On Wednesday, the independent, non-partisan Office of the Parliamentary Budget Officer (PBO) once again riled up the federal government by doing its job. The PBO warned in a report that the federal emissions cap proposed last year would sacrifice economic growth and could kill over 40,000 jobs by 2032.
In short order, Energy Minister Jonathan Wilkinson responded on social media with a vitriol usually reserved for his Conservative rivals in parliament.
“Unfortunately, the PBO wasted their time and taxpayer dollars by analyzing a made-up scenario that the Government of Canada is not even remotely proposing,” he wrote. “By suggesting the only way to achieve emissions reductions in the oil and gas industry is to cut production, the PBO is once again misleading the public and ignoring reality.”
However, no direct comment was given to the National Post responding to the potential job losses or damage to growth cited in the PBO, with Wilkinson’s office merely quibbling about some of the analyses in the report.
Canada cannot afford to have a federal government that will not address the tension between their ideological climate ambitions and the new economic reality. This country is an energy superpower due to our oil and gas exports. Nearly all of these exports are going south to the United States, which has rapidly become an unfriendly power, rather than a friend and good neighbour. We desperately need new trading partners, and that requires more internal support for industry within Canada.
Unfortunately, President Donald Trump’s erratic tariff war has wrought no concessions from the government on unwinding the rules that keep the energy industry from reaching its full potential. Escalating our burdensome regulatory regime with emissions caps is tantamount to economic suicide in the second Trumpian world.
Wilkinson can dispute the findings of a single PBO report, but existing legislation that actively impedes the energy industry remains in place. The Impact Assessment Act is the most egregious of them, having turned the process of merely getting shovels in the ground into an odyssey.
It is almost like Ottawa is trying to squeeze the oil and gas sector so that it cannot breathe, and maybe that’s the point. After all, Wilkinson subscribes to the idea of “peak oil.”
Economists and analysts at the International Energy Agency, the Organization of the Petroleum Exporting Countries (OPEC) and the U.S. Energy Information Administration all predict that the world’s peak demand for oil will occur in 2034 at the earliest, and 2050 at the latest. But even those saying that the oil trade is already declining acknowledge that the product will still be in high demand for a long time.
In the meantime, the oil and gas industry still generates thousands of jobs, billions of revenue and economic growth that outstrips entire provinces.
Despite the possible emissions cap, the PBO still predicts production could rise 11 per cent by the 2030s. The four million barrels per day we send to the U.S. is a valuable tool in Trump’s tariff war, and exporting more to other markets can only help the Canadian economy.
Layoffs have already begun in Ontario’s steel industry due to the tariffs on Canadian steel and aluminum as orders from the U.S. fall, revealing how blue-collar families will suffer the brunt of the trade war.
Now is the time to double down, secure, and expand our energy industry to help keep net job losses to a minimum. It’s far more effective, dignified and productive than the alternative of COVID-style welfare programs that will drive up inflation and further strain the national debt.
Wilkinson has ruled out further taxpayer dollars for energy projects like potential LNG facilities in New Brunswick, which would have helped eliminate the need for the province to import its natural gas, which it relies upon for power, from the U.S.
However, it did cost the federal government a whopping $34 billion to effectively bail out the Trans Mountain expansion (TMX). Industry players blamed the federal government’s regulatory minefield for jumping ship on the project; Ottawa’s bailout was akin to accidentally setting a car on fire and expecting congratulations for dousing the flames.
If the federal government keeps layering more red tape and regulations onto the construction of new energy projects, it will drive away private sector interest and investment. Loosening this regulatory regime and empowering market forces to expand Canada’s oil and gas industry would be a good test to see just how real “peak oil” actually is.
Continuing to stymie both the growth of our energy exports will push Canada far behind the U.S. Trump is bullish on fossil fuel and wants to aggressively bring industry home and expand American exports abroad.
His administration has suggested that they now see Canada as more of a competitor, and that certainly includes both trade and economics. Trump is already trying to ram through a US$44 billion (C$63 billion) LNG project in Alaska to supply Japan, presenting a threat to B.C.’s growing LNG industry, and possibly rob Canada of a potential overseas partner.
These are unprecedented times and Canada cannot afford to see the largest section of its exportable commodities crippled by government hostility, passive or overt. The Liberals cannot withhold taxpayer dollars for oil and gas support, simultaneously chase away private investment, and then claim to support Canadian energy with a straight face.
Choices have to be made, and Canada requires and deserves a government to make the right ones.
National Post