Energy exports continue to fuel the Canadian economy

Without exports of oil, natural gas and other energy goods, Canada’s cumulative trade deficit with the rest of the world—which stood at $130 billion in the decade ending in 2023—would have ballooned to $1 trillion.

Energy sits at the heart of Canada’s export economy, even though some federal policymakers and provincial governments appear to be discomfited by that fact.

In recent years, energy has supplied 20–25 percent of Canada’s total international exports (goods plus services combined), with crude oil, refined petroleum products, and natural gas making up the lion’s share of our energy-related shipments to other countries. Canada’s energy export basket also includes coal, uranium, and electricity.

In the last two decades, energy has become Canada’s leading export sector, mainly owing to higher oil production volumes, rising hydrocarbon exports, and still-robust global demand for fossil fuels (which provide 80 percent of the world’s primary energy). Measured in millions of barrels of oil equivalent (BOE), Canadian conventional oil and gas production rose from 4.5 million BOE per day in 2015 to 5.4 million/day last year, with most of the additional output destined for the United States. With the completion of pipeline expansion projects and the looming start-up of liquefied natural gas (LNG) production on the West Coast, oil and gas are set to play an even bigger role in Canada’s economy and export portfolio in the coming years.

A May 2024 modelling study by S&P Global Commodity Insights predicts a further jump in conventional oil and gas output of between 0.5 and 1.0 million BOE/day by 2035, assuming the federal government doesn’t impose draconian caps on production in the sector as part of its shambolic climate policy agenda. Based on that scenario, S&P estimates that production, capital and operating spending in Canada’s conventional oil and gas industry will add up to $1.3 trillion to Canada’s gross domestic product by 2035. This forecast is premised on a modest (8 percent) increase in output and further declines in the sector’s greenhouse gas emissions intensity due to efficiency measures, advances in technology, greater use of carbon capture, and other factors.

To illustrate the contribution that energy makes to Canada’s prosperity, the Coalition for A Better Future recently estimated that without exports of oil, natural gas and other energy goods, Canada’s cumulative trade deficit with the rest of the world—which stood at $130 billion in the decade ending in 2023—would have ballooned to $1 trillion.

Thanks to energy production, Canada garners up to $200 billion of additional export receipts each year—and the figure is set to rise significantly in the next decade. This outsized stream of export earnings furnishes the means to pay for imports, supports hundreds of thousands of high-paying jobs, and generates tens of billions of dollars of extra revenues for Canadian governments.

In Canada’s case, it is also worth noting that energy reliably produces the largest trade surplus of any sector, by a wide margin. And, as noted above, that surplus will increase in size over the rest of this decade and possibly beyond, mainly due to oil and gas output and exports climbing from current levels.

Averaged over the period 2022-23, Canada’s two-way trade in energy goods yielded a net annual surplus of almost $150 billion. This dwarfs the surpluses posted in other natural resource-based sectors such as metal ores, non-metallic minerals, agri-food, and forest products. Large trade surpluses in energy—and, to a lesser extent, in other natural resource industries—offset chronic Canadian trade deficits in consumer goods, machinery and equipment, electronic products, and other high-tech goods. Canada also runs a trade deficit of $35-40 billion in motor vehicles and parts.

Trudeau government ministers are fond of talking up (and subsidizing) Canadian non-fossil fuel energy industries, like (carbon-free) electricity, biofuels, hydrogen (production of which currently is almost non-existent in Canada) and the “clean tech” sector. However, except for electricity, these segments of the Canadian energy sector are very small in size and export little. And while the “clean tech” industry does hold considerable promise over the medium term, today it accounts for less than one percent of Canada’s international exports.

When it comes to energy exports, the reality for Canada is that oil, natural gas, and other fossil fuel products dominate the picture—and will continue to do so for the foreseeable future.

Author:

Jock Finlayson

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ESG will impose considerable harm on Canadian workers, doesn’t reflect the reality of how markets actually work

Published on September 1, 2024

Todayville

From the Fraser Institute

By Steven Globerman, Jack Mintz, and Bryce Tingle

The ESG movement—which calls for public companies and investors in public companies to identify and voluntarily implement environmental, social, and governance initiatives—will cause substantial harm to the economy and
workers, finds two new essays by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

“Investor support for ESG is starting to wane, which isn’t surprising as the considerable harms ESG mandates pose come to light,” said Steven Globerman, resident scholar at the Fraser Institute and author of It’s Time to Move on from ESG.
The essay summarizes the arguments against imposing top-down ESG mandates. In particular, evidence shows that (1) ESG-branded investment funds do not perform better than conventional investment funds, (2) companies that proclaim to pursue ESG-related activities are not more profitable than companies that do not, and (3) mandating ESG-related corporate disclosures imposes additional costs on public companies and diverts resources away from productivity-enhancing investments, harming workers.

A separate new essay in the Institute’s series on ESG, Putting Economics Back into ESG written by Jack Mintz and Bryce Tingle of the University of Calgary, highlights how the current concept of ESG mandates being pursued in Canada are incompatible with basic economic theory and fail to understand how markets actually work. As a result, ESG mandates will (1) discourage new businesses from locating in Canada, (2) investors will be reluctant to invest in Canada, (3) Canadian companies will be less competitive than their international peers, (4) capital will leave Canada for jurisdictions without restrictive ESG mandates, and (5) economic growth will slow and workers will suffer as a result.

But these harms can be minimized if the definition of what constitutes ESG is expanded, securities commissions are not tasked with regulating ESG, but instead focus on ensuring market integrity, and if governments prosecute fraud in ESG branded funds, and likewise, governments impose liability for the use of ESG ratings, which have been found to be invalid and unreliable.

Crucially, both essays conclude that public policy objectives, such as those addressed by ESG initiatives, should be decided by and acted on by democratically elected governments, not private sector actors.

“There is no reason to believe that managers and business executives enjoy any comparative advantage in identifying and implementing broad environmental and social policies compared to politicians and regulators,” said Globerman.

“The evidence is clear—the private sector best serves the interests of society when it focuses on maximizing shareholder wealth within the confines of the established laws, not complying with top-down imposed ESG mandates that will harm the economy and ultimately Canadian workers.”

The ESG movement calls for public companies and investors in public companies to identify and voluntarily implement environmental, social, and governance initiatives—ostensibly in the public interest.
One school of thought supporting ESG is that doing so will make companies more profitable and thereby increase the wealth of their shareholders.
However, academic research to date has failed to identify a consistent and statistically significant positive relationship between corporate ESG ratings and the stock market performance of companies.
In fact, research instead suggests that adopting an ESG-intensive model might compromise the efficient production and distribution of goods and services and thereby slow the overall rate of real economic growth. Slower real economic growth means societies will be less able to afford investments to address environmental and other ESG-related priorities.
The second school of thought is that companies, their senior managers, and their boards have an ethical obligation to implement ESG initiatives that go beyond simply complying with existing laws and regulations, even if it means reduced profitability. However, corporate managers and board members cannot and should not be expected to determine public policy priorities. The latter should be identified by democratic means and not by unelected private sector managers or investors.
Given that there are indications that investor support for ESG is waning, it is apparent that the time has come for corporate leaders and politicians to acknowledge that it’s time to move on from ESG.

Read the Essay: It’s Time to Move on from ESG

Read the Essay: Putting Economics Back into ESG

Authors:

Steven Globerman

Senior Fellow and Addington Chair in Measurement, Fraser Institute

Jack Mintz

President’s Fellow, School of Public Policy, University of Calgary

Bryce Tingle

N. Murray Edwards Chair in Business Law, University of Calgary

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Canadian Conservatives look to gather support for bill banning a central bank digital currency

Published on August 31, 2024

Todayville

From LifeSiteNews

By Anthony Murdoch

Bill C-400, sponsored by Conservative MP Ted Falk, seeks to ensure that a central bank digital currency is never created and that Canadians will always be able to use physical cash in the settling of debts and other financial transactions.

Canada’s Conservative Party is looking to gather support for a bill that would outright ban the federal government from creating a central bank digital currency (CBDC) and make it so that cash is kept as the preferred means of settling debts.

The bill, dubbed the Framework on the Access to and Use of Cash Act, or Bill C-400, is sponsored by Conservative MP Ted Falk and already passed its first reading back in June of 2024. It is currently awaiting its second reading.

According to Falk, for “millions of Canadians,” notably “vulnerable folks in our population,” the use of “physical cash is essential to everyday life.”

“Likewise, charities, community organizations, and remote communities rely on cash to achieve their worthy goals,” he said while speaking of his bill.

“Finally, in a world where governments, banks, and corporations are increasingly infringing on the privacy rights of Canadians, cash remains the only truly anonymous form of payment.”

At its core, Bill C-400, if passed, would allow for a national framework to be made which would ensure that Canadians always have access to and can use cash. It would also amend Canada’s Currency Act to restrict the current finance minister’s ability to suddenly put out a call that all bank notes be recalled. Finally, the bill would amend the Bank of Canada Act to ban it from creating any form of digital dollar.

The bill also calls for ways to “incentivize businesses and creditors to accept payments made in cash,” as well as to “remove barriers and disincentives in relation to donations made in cash to non-profit organizations and community organizations without compromising efforts to curtail money laundering, fraud and other financial crimes.”

As previously reported by LifeSiteNews, an overwhelming majority of Canadians want the government and the Bank of Canada (BOC) to “leave cash alone” and not proceed with the creation of a so-called “digital dollar.” The feedback came after the BOC launched a public survey to gauge Canadians’ taste for a digital dollar.

Conservative leader Pierre Poilievre has before promised that if he is elected prime minister come the next election, he would stop any implementation of a “digital currency” or a compulsory “digital ID” system.

As recently as a week ago he posted on X about protecting “cash.”

“Ban central bank digital currency, protect your freedom to use cash, and get the government out of your wallet. Proud to support @MPTedFalk‘s common sense Conservative Bill C-400 to protect the privacy & freedom of Canadians,” Poilievre wrote.

Ban central bank digital currency, protect your freedom to use cash, and get the government out of your wallet.

Proud to support @MPTedFalk's common sense Conservative Bill C-400 to protect the privacy & freedom of Canadians.https://t.co/NeqCsSS5fh pic.twitter.com/ft21ISLKdC

— Pierre Poilievre (@PierrePoilievre) August 12, 2024

Digital currencies have been touted as the future by some government officials, but, as LifeSiteNews has reported before, many experts warn that such technology would ultimately restrict freedom and be used as a “control tool” against citizens similar to China’s pervasive social credit system.

Prominent opponents of CBDCs have been strongly advocating that citizens use cash whenever possible and boycott businesses that do not accept cash payments as a means of slowing down the imposition of CBDCs.