Canadian Taxpayers Federation
Every Canadian should reflect on four words Oklahoma Governor Mary Fallin recently shared at a conference in Banff.
After describing how she had heard about several oil and gas companies cancelling their multi-billion dollar projects in Canada, Fallin quipped – “opportunity here, opportunity there.”
The inference was that she could approach those companies and try to convince them to invest in her flourishing oil and gas state. Fallin of course wants the thousands of jobs those companies would bring, the billions in tax revenues they would pay and all the other positive spinoff effects.
So why is Canada letting all those jobs, and the billions of tax dollars they would contribute, slip between our fingers?
Total provincial and federal government debt in Canada is closing in on $1.4 trillion. On top of that, governments in Canada will face a colossal financial challenge over the next couple of decades as our population ages. Simply put, waves of baby boomers are starting to require more costly health care procedures while the portion of our population in the work force shrinks.
If we continue to miss out on enormous resource projects, don’t be surprised to see a period of steady tax increases – governments will need to find the money somewhere.
Note that Petronas recently cancelled a $36 billion liquefied natural gas project in B.C. The $7 billion Trans Mountain pipeline project – although it was approved – now has to fend off efforts by B.C.’s new NDP government to stop it. The proposed $8 billion Northern Gateway project is dead in the water and Trans Canada’s $16 billion Energy East pipeline proposal just saw the government throw a wrench in its approval process.
But it’s not just the oil and gas sector that is constantly being obstructed. Ontario’s “ring of fire” – an immense mining opportunity in northern Ontario – has yet to ignite and the massive Site C hydro dam in B.C. is facing opposition from the province’s new government. In 2016, the Financial Post identified “35 projects worth $129 billion, that have been stalled or cancelled due to opposition from environmental, aboriginal and/or community groups.”
While radical environmentalists pat themselves on the back for obstructing such projects – and ironically text each other the news with cell phones made of plastics that come from oil products – what they should actually be doing is mourning.
The money that investors would have spent on any of the aforementioned projects isn’t going to be left in some low-interest bank account. No, the funds will instead be used to fund an oil and gas or mining project in some other country – quite likely one with half as good an environmental track record as Canada. We know this because the world’s demand for products made from mining activities and oil and gas projects continues to climb.
Make no mistake, we shouldn’t approve resource development projects without doing proper due diligence. But our country needs to recognize there’s a difference between due diligence and hanging ourselves economically.
When it comes to resource development, Canada has some soul searching to do. Either we find a better balance or we’ll likely pay the price through higher taxes.