Energy
Natural resources remain backbone of Canada’s trade and prosperity
From the Fraser Institute
By Jock Finlayson and Elmira Aliakbari
It’s hard to overstate the importance of energy to our economy. In its latest “scorecard” report, the Coalition for a Better Future notes that “over the past decade, Canada recorded a cumulative trade gap of $130 billion. Had it not been for energy, our trade gap would have been about $1 trillion.” By any measure, the energy sector punches above its weight when paying Canada’s bills.
Canada is a mid-sized economy accounting for roughly 2 per cent of global production. Within North America, we represent less than one-tenth of the collective output of the three national economies. Canada is also an “open” economy that relies on cross-border flows of trade, investment and knowledge to sustain our high living standards.
To pay our way in an unforgiving and very competitive world, Canada must produce and sell exports to customers in other markets. Among other benefits, these exports furnish the financial means to pay for the vast array of imports that enhance the wellbeing of Canadian households and allow many of our businesses to operate efficiently and grow.
In 2022, Canada exported $779 billion of goods to other countries, and $161 billion of services, for a total of $940 billion. About three-quarters of Canada’s exports are destined for a single market—the United States. Canada also sources the bulk of imports from the U.S.
A hard truth about Canada’s trade is the outsized role of natural resource-based products in the export mix. Added together, energy, non-metallic minerals (and related products), metal ores, forest products and agri-food (i.e. food produced from agriculture) comprise roughly half of Canada’s international exports of goods and services—a notably larger share than in other countries with advanced economies (apart from Australia and New Zealand).
Energy alone accounted for 27 per cent of Canada’s merchandise exports in 2022, generating $212 billion for Canadian businesses, workers and governments. Mining contributed $85 billion in export revenues, followed by forest products ($60 billion) and agri-food ($57 billion).
Within the broad energy basket, oil and oil-based products dominate, accounting for more than three-quarters of all energy-based export revenues. Despite innumerable speeches and press releases issued by the federal government, energy’s contribution to Canada’s exports is poised to increase in the next few years—due not to growing exports of “clean tech” goods, carbon-free electricity or hydrogen, but to pending liquefied natural gas (LNG) production in British Columbia coupled with rising volumes of Western Canadian oil shipments following the completion of pipeline expansion projects.
It’s hard to overstate the importance of energy to our economy. In its latest “scorecard” report, the Coalition for a Better Future notes that “over the past decade, Canada recorded a cumulative trade gap of $130 billion. Had it not been for energy, our trade gap would have been about $1 trillion.” By any measure, the energy sector punches above its weight when paying Canada’s bills. The same is true, albeit to a lesser extent, for the other major resource sectors.
Many Canadians, huddled in increasingly unaffordable urban communities that have few evident connections to the country’s natural resource economy, may be puzzled by the continued vital importance of resource extraction and processing to Canada’s prosperity.
Ultimately, any trading country has a ledger showing the trade surpluses and trade deficits of its industry sectors. In Canada’s case, a handful of sectors generate significant trade surpluses, which help finance the large trade deficits incurred in other parts of the economy.
The story is a simple one—positive trade balances in the energy, mining, forestry and agri-food sectors offset chronic—and in some cases fast-growing—trade deficits in consumer goods, chemicals and plastics, motor vehicles/parts, and industrial and electronic goods. Canada also runs a smallish deficit in our overall services trade.
The sectoral trade data are informative. Among other things, they tell us where Canada has a “comparative advantage” in the global context. For a market economy, a pattern of positive trade balances is evidence that it has a comparative advantage in industries that reliably report trade surpluses.
Armed with such information, smart policymakers should create and sustain a business and investment climate that champions and bolsters the commercial success of industries that underpin the export economy. This is a message the Trudeau government has had trouble digesting, perhaps because it relies heavily on the votes of a few large metropolitan areas while most rural and resource-dependent regions remain a political afterthought.
Authors:
Business
Biden announces massive new climate goals in final weeks, despite looming Trump takeover
From LifeSiteNews
Outgoing President Joe Biden announced a new climate target of reducing American carbon emissions from 61-66% over the next decade, even though President Trump would be able to undo it as soon as next month.
Outgoing President Joe Biden announced December 19 a new climate target of reducing American carbon emissions of more than 60% over the next decade, even though returning President Donald Trump would be able to undo it as soon as next month.
“Today, as the United States continues to accelerate the transition to a clean energy economy, President Biden is announcing a new climate target for the United States: a 61-66 percent reduction in 2035 from 2005 levels in economy-wide net greenhouse gas emissions,” the White House announced, the Washington Free Beacon reports. The new target will be formally submitted to the United Nations Climate Change secretariat.
“President Biden’s new 2035 climate goal is both a reflection of what we’ve already accomplished,” Biden climate adviser John Podesta added, “and what we believe the United States can and should achieve in the future.”
The announcement may be little more than a symbolic gesture in the end, however, as Trump is widely expected to withdraw the United States from the Paris Climate Agreement upon resuming office in January, in the process voiding related climate obligations.
Trump formally pulled out of the Paris accords in August 2017, the first year of his first term, with then-U.S. Ambassador to the United Nations Nikki Haley stating that the administration would be “open to re-engaging in the Paris Agreement if the United States can identify terms that are more favorable to it, its business, its workers, its people, and its taxpayers.”
Such terms were never reached, however, leaving America out until Biden re-committed the nation to the Paris Agreement on the first day of his presidency, obligating U.S. policy to new economic regulations to cut carbon emissions.
In June, the Trump campaign confirmed Trump’s intentions to withdraw from Paris again. At the time, Trump’s team was reportedly mulling a number of non-finalized drafts of executive orders to do so.
Left-wing consternation on the matter is based on certitude in “anthropogenic global warming” (AGW) or “climate change,” the thesis that human activity, rather than natural phenomena, is primarily responsible for Earth’s changing climate and that such trends pose a danger to the planet in the form of rising sea levels and weather instability.
Activists have long claimed there is a “97 percent scientific consensus” in favor of AGW, but that number comes from a distortion of an overview of 11,944 papers from peer-reviewed journals, 66.4 percent of which expressed no opinion on the question; in fact, many of the authors identified with the AGW “consensus” later spoke out to say their positions had been misrepresented.
AGW proponents suffered a blow in 2010 with the discovery that their leading researchers at the Intergovernmental Panel on Climate Change, East Anglia Climate Research Unit, and National Oceanic and Atmospheric Administration had engaged in widespread data manipulation, flawed climate models, misrepresentation of sources, and suppression of dissenting findings in order to make the so-called “settled science” say what climate activists wanted it to.
Daily Caller
LNG Farce Sums Up Four Years Of Ridiculous Biden Energy Policy
From the Daily Caller News Foundation
By David Blackmon
That is what happens when “science” isn’t science at all and energy reality is ignored in favor of the prevailing narratives of the political left.
As Congress struggled with yet another chaotic episode of negotiations over another catastrophic continuing resolution, all I could think was how wonderful it would be for everyone if they just shut the government down and brought an end to the Biden administration and its incredibly braindead and destructive energy-policy farce a month early.
What a blessing it would be for the country if President Joe Biden’s Environmental Protection Agency (EPA) were forced to stop “throwing gold bars off the Titanic” 30 days ahead of schedule. What a merry Christmas we could have if we never had to hear silly talking points based on pseudoscience from the likes of Biden’s climate policy adviser John Podesta or Energy Secretary Jennifer Granholm or Biden himself (read, as always, from his ever-present TelePrompTer) again!
What a shame it has been that the rest of us have been forced to take such unserious people seriously for the last four years solely because they had assumed power over the rest of us. As Jerry Garcia and the Grateful Dead spent decades singing: “What a long, strange trip it’s been.”
Speaking of Granholm, she put the perfect coda to this administration’s seemingly endless series of policy scams this week by playing cynical political games with what was advertised as a serious study. It was ostensibly a study so vitally important that it mandated the suspension of permitting for one of the country’s great growth industries while we breathlessly awaited its publication for most of a year.
That, of course, was the Department of Energy’s (DOE) study related to the economic and environmental impacts of continued growth of the U.S. liquified natural gas (LNG) export industry. We were told in January by both Granholm and Biden that the need to conduct this study was so urgent, that it was entirely necessary to suspend permitting for new LNG export infrastructure until it was completed.
The grand plan was transparent: implement the “pause” based on a highly suspect LNG emissions draft study by researchers at Cornell University, and then publish an impactful DOE study that could be used by a President Kamala Harris to implement a permanent ban on new export facilities. It no doubt seemed foolproof at the Biden White House, but schemes like this never turn out to be anywhere near that.
First, the scientific basis for implementing the pause to begin with fell apart when the authors of the draft Cornell study were forced to radically lower their emissions estimates in the final product published in September.
And then, the DOE study findings turned out to be a mixed bag proving no real danger in allowing the industry to resume its growth path.
Faced with a completed study whose findings essentially amount to a big bag of nothing, Granholm decided she could not simply publish it and let it stand on its own merits. Instead, someone at DOE decided it would be a great idea to leak a three-page letter to the New York Times 24 hours before publication of the study in an obvious attempt to punch up the findings.
The problem with Granholm’s letter was, as the Wall Street Journal’s editorial board put it Thursday, “the study’s facts are at war with her conclusions.” After ticking off a list of ways in which Granholm’s letter exaggerates and misleads about the study’s actual findings, the Journal’s editorial added, “Our sources say the Biden National Security Council and career officials at Energy’s National Laboratories disagree with Ms. Granholm’s conclusions.”
There can be little doubt that this reality would have held little sway in a Kamala Harris presidency. Granholm’s and Podesta’s talking points would have almost certainly resulted in making the permitting “pause” a permanent feature of U.S. energy policy. That is what happens when “science” isn’t science at all and energy reality is ignored in favor of the prevailing narratives of the political left.
What a blessing it would have been to put an end to this form of policy madness a month ahead of time. January 20 surely cannot come soon enough.
David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.
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