Liberal Government Must Champion and Support Canada’s Dynamic Natural Resources Sector
Canadian natural resource development creates millions of jobs, provides revenue to all levels of government, and raises the standard of living for Canadians in every community. That’s particularly true of the energy sector, but Liberal policies risk the long-term future of Canadian oil and gas development.
Energy is Canada’s biggest private sector investor. It provides more than 800,000 jobs across all provinces and territories, and $187 billion in GDP.
The potential for Canada’s global role as a responsible supplier of energy, technology, and regulatory expertise is boundless, but it’s dependent on Canada connecting with additional major export markets.
Canadian environmental standards, regulations, compliance, enforcement, performance, and transparency for energy development and transportation are second to none. Canada’s pipeline monitoring system has the strongest safety standards in the world. Canada is a global leader in energy innovation and environmental stewardship.
Canada is the fifth largest producer of oil, with the third largest proven oil reserves in the world. Unlike most major oil producers globally, Canada is a stable and free democracy where natural resources belong to, and benefit, citizens broadly. The regimes in most other major energy producing countries have abysmal environmental, labour and human rights records where resource development is rife with corruption and benefits a wealthy few.
Despite Canada’s outstanding competitive and capacity advantages, only four per cent of the world’s daily oil production comes from Canada, which is forced to be a global oil price taker, not a price maker. Energy is Canada’s second biggest export, of which 99 per cent is imported by the United States. But, the United States is now Canada’s most significant energy competitor, reducing costs and red tape, ramping up domestic oil production to enhance American energy independence, and exporting crude oil to the world for the first time in 40 years.
Therefore, diversifying export markets is crucial to Canada’s long-term economic growth.
Canada must expand export markets for oil and gas, but the Liberals vetoed Northern Gateway and stacked the deck against Energy East—Canada’s only two opportunities for access to tidewater to deliver Canadian energy to the Asia Pacific and to Europe. Of Liberal pipeline approvals that Conservatives have always supported, Enbridge’s Line 3 increases capacity into the US and the majority of the oil transported in Kinder Morgan’s Trans Mountain pipeline goes to refineries in Washington. And the Liberal Oil Tanker Moratorium Act will shut down a $16 billion, First Nations led pipeline from Alberta to British Columbia.
In the last two years, energy investment in Canada, on which hundreds of thousands of Canadian jobs depend, has declined the most than in any other two year period since 1947. The over $50 billion in losses is equivalent to losing roughly 75 per cent of Canada’s auto manufacturing, and nearly the entire aerospace industry. It’s not just prices, it’s policy.
Since the 2015 election, the Liberals have undermined confidence in the regulator, and have created a regulatory vacuum for energy developers in Canada. They’ve imposed new hurdles, delays, rule changes, called for phasing out the oil sands, and added costs and roadblocks to the oil and gas sector—already, the most heavily regulated industry in Canada, by all levels of government. Regulatory and fiscal policies are very much key factors in the economics and business decisions about multi-year, multi-billion dollar energy projects for private sector companies.
The Liberals must table their long overdue regulatory review legislation sooner than later, to give certainty and clarity to energy investors, proponents, and workers. They need to champion Canadian natural resources, Canadian innovation, and Canadian jobs so Canada can once again be an attractive jurisdiction for energy investment. Canada must be competitive so Canadian oil and gas can continue to deliver economic and social benefits to all Canadians, and to the world.