Home August 2018 Say Hello to Pipeline Canada

Say Hello to Pipeline Canada

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Frank Atkins

I was just starting my career as an economist at the time Trudeau the Elder was ruining the Canadian economy. From an economic perspective, the Elder did many strange things, and Trudeau the Junior seems to be following his father’s path. One of the least defensible economic policies of both men is to run large fiscal deficits when the economy is growing. This is supposed to be the time of the economic cycle when the government gets out of the way and lets the economy function on its own. However, being socialist seems to mean that you do not believe the economy can function without your help.

We now have the Junior repeating an odd policy that was engineered by his father. I remember the day quite clearly when Marc Lalonde, who was finance minister at the time, rose in the House of Commons to announce the government was buying PetroFina, and creating Petro-Canada. Thirty years later, Petro-Canada was absorbed by Suncor, having become a bloated inefficient bureaucracy. Now in 2018, the Junior has announced the federal government is buying Trans Mountain pipeline for $4.5 billion. One irony here is that on the same day the announcement was made, the auditor general released a scathing report, basically saying the government was incapable of running almost everything. Auditor general Michael Ferguson concluded there were fundamental failures of project management, and that Canada has a “broken government system.” This makes me wonder how, given that the auditor general claims the government cannot manage anything, the Junior can grandly announce, “Were going to get that pipeline built.”

Political reaction to this announcement was divided on predictable ideological lines. The Conservatives basically stated the government mishandled this whole issue by not providing investors with the certainty that was needed for the private sector to build this pipeline. The NDP fell back on their usual climate change rhetoric stating the government has failed future generations on climate change.

There is some truth in the Conservative’s position on this deal. The government dithered and delayed and did not seem to be able to make up its mind as to what was the correct thing to do. It appears the Liberals were afraid to stand up to Premier Horgan for fear of losing votes in British Columbia. Anticipating the climate change criticism, the government insisted this whole transaction must go together with measures, such as carbon taxes, to constrain greenhouse gas emissions. This is somewhat odd, as the government is trying to get a pipeline built that may increase emissions that the left wing says is causing climate change, while at the same time claiming to be environmentalists with the imposition of carbon taxes.

In the end, this is a typical government convoluted initiative. I have confidence this will be entirely mismanaged, and we will be saddled with the son of Petro-Canada, which will come to be called Pipeline Canada.

Frank Atkins is a senior fellow at the Frontier Centre for Public Policy.

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