Home Regular Contributors Cody Battershill Policy Flaws Hit Our Energy Sector

Policy Flaws Hit Our Energy Sector

Cody Battershill

It takes real effort to stay up to date with issues around the competitive position of Canadian energy in comparison to the U.S. Once you put in that effort, you soon learn we’re not in great shape.

We already know our economy loses up to $100 million per day due to a lack of pipeline capacity, forcing Canadian producers to sell all our Canadian oil and gas to the U.S. at heavily-discounted prices and that, without pipelines, Canada will forfeit a projected $92 billion in economic activity by 2020. That’s bad for families.

Now comes an editorial from Fraser Institute authors Elmira Aliakbari and Ashley Stedman in which they describe how foreign energy imports today enjoy yet a new competitive edge over Canadian producers, since our federal carbon tax plan includes no import tariff.

The authors remind us that economists generally agree an efficient carbon tax can work if: 1) it’s revenue neutral, with all revenues used to reduce more costly harmful taxes, 2) it substitutes (but doesn’t add to) existing regulations and 3) it prohibits subsidies to energy alternatives including renewables. The authors conclude that, on each of these points, our federal carbon plan falls short.

What’s worse, the authors add, is that any exporter unable to pass its extra carbon costs to world markets will likely see its competiveness diminish further because Canada’s plan fails to include export rebates.

The bottom line is that fair-trade Canadian oil and gas suffers further under the plan, while imports from the U.S. and other supplier countries remain unaffected.

For the sake of Canadians who rely on the jobs and revenues generated by our energy sector, let’s fix the policies that hurt our competiveness and that prevent us from increasing our country’s pipeline capacity. We need action!

Cody Battershill is a Calgary realtor and founder/spokesperson for CanadaAction.ca, a volunteer organization that supports Canadian energy development and the environmental, social and economic benefits that come with it.