MP’s August Report – It’s Time to Change Course and Re-invigorate Canada’s Energy Sector

With a Federal election only a few months away, the future of Canada’s energy sector is shaping up to be one of the most heated and contentious points of debate. Two pieces of legislation recently passed into law by the federal government, Bills C-69 and C-48, have clearly set the tone by showing this Government’s vision for Canada’s energy sector – and the consequences are dire. Bill C-69 nicknamed the “No More Pipelines” bill and C-48 “the Tanker Ban” are dramatic in their impact and almost universally misunderstood.

In Bill C-69, the Liberals have implemented longer timelines with no maximum caps for energy sector projects, like pipelines, and increased restrictions and regulations, which are compounded by inconsistent approval processes and vague criteria for environmental assessments. This creates profound uncertainty and unsustainable risk for resource companies driving capital investment and jobs to other countries. While the Bill is referred to as “no more pipelines” it is much more than that, with far reaching implications for all aspects of Canada’s energy sector affecting oil and gas, hydro, nuclear and renewables all across Canada. It will have a significant impact on Alberta; however the nature of this flawed legislation affects every province and territory, which is why many provincial governments are calling it a constitutional crisis. Canada, prior to this legislation, had the most stringent energy sector environmental regulations anywhere in the world and while there is always more that can be done this legislation effectively paralyzes the industry rather than improving environmental standards.

Bill C-48 will ban some oil tanker traffic in northern B.C., and a closer review reveals that it does not impose a universal “ban” but rather is very narrow in its application, and only applies to the west coast – and not the east coast. This proves that Bill C-48’s intent is not to improve transport standards, marine traffic, or protect the safety and ecology of Canada’s oceans let alone B.C.’s northern shore. It is instead another step in limiting Canadian oil development and export by hindering only Alberta and BC’s oil transportation. Tankers have safely transported crude oil to and from Canada since the 1930s. In 2011, 2.2 million tonnes of oil were safely shipped from B.C., and on the east coast, an incredible 82.5 million tonnes of various petroleum products were shipped from 23 ports in Atlantic Canada. There have not been any tanker navigational issues or incidents in 50 years in the port of Vancouver or on the east coast – and Canada has significantly increased our regulations and protections since then.

Canada’s Energy Sector an Irreplaceable Economic Driver

The global demand for energy will continue to grow with estimates showing it will increase by 30% in the next 20 years, with oil maintaining the largest share of the global energy market. Access to energy that is reliable and affordable is critical to achieving economic security and prosperity. Nearly 85% of energy globally–oil, gas, and coal— is consumed by prosperous nations. In many parts of the world there is a dramatic shortage with almost a quarter of the world’s population lacking access to energy. The International Energy Agency has been reporting for 30 years that 1.3 billion people have no electricity whatsoever and 3 billion people or 40% of the world still cook and heat their homes using open fires and simple stoves. Electricity is central to nearly all aspects of the developed world’s livelihood, making access to power fundamental to a higher standard of living and directly related to socioeconomic development. As the fourth largest oil nation in the world, Canada has an opportunity and a responsibility to assist those nations working to overcome energy poverty, while also securing a stable and prosperous future at home.

It is estimated that Canada’s energy sector contributes 11% to Canada’s GDP or approximately $230 Billion – more than any other sector. Under the Liberals, energy investment in Canada has seen its biggest decline since records started being kept 70 years ago and over $100 Billion in proposed projects have been cancelled with the Bank of Canada predicting that there will be no new energy investment in Canada after 2019. Since 2015 the oil and gas sector has lost over 120,000 jobs, more jobs than the entire aerospace sector and almost as many as the entire automotive sector. This year, the International Institute for Management Development (IMD) World Competitiveness Ranking removed Canada from the top 10 most competitive economies in the world – the worst performance in the annual survey’s history, which goes back to 1997. This is a big deal for Canada. Canada can’t afford to lose any more of what our current energy sector contributes to our economy – let alone the potential it has to offer for our future.

Energy Security

Canada has the energy resources to be both profitable and independent – Canada’s oil and gas industry is the largest single driver of our economy, but instead this Liberal government has forced our industry to sell Canada’s oil at a dramatically discounted price, while Canadians pay a premium to import oil from other countries. Canada’s lack of pipelines makes us vulnerable through our dependence on foreign oil and gas suppliers like the US, Venezuela, and Saudi Arabia. It is unacceptable in a country as resource rich as Canada that we import over 70 percent of the oil we consume. The recent amassing of war ships in the Strait of Hormuz and the capture of a British oil tanker by Iran only underscores the need to secure our own energy resources and reduce our dependence on foreign countries who may not act in the best interest of Canada.

The severe restrictions placed on Canada’s resource development and exports by these two Bills will have a profound negative effect on the entire country. More jobs in the Alberta oil patch and in virtually every other sector will be lost due to restrictions on energy production, lack of export capabilities and capital investment fleeing the country. Essentially, a “closed for business” sign has been tacked on Canada’s front door. Without a change of course, the economy will continue to weaken and jeopardize the future of all Canadians. We must restore the conditions that will re-invigorate our energy sector to allow Canada’s economy to thrive again and set us on a path to energy security for generations to come.

 

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