The energy sector makes more money, employs more people and generates a wider impact on Canada’s trade balance than any other business. We grow a lot of wheat, we do a lot of banking, we attract a lot of tourists and we manufacture a lot of things, but when it comes to pure economic power, few things compare with energy.
And the biggest part of that energy equation is petroleum.
The Canadian petroleum industry depends on oil exports to employ people and enrich the country generally. Yet almost 100 percent of the oil Canada exports goes to the United States — primarily to the midwest. Extending that reach to the US Gulf Coast, as the Keystone XL pipeline proposes to do, is a good thing. But is it enough?
Most trade relationships — and all successful ones — are interdependent, with each side benefiting to a similar degree. Where our oil exports are concerned, however, Canada depends almost wholly on the United States.
But the United States does not depend on Canada for its supply. It has several sources for the oil it imports, albeit much of it from areas with poor records of environmental performance, worker safety and human rights. But the supply is there nonetheless.
This is not a balanced situation, nor a healthy one for Canada. Either directly or subtly, Canada is vulnerable to US pressure where pricing and other aspects of selling our energy are concerned.
The solution is to create access to other markets besides the United States, and the most promising of these are in Asia. We need to move our oil from its landlocked location to the Pacific coast. And we need a pipeline to do it.
Without an alternative export market, Canada could suffer a dramatic blow to its economy and its standard of living. The US, in the energy political arena, has proved to be an unreliable partner. And I believe the average Canadian citizen is well aware of that.
Revenues are measured in tens of billions of dollars pouring into provincial and federal coffers every year. The Canadian Energy Research Institute estimates that the oil sands industry alone will pay government revenues of more than $775 billion in taxes and royalties between 2010 and 2035.
If this source of income vanishes, federal and provincial governments will have to either cut services or raise taxes substantially.
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My concern about relying on the United States as our sole customer for oil extends beyond the basic economic impacts. It also reflects my identity as a Canadian nationalist.
When we are totally dependent on one market for our largest export, it’s not just our economic wellbeing that is at risk. It’s our basic sovereignty.
It’s also unnecessary. Trust me, Alberta’s and Canada’s environmental policy and enforcement are far more stringent than those in Texas or Illinois. Do we really need a member of the US Congress telling Canadians how to run our energy sector?
If either the Gateway or Transmountain expansion pipelines are completed, it will influence many aspects of Canadian-American relations in Canada’s favour.
We won’t have to be nearly as concerned about American views of our policies, and our voice will be heard more loudly and more clearly.
I appreciate the concerns that environmentalists express about pipelines. I also know the standards that have been set for the proposed new pipelines. That includes the transporting and loading techniques that have been proven safe for 30 years without incident at similar terminals in Sweden, Scotland and Norway. We are dealing with relatively low risks.
To deal with these risks, we’re best served by a combination of sound science and strong regulation. Those elements need to be complemented with a civil discussion that looks at how to fill that glass of opportunity, not dump it over in a fit of NIMBY-ism, partisan politics or fundraising publicity.
We’re Canadians. We can do this. We’re in the driver’s seat.
Photo: Tankers in Burrand Inlet, BC/iStock
