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Fossil fuels aren’t going anywhere, we benefit too much from them

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From the MacDonald Laurier Institute

By Chris Sankey

Indigenous people are finally reaping the rewards.

Over the last eight years we have experienced an unprecedented push from environmental activists to phase out fossil fuels. The Government of Canada seems to think it is possible. During question period in the Senate earlier this year, Sen. David Wells noted that, according to the Liberals, the energy transition “will cost $100-$125 billion per year at least to 2050,” and asked “When Canada only emits 1.5 per cent of global emissions, how does this expenditure make sense?”

Let me repeat that. $125 billion each year.

Who is going to pay for this? This is simply not possible, unless people want to see the Canadian economy in ruins.

Without fossil fuels, life as we know it would not be possible. State-of-the-art lifesaving medical equipment comes from fossil fuels and critical minerals from mining. Critical infrastructure, vehicles, planes, trains, container ships, ferries, and the billions of household necessities we buy from Canadian Tire, Walmart, Amazon and Ikea come from fossil fuels and help us function in our everyday lives. Without these needs we simply do not prosper.

Take for instance the environmental marches we see on our streets. The protesters seemingly have zero understanding of what makes their marches possible? Yes, fossil fuels. If you are going to protest for “Just Stop Oil,” then climate activists have to stop blocking traffic, because an idling vehicle is so much harder on the environment. And what about showing up in clothing and holding up signs made of hydrocarbons demonstrates your commitment to saving the planet? Hypocrisy? Absolutely.

From the moment we come out of our mother’s body, fossil fuels make our lives better. From cradle to grave, our lives are intertwined with fossil fuels. Just think of the act of giving birth. Chances are the mother was rushed to hospital in an ambulance, helicopter, plane, your personal vehicle, or taxi. As grandparents, siblings, uncles, aunts and cousins arrive at the hospital in their fossil fuel-powered cars and trucks smiling ear to ear welcoming the new baby to the family. They show up with gifts likely made from fossil fuels and critical minerals. If it is not made from fossil fuels, they were most definitely transported to the store using fossil fuels.

It is time we stop kidding ourselves that we can step away from the oil and gas wealth upon which our country benefits so much.

Only now, it will be Indigenous communities who are going to lead the multi-billion-dollar opportunity and put Canada at the front of global markets as a preferred supplier. For far too long, activist’s voice have been the determining factor in how governments make decisions on this necessary industry in our territories.

We need to make sure we have a framework that lays out a technology transition where we produce cleaner oil and gas by using new technology that will reduce emissions and grow our economies.

Since the Liberals were elected in 2015 everywhere we turn, our resource sector is being badly hurt. Forestry, fishing, oil and gas are screaming for more production, but federal regulations threaten to not only destroy the energy industry, but all industries with the emissions cap. Renewables are costing taxpayers billions in subsidies and it will not end there.

Indigenous people have always took care of the environment and grown our economies. From fishing, logging, farming and hunting, we used fossil fuels to make it happen.

Obviously, humans did not use fossil fuels prior to the industrial revolution and indigenous people made hunting weapons out of wood and stone. Life was challenging for our ancestors back then; life expectancy was short for all people.

Over time, technology in the energy sector changed for the better. I would be remiss if I did not include the fact that industry did not always have modern clean tech; emissions were high and cancer-causing effects were widespread. That introduced chemicals foreign to indigenous people. Like all things, newer and safer technology emerged. Making life much easier and convenient.

However, historically speaking indigenous people lived on fat and protein. Everything we ate was natural. Like all things that come and go, European contact forever changed our way of life. We were greatly impacted in every possible manner, from social, cultural, status and creed. But like we always have, we persevered like our ancestors wanted us too.

This is our turn to take our rightful place on the global stage. We are watching it play out in real time around the world. Energy and food security is the number one priority around the world. Indigenous communities near and far are leading the way in the pursuit of sustainable development, but government and activists are hindering our ability to progress.

It is important that Canadians be realistic when it comes to the use of oil and gas. All of us want to leave our planet better for the next generation. To do so, we must manage expectations. Many countries are just now finally transitioning to oil and gas from more environmentally harmful coal and countries like India will not be carbon neutral until 2070 or later.

Our country has an abundance of resources that the world wants. They are literally knocking on our door to get access to our wealth. We can help countries like China, India and Indonesia move away from burning coal and wood, and thereby help lift millions out of certain poverty, and improve their health.

New climate change technology has emerged in the energy sector, such as carbon capture and storage that will reduce and eliminate emissions and the need for diluent in oil pipelines. Our combination of Indigenous knowledge and history to the land makes for a stronger argument to partner with Indigenous communities.  Alignment amongst indigenous communities is key to securing a project. Proper alignment will de-risk a project and attract investment and industry to the table where we will have a seat and even equity.

Engagement with Indigenous communities is the solution. The vast majority of our people are not against development. We are only against development when we are excluded from the opportunities, or if the evaluation process was developed without Indigenous input.

It is not rocket-science. Include the people whose territory you want to build on. This is an opportunity to build relationships through meaningful dialogue and trust. We must have nation to nation dialogue and build leadership to leadership relationships.  No hidden agendas, just up-front, honest conversations about oil and gas and the costs and benefits of development.

I am tired of watching our people struggle. Our people do not want to watch the prosperity boat sail by Poverty Island. Markets do not wait for anyone. We cannot keep waiting for the right time. We cannot keep waiting for life to get better. First Nations can make it better by being at the economic table where our people can bring traditional knowledge to industry and make decisions in the best interests of our communities. Whether we agree or not in the first instance, we need to be in the room working towards a brighter future, because at the end of the day we all need rubber boots too.

Chris Sankey is a Senior fellow at the MacDonald Laurier Institute, a former Elected Councilor for the Lax Kw Alaams Band and Businessman.

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Business

It Took Trump To Get Canada Serious About Free Trade With Itself

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From the  Frontier Centre for Public Policy

By Lee Harding

Trump’s protectionism has jolted Canada into finally beginning to tear down interprovincial trade barriers

The threat of Donald Trump’s tariffs and the potential collapse of North American free trade have prompted Canada to look inward. With international trade under pressure, the country is—at last—taking meaningful steps to improve trade within its borders.

Canada’s Constitution gives provinces control over many key economic levers. While Ottawa manages international trade, the provinces regulate licensing, certification and procurement rules. These fragmented regulations have long acted as internal trade barriers, forcing companies and professionals to navigate duplicate approval processes when operating across provincial lines.

These restrictions increase costs, delay projects and limit job opportunities for businesses and workers. For consumers, they mean higher prices and fewer choices. Economists estimate that these barriers hold back up to $200 billion of Canada’s economy annually, roughly eight per cent of the country’s GDP.

Ironically, it wasn’t until after Canada signed the North American Free Trade Agreement that it began to address domestic trade restrictions. In 1994, the first ministers signed the Agreement on Internal Trade (AIT), committing to equal treatment of bidders on provincial and municipal contracts. Subsequent regional agreements, such as Alberta and British Columbia’s Trade, Investment and Labour Mobility Agreement in 2007, and the New West Partnership that followed, expanded cooperation to include broader credential recognition and enforceable dispute resolution.

In 2017, the Canadian Free Trade Agreement (CFTA) replaced the AIT to streamline trade among provinces and territories. While more ambitious in scope, the CFTA’s effectiveness has been limited by a patchwork of exemptions and slow implementation.

Now, however, Trump’s protectionism has reignited momentum to fix the problem. In recent months, provincial and territorial labour market ministers met with their federal counterpart to strengthen the CFTA. Their goal: to remove longstanding barriers and unlock the full potential of Canada’s internal market.

According to a March 5 CFTA press release, five governments have agreed to eliminate 40 exemptions they previously claimed for themselves. A June 1 deadline has been set to produce an action plan for nationwide mutual recognition of professional credentials. Ministers are also working on the mutual recognition of consumer goods, excluding food, so that if a product is approved for sale in one province, it can be sold anywhere in Canada without added red tape.

Ontario Premier Doug Ford has signalled that his province won’t wait for consensus. Ontario is dropping all its CFTA exemptions, allowing medical professionals to begin practising while awaiting registration with provincial regulators.

Ontario has partnered with Nova Scotia and New Brunswick to implement mutual recognition of goods, services and registered workers. These provinces have also enabled direct-to-consumer alcohol sales, letting individuals purchase alcohol directly from producers for personal consumption.

A joint CFTA statement says other provinces intend to follow suit, except Prince Edward Island and Newfoundland and Labrador.

These developments are long overdue. Confederation happened more than 150 years ago, and prohibition ended more than a century ago, yet Canadians still face barriers when trying to buy a bottle of wine from another province or find work across a provincial line.

Perhaps now, Canada will finally become the economic union it was always meant to be. Few would thank Donald Trump, but without his tariffs, this renewed urgency to break down internal trade barriers might never have emerged.

Lee Harding is a research fellow with the Frontier Centre for Public Policy.

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Alberta

Low oil prices could have big consequences for Alberta’s finances

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From the Fraser Institute

By Tegan Hill

Amid the tariff war, the price of West Texas Intermediate oil—a common benchmark—recently dropped below US$60 per barrel. Given every $1 drop in oil prices is an estimated $750 million hit to provincial revenues, if oil prices remain low for long, there could be big implications for Alberta’s budget.

The Smith government already projects a $5.2 billion budget deficit in 2025/26 with continued deficits over the following two years. This year’s deficit is based on oil prices averaging US$68.00 per barrel. While the budget does include a $4 billion “contingency” for unforeseen events, given the economic and fiscal impact of Trump’s tariffs, it could quickly be eaten up.

Budget deficits come with costs for Albertans, who will already pay a projected $600 each in provincial government debt interest in 2025/26. That’s money that could have gone towards health care and education, or even tax relief.

Unfortunately, this is all part of the resource revenue rollercoaster that’s are all too familiar to Albertans.

Resource revenue (including oil and gas royalties) is inherently volatile. In the last 10 years alone, it has been as high as $25.2 billion in 2022/23 and as low as $2.8 billion in 2015/16. The provincial government typically enjoys budget surpluses—and increases government spending—when oil prices and resource revenue is relatively high, but is thrown into deficits when resource revenues inevitably fall.

Fortunately, the Smith government can mitigate this volatility.

The key is limiting the level of resource revenue included in the budget to a set stable amount. Any resource revenue above that stable amount is automatically saved in a rainy-day fund to be withdrawn to maintain that stable amount in the budget during years of relatively low resource revenue. The logic is simple: save during the good times so you can weather the storm during bad times.

Indeed, if the Smith government had created a rainy-day account in 2023, for example, it could have already built up a sizeable fund to help stabilize the budget when resource revenue declines. While the Smith government has deposited some money in the Heritage Fund in recent years, it has not created a dedicated rainy-day account or introduced a similar mechanism to help stabilize provincial finances.

Limiting the amount of resource revenue in the budget, particularly during times of relatively high resource revenue, also tempers demand for higher spending, which is only fiscally sustainable with permanently high resource revenues. In other words, if the government creates a rainy-day account, spending would become more closely align with stable ongoing levels of revenue.

And it’s not too late. To end the boom-bust cycle and finally help stabilize provincial finances, the Smith government should create a rainy-day account.

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