By: Alan Yu - Fort St. John resident and founder of FSJ for LNG
Published: Fort Nelson Newspaper
Issuing a ban on oil tankers on the West Coast, Prime Minister Justin Trudeau is creating an economically-damaging double-standard that has the potential to steer the Canadian economy onto the rocks.
Trudeau is fulfilling his campaign promise by having his government introduce legislation banning oil tanker traffic along British Columbia's north coast. While it may be laudable for a politician to keep a campaign promise once elected, some sober second thought would have shown the Prime Minister that such a ban would effectively landlock the third largest oil reserves in the world.
Next to Saudi Arabia and Venezuela, Canada has the third largest known reserves of oil. Our currently landlocked oil and gas reserves contribute a fifth of Canada's total exports. As noted by prominent economist Patricia Mohr, crude oil exports remain the biggest trade category yielding a positive trade surplus. This is a critical component of the overall Canadian economy that Trudeau and his government would be foolish to imperial.
Not only do our oil and gas exports keep the Canadian economy humming, they could easily be further developed to double or triple their financial impact on our country by opening up exports on both coasts. This, in turn, would pull in more foreign currency into Canada's tax coffers to finance our schools, health care, infrastructure, and other social programs. The world will not reduce its craving for fuel just because Canada won't export it. The world would simply source its oil from other countries.
It's little comfort that the federal Liberal government's proposed legislation exempts LNG tanker ships from this ban. Canadian oil and gas producer must compete on a decidedly-uneven playing field against countries with vastly different tax regimes. Oil-rich and LNG-exporting Brunei has no personal taxes. The United Arab Emirates government does not impose income taxes on companies or individuals living in the country. In contrast, Canadian oil and gas producers contribute significant amounts to our country in corporate and personal taxes.
The federal willingness to play ducks and drakes with our economy for the sake of harvesting green-leaning votes is also reflected in the results of the last BC provincial election. An already-deep urban-rural divide got deeper with both the NDP and the Greens concentrating their campaigns in the Greater Vancouver and Greater Victoria urban centers of the province while ignoring the rural, resource-rich Interior. They now have more combined seats than the pro-resource development BC Liberals.
This troubling trend shows every sign of growing nationally. Some 80 per cent of Canadians live in urban areas near the US border removed from resources and resource towns. They have no contact with the resources they rely upon for their standard of living every day. Two decades of intense campaigning by eco-activists has convinced these 80 per cent to oppose natural resource development despite the fact that it is still a major contributor to the national economy. The B.C. coastal tanker ban and the popularity of the not-so-resource friendly NDP and Greens in the urban areas of BC are signs that many Canadians have forgotten that their economy was first built on -- and is still dependent upon - natural resource development.
Pressure from urban-based environmentalists has led to hurdles and delays in approving and developing new resource projects. This is a sharp contrast to what is happening in the United States, where President Donald Trump is tearing down hurdles against oil and gas exploration and development while putting up what appear to be trade barriers to protect local US production.
Prime Minister Trudeau's tanker ban legislation is clearly aimed at consolidating support among the urban 80 per cent, who comprise a huge voting bloc. And as yet, there are no public consultations scheduled to hear about how Canadians feel about the ban. Voices have already been raised in opposition -- voices Trudeau would do well to heed, including those of First Nations backing the $14-billion Eagle Spirit Energy Project who said in a press release on May 12:
" As Chiefs from British Columbia and Alberta, we are very disappointed with the inappropriate actions taken today by Prime Minister Trudeau and the Federal Government by introducing a tanker ban on Canada's West Coast. We feel strongly that a blanket tanker moratorium is not the answer. Once again, government and international environmental lobby groups want to make decisions for out communities."
If indeed the reason for the tanker ban is to preserve the environment, why single out the West Coast? The East Coast welcomes Saudi Arabian, Nigerian and Venezuelan oil tankers in its ports all year round. Eastern Canada imports more than $35 billion of oil per year, taking money out of Canada, paying for the wages of workers overseas when we have the third largest deposits of oil in the world.
So the question to the Prime Minister is this: why the double-standard? Why ban tankers in the West and not the East? Why cripple our oil export potential, which could balance our budget, provide jobs to thousands of Canadians while generating funds for our health care, education, and infrastructure? Why is the eastern part of Canada not using Canadian oil and gas? My suspicion is this ill-advised ban is based on counting votes, not the good of our economy.