A business crowd of about 400 leapt to their feet in a standing ovation Friday at the suggestion that it should be illegal for Canadian governments to collect carbon taxes until there are new export pipelines delivering Alberta crude oil to world markets.
“Until there are pipelines leaving Alberta – plural – and there is oil flowing through them that will go to international markets, and US$40 price differentials are no longer the thing, until that time, it should be illegal for two lips to close on the phrase, ‘carbon tax,'” said pundit Rex Murphy.
The former CBC broadcaster and long-time defender of the oil industry ended a fiery speech by criticizing environmentalists and federal politicians alike for stalling pipelines needed to relieve a glut of oil in Western Canada that is blamed for Western Canadian Select bitumen-blend crude trading at as much as US$52 per barrel less than New York-traded West Texas Intermediate.
Watch below: During a speech to Alberta’s Chamber of Commerce on Thursday, Justin Trudeau said Canada’s economy is losing an estimated $80 million a day selling oil at a discount.
On the sidelines, executive fellow Ted Morton with the University of Calgary’s School of Public Policy said Murphy’s speech resonates with many in the oilpatch who feel betrayed by the government in Ottawa despite Alberta’s financial contributions to the country.
“We’re the Newfies of the West, right? We’ve never really been loved by Central Canada, neither Ontario nor Quebec, so there’s this lingering suspicion that Ottawa doesn’t work very well for us,” he said.
“The question of Alberta-Ottawa relations is very much a raw nerve in Alberta right now.”
Trudeau said on Thursday the federal government is addressing oil producer concerns by buying the Trans Mountain pipeline and its expansion project for $4.5 billion last summer and by continuing to try to get the expansion built after the Federal Court of Appeal struck down its National Energy Board approval in August.
Hundreds of protesters picketed his speech in downtown Calgary.
Watch below: The day after his government boasted about the health of the national economy in its fiscal economic statement, Prime Minister Justin Trudeau headed to Calgary where he encountered angry Albertans who feel neglected by Ottawa.
Voluntary production cuts of as much as 160,000 barrels of oil per day in November and December because of the low prices could shave up to half a percentage point from fourth-quarter Canadian gross domestic product, said TD Economics in a report on Friday.
It added it expects the discounts on heavy and light oil to moderate over the next two quarters, allowing the deferred activity to be recouped as 2019 progresses, resulting in only a muted national impact but more substantial affects in Alberta and Saskatchewan.
Laura Dawson, a Canadian who is director of the Canada Institute at the Woodrow Wilson International Center for Scholars in Washington, was critical of the federal government’s approach to energy policy and rising costs of doing business generally in Canada versus the United States in her forum speech.
“I think there are some things in the U.S.-Canada cost gap we simply can’t deal with, like the tariffs the U.S. is putting up, that’s going to attract investment to the U.S. because people are going to be afraid of being shut out, but on taxes, we’ve got to look at that,” she said in an interview.
She added the “incoherence of Canadian carbon pricing,”
where one province’s regime is different than another, is also an issue impeding Canadian competitiveness.
© 2018 The Canadian Press