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Promises, pledges … or puffery? Canada’s election & energy sector Hopes of positive debate on energy during Canada’s election campaign dashed Gary Park for Petroleum News
Canada is in the midst of a federal election campaign, which gives many candidates another chance to trash the petroleum industry.
That means the governing Liberals led by Prime Minister Justin Trudeau and the New Democrats, Greens and Bloc Quebecois, can embark on a free-for-all of pinning all or most of the blame for climate change on oil and natural gas producers.
Trudeau is seeking his third term in power by calling a snap election at the halfway point of his current mandate, claiming he needs early approval to steer Canada through COVID-19 and prepare the country for an economic recovery.
But analysts are increasingly of the view that he will do no better than repeat his minority success in 2019, which means he will continue to need the backing of the minority parties to pass legislation in the House of Commons.
The Conservative party under Erin O’Toole has made surprising gains in the latest polls, indicating Trudeau’s grand plan could be frustrated.
While that speculation builds the socialist New Democrats have been waging their endless campaign to destroy the fossil fuel industry, although party leader Jagmeet Singh has never said when or how he proposes to achieve that end.
The party’s focus for now is on ending subsidies for the industry which Singh said amounted to C$18 billion in 2020, citing a report by the activist U.S.-based Environmental Defense Fund.
Numbers A close look at his numbers show they include multibillion dollar green tech programs - the underpinning of the New Democrats drive to save the planet from environmental destruction - that subsidize car battery plants and low-emission steel production, as well as C$1.7 billion for capping off and cleaning up inactive oil and gas wells.
Challenged by reporters to explain how he would replace what he viewed as petroleum subsidies, Singh said a New Democratic government would invest directly in promoting renewable energy programs and remediating abandoned wells.
The Canadian Association of Petroleum Producers, in refuting the claims of anti-industry organizations, said that for every C$1 the oil and gas industry pays in taxes it uses just 30 cents of the tax exemptions, deductions and credits at its disposal - the lowest of the top five industries.
Economist Jack Mintz, at the University of Calgary’s School of Public Policy, when asked by the Calgary Herald if Canada’s petroleum industry is subsidized, said: “In total, no. The latest calculations we’ve done show the industry, next to finance, is the most highly-taxed sector in the economy.”
Government statistics estimate the industry creates about 522,000 direct jobs, generates about C$10 billion a year in government revenues through taxes and royalties and pumps about C$100 billion into the gross domestic product.
Conservatives Of the other contentious petroleum issues, O’Toole’s Conservatives are calling for a revamp of Bill C-69, which is viewed as a comprehensive regulatory barrier to all petroleum projects that encroach into federal jurisdiction, and a repeal of Bill C-48 which bans oil tankers off the northern coast of British Columbia.
The Conservatives also want an LNG export strategy, a hydrogen energy plan, a pledge to make oil export pipelines a priority and C$5 billion in tax credits for projects to advance carbon capture, utilization and storage or CCUS and develop small modular nuclear reactors.
“We have an energy policy that would ensure Canada can complete projects and get our products to export markets, as opposed to (the governing Liberals) doing everything they can to prevent them,” said Blake Richards, a Conservative candidate in an Alberta constituency.
While defending itself against accusations of benefiting from federal subsidies, CAPP may have undermined its position by asking for a 100% tax break on capital spending and for clean-tech investments.
CAPP, whose member companies account for 90% of Canada’s oil and gas output, said it is “crucially important for the incoming federal government to make policy decisions that position Canada to succeed in an ultra-competitive investment market.”
CAPP Chief Executive Officer Tim McMillan said the proposed tax break would be “vital to developing and commercializing technologies that reduce (greenhouse gas) emissions, water use, and more.”
Alberta Energy Minister Sonya Savage and industry leaders had expressed hope that the campaign might focus on the success of companies in lowering their greenhouse gas emissions by 30% since 2008, and their commitments to achieve net-zero emissions by 2050.
But Savage’s call for “an honest conversation about the importance of the energy sector” shows every sign of being swamped with false claims about federal subsidies.
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