. Yes, he recently claimed to favour energy corridors, but just two weeks earlier he backtracked on a similar commitment.

There are some promises Carney hopefully won’t honour. He has pledged to impose punitive emissions taxes on Canadian industry. But that’s supposedly alright because Carney has liberally sprinkled that promise with pixie dust. This will magically ensure any associated increases in the cost of living will disappear. Liberal wizardry will similarly vaporize any harm Carbon Tax 2.0 might do to the competitive capacity of Canadian exporters.

Carney has as also promised to impose border taxes on imports from countries that lack the Liberals’ zeal for saving the planet. These are not supposed to raise Canadians’ cost of living by much, but if they do we can take pride in doing our part to save the planet. We can feel good about ourselves while shopping for groceries we can’t afford to buy.

There is ample bad news in what Carney has promised to do. No less disturbing is what he has not agreed to do. Oil and gas sector leaders have been telling Carney what needs to be done, but that doesn’t mean he’s been listening.

The Build Canada Now action plan announced last week by western energy industry leaders lays out a concise five-point plan for growing the oil and gas sector. If Mark Carney wants to convince his more skeptical detractors that he is truly concerned about Canadian prosperity, he should consider getting a tattoo that celebrates the five points.

Yet, if he got onside with the five points and could be trusted, would it not be a step in the right direction? Sure, but it would also be great if unicorns were real.

The purpose of the Build Canada Now action plan couldn’t be much more clearly and concisely stated. “For the oil and natural gas sector to expand and energy infrastructure to be built, Canada’s federal political leaders can create an environment that will:

1. Simplify regulation. The federal government’s Impact Assessment Act and West Coast tanker ban are impeding development and need to be overhauled and simplified. Regulatory processes need to be streamlined, and decisions need to withstand judicial challenges.

2. Commit to firm deadlines for project approvals. The federal government needs to reduce regulatory timelines so that major projects are approved within 6 months of application.

3. Grow production. The federal government’s unlegislated cap on emissions must be eliminated to allow the sector to reach its full potential.

4. Attract investment. The federal carbon levy on large emitters is not globally cost competitive and should be repealed to allow provincial governments to set more suitable carbon regulations.

5. Incent Indigenous co-investment opportunities. The federal government needs to provide Indigenous loan guarantees at scale so industry may create infrastructure ownership opportunities to increase prosperity for communities and to ensure that Indigenous communities benefit from development.”

As they say the devil is often in the details. But it would be an error to complicate the message with too much detail in the context of an election campaign. We want to avoid sacrificing the good on behalf of the perfect. The plan needs to be readily understandable to voters and the media. We live in the age of the ten second sound bite so the plan has to be something that can be communicated succinctly.

Nevertheless, there is much more to be done. If Carney hopes to feel welcome in large sections of the west he needs to back away from many of promises he’s already made. And there are many Liberal policies besides Bill C-69 and C-48 that need to be rescinded or significantly modified.

Liberal imposed limitations on free speech have to go. In a free society publicizing the improvements oil and gas companies are making on behalf of environmental protection should not be a crime.

There is a morass of emissions reduction regulations, mandates, targets and deadlines that need to be rethought and/or rescinded. These include measures like the emissions cap, the clean electricity standard, EV mandates and carbon taxes. Similarly, plans for imposing restrictions on industries besides oil and gas, such as agriculture, need to be dropped. These include mandatory reductions in the use of nitrogen fertilizer and attacks (thus far only rhetorical) on cattle ranching.

A good starting point for addressing these issues would be meaningful federal-provincial negotiations. But that won’t work if the Liberals allow Quebec to veto energy projects that are in the national interest. If Quebec insists on being obstructive, the producing provinces in the west will insist that its equalization welfare be reduced or cancelled.

Virtually all of the Liberal policy measures noted above are inflationary and reduce the profitability and competitive capacity of our exporters. Adding to Canada’s already high cost of living on behalf of overly zealous, unachievable emissions reduction goals is unnecessary as well as socially unacceptable.

We probably all have our own policy change preferences. One of my personal favourites would require the federal government to cease funding environmental organizations that disrupt energy projects with unlawful protests and file frivolous slap suits to block pipelines.

Admittedly, it is a rare thing to have all of one’s policy preferences satisfied in a democracy. And it is wise to stick to a short wish list during a federal election campaign. Putting some of the foregoing issues on the back burner is okay provided we don’t forget them there.

But what if few or any of the oil and gas producing provinces’ demands are accepted by Carney and he still manages to become prime minister?

We are currently confronted by a dangerous level of geopolitical uncertainty. The prospects of a global trade war and its effects on an export-reliant country like Canada are daunting to say the least.

Dividing the country further by once again stifling the legitimate aspirations of the majority of people in Alberta and Saskatchewan will not be helpful. (I could add voters from the northeast and interior of B.C., and southwestern Manitoba to the club of the seriously disgruntled.)

From the Fraser Institute

By Tegan Hill

With the tariff war continuing and the federal election underway, Canadians should understand what the last federal government seemingly did not—a strong Alberta makes for a stronger Canada.

And yet, current federal policies disproportionately and negatively impact the province. The list includes Bill C-69 (which imposes complex, uncertain and onerous review requirements on major energy projects), Bill C-48 (which bans large oil tankers off British Columbia’s northern coast and limits access to Asian markets), an arbitrary cap on oil and gas emissions, numerous other “net-zero” targets, and so on.

Meanwhile, Albertans contribute significantly more to federal revenues and national programs than they receive back in spending on transfers and programs including the Canada Pension Plan (CPP) because Alberta has relatively high rates of employment, higher average incomes and a younger population.

For instance, since 1976 Alberta’s employment rate (the number of employed people as a share of the population 15 years of age and over) has averaged 67.4 per cent compared to 59.7 per cent in the rest of Canada, and annual market income (including employment and investment income) has exceeded that in the other provinces by $10,918 (on average).

As a result, Alberta’s total net contribution to federal finances (total federal taxes and payments paid by Albertans minus federal money spent or transferred to Albertans) was $244.6 billion from 2007 to 2022—more than five times as much as the net contribution from British Columbians or Ontarians. That’s a massive outsized contribution given Alberta’s population, which is smaller than B.C. and much smaller than Ontario.

Albertans’ net contribution to the CPP is particularly significant. From 1981 to 2022, Alberta workers contributed 14.4 per cent (on average) of total CPP payments paid to retirees in Canada while retirees in the province received only 10.0 per cent of the payments. Albertans made a cumulative net contribution to the CPP (the difference between total CPP contributions made by Albertans and CPP benefits paid to retirees in Alberta) of $53.6 billion over the period—approximately six times greater than the net contribution of B.C., the only other net contributing province to the CPP. Indeed, only two of the nine provinces that participate in the CPP contribute more in payroll taxes to the program than their residents receive back in benefits.

So what would happen if Alberta withdrew from the CPP?

For starters, the basic CPP contribution rate of 9.9 per cent (typically deducted from our paycheques) for Canadians outside Alberta (excluding Quebec) would have to increase for the program to remain sustainable. For a new standalone plan in Alberta, the rate would likely be lower, with estimates ranging from 5.85 per cent to 8.2 per cent. In other words, based on these estimates, if Alberta withdrew from the CPP, Alberta workers could receive the same retirement benefits but at a lower cost (i.e. lower payroll tax) than other Canadians while the payroll tax would have to increase for the rest of the country while the benefits remained the same.

Finally, despite any claims to the contrary, according to Statistics Canada, Alberta’s demographic advantage, which fuels its outsized contribution to the CPP, will only widen in the years ahead. Alberta will likely maintain relatively high employment rates and continue to welcome workers from across Canada and around the world. And considering Alberta recorded the highest average inflation-adjusted economic growth in Canada since 1981, with Albertans’ inflation-adjusted market income exceeding the average of the other provinces every year since 1971, Albertans will likely continue to pay an outsized portion for the CPP. Of course, the idea for Alberta to withdraw from the CPP and create its own provincial plan isn’t new. In 2001, several notable public figures, including Stephen Harper, wrote the famous Alberta “firewall” letter suggesting the province should take control of its future after being marginalized by the federal government.

The next federal government—whoever that may be—should understand Alberta’s crucial role in the federation. For a stronger Canada, especially during uncertain times, Ottawa should support a strong Alberta including its energy industry.