Report shows lack of pipelines costs Canadians billions

A new calculation by the Canadian Taxpayers Federation shows the country is losing billions of dollars because provincial and federal governments are obstructing pipeline development with policy. It compares how the lack of pipelines reduces the Canadian price of oil compared to the US price, based on data released by the Office of the Parliamentary Budget Officer. Canadian taxpayers lost CAD $6.2 billion in revenue between 2013 and 2018 and can expect to lose another CAD $3.6 million every day until the end of 2023 if governments continue to get in the way of pipelines.

The CTF estimates that with enough pipeline capacity, the revenue collected by the Canadian government would pay for at least one additional hospital for every province and territory, fully fund nearly 25,000 new teachers for 10 years or exempt all three Maritime provinces from federal taxes for a year.

Prime Minister Justin Trudeau’s government blocking the Northern Gateway pipeline and proposed a discriminatory tanker ban off the coast of British Columbia are among the policies and positions that are denying Canadian oil and gas access to international markets and new customers, while oil deliveries from Saudi Arabia and other foreign oil producers to refineries in New Brunswick and Quebec are still allowed.

The federal government also changed the regulatory goal posts on TransCanada’s CAD $16-billion Energy East pipeline by requiring the project go through an upstream and downstream emissions review. In response to British Columbia’s government opposing the Trans Mountain pipeline expansion, University of Calgary economist Jack Mintz says, “Trudeau rewarded the B.C. government’s attempts to block Trans Mountain by showering B.C. with infrastructure money.

Bill C-69, commonly referred to as the ‘No More Pipelines Act’, which is currently before the Senate, is considered to the be the most destructive government policy toward Canada’s energy industry. If it becomes law, this bill will make it even more difficult for pipelines to be approved by imposing additional considerations into an already onerous regulatory process. CEO of the Canadian Energy Pipeline Association Chris Bloomer said, “It is difficult to imagine that a new major pipeline could be built in Canada under the Impact Assessment Act [Bill C-69].”

CTF says oil production is projected to grow in Canada by over 50 percent over the next two decades and taxpayers will lose billions more if Canadian politicians continue to get in the way of pipeline development. Taxpayers will either have to pay more to cover the federal government’s multi-billion-dollar budget hole or will receive less services.