The top executives of three oil-sands companies took the newsworthy step on Thursday of publishing an open letter asking Canadians to keep the health of the energy industry in mind when they vote in the federal election in October.
Their message wasn’t subtle – a weak oil economy threatens the very soul of Canada, they said. It’s something that has become a common refrain in Alberta.
The letter, which took the form of a full-page ad placed in newspapers (including this one) across the country, entreated voters to urge “Canada’s leaders of all political stripes to help our country thrive by supporting an innovative energy industry.”
The leaders of Cenovus, Canadian Natural Resources and MEG Energy warned that the choice voters make “will impact our ability to fund schools, hospitals, parks and social programs that we as Canadians so deeply value.”
Their message echoes the words of Alberta Premier Jason Kenney, who said in a tweet this week that, “If other provinces and federal politicians want Alberta’s prosperity to keep paying the bills, building roads, schools, and hospitals across Canada, then you have to let us develop our resources, get them to market, and get a fair price for them.”
Mr. Kenney’s argument is that, because Albertan taxpayers contribute a net $20-billion to the federal government every year in income and sales tax, the rest of the country is reliant on them to fund social programs.
There’s some truth to that, although Mr. Kenney’s contention that Albertans send more to Ottawa than they get back in federal transfers elides some key facts. For instance, most federal transfers other than equalization are based on population, which means the largest provinces – Quebec and Ontario – automatically receive way more money than Alberta.
Plus, while it’s true that the average Albertan is paying more in federal income taxes and the GST, that’s because they live in a relatively prosperous economy and are earning and spending more than people in other, less well-to-do provinces. They’re paying more in taxes because they have bigger paycheques, not because Alberta is subject to some special federal levy targeting the province.
Finally, the fact that Alberta has a large deficit caused by the current slump in oil prices, and which is making it hard for Mr. Kenney’s government to pay for school, hospitals and social programs, is not the fault of the federal government.
Instead, Alberta long ago decided to be the only province without a provincial sales tax, while relying on royalties tied to the price of natural resources to make up the difference between low income-tax revenues and relatively high spending.
All that said, there are good reasons for Canadians across the country to wish for a healthy energy industry in Alberta, and to work for that.
It is a huge job creator, providing work for people from every province, including many where employment isn’t easy to come by.
It creates wealth, which makes Canadians richer and better off. And it provides government revenues in the form of federal and provincial royalties, income taxes and sales taxes that do indeed contribute to social-program spending.
But today that has to be weighed against the harms of climate change, and for the need for Canada to meet its carbon-emissions goals under the Paris Agreement. In spite of serious efforts by oil-sands companies to reduce greenhouse gas emissions, they are still the single biggest source of emissions in the country.
What everyone should want – from oil executives to people in other provinces – is higher prices for exported Canadian oil. That puts money in everyone’s pockets, without necessarily increasing emissions.
The one and only way to achieve that is for Alberta producers to get their crude to tidewater, or across the border. That means pipelines, in particular the Trans Mountain expansion that the Trudeau government is trying to stickhandle into existence.
A vibrant oil industry is a good thing for Canada. Efforts to cut emissions, through carbon taxes, regulations and new technologies, are also necessary – for Canada, and the world. As long as the world uses oil, Canada should continue to produce it, even as we bring in policies to discourage its use, or make it cleaner. It’s a tricky balance.