TERRAZZANO, SIMS: Gov’t should scrap carbon taxes, red tape instead of borrowing for pipelines

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Former American president Ronald Reagan once said: “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

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All three things are happening at the same time, right now, in Alberta.

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Governments have taxed and regulated Canada’s oil and gas industry, strangling it to the point where private companies have stopped moving their own money into it.

Now, governments are subsidizing it, with tens of billions of taxpayer dollars.

Standing in the way

Government has caused this problem by standing in the way, now the government is going to blow taxpayers money on the problem while the government is still standing in the way.

Make it make sense.

Prime Minister Mark Carney and Alberta Premier Danielle Smith announced the latest attempt to get an oil pipeline built from Alberta out to B.C.’s west coast.

A new pipeline being built along a previously established corridor so that oil products can be sold on the world market should be a cause for celebration.

Natural resources are good for jobs, the economy and government treasuries.

Pipelines pay for roads, schools and hospitals and lighten the burden on taxpayers.

But here’s the damper on the party: Taxpayers are going to be on the hook to pay for this and it’s not going to be cheap.

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When asked how much money will come out of taxpayers’ pockets during the news conference, Smith didn’t give a number.

“That remains to be negotiated,” Smith said. “We wanted to get the high-level agreement of the partnership, there’ll be the federal government, the provincial government, the Indigenous stake as well as Pembina, so it’ll be negotiated over time.”

The Alberta government knows how much it’s expecting this project to cost, because it included those costs in its pitch to Carney’s Major Projects Office.

“Estimated Project Cost: $35.2 billion to $43.7 billion,” reads a table of the Alberta government’s 85-page submission to Carney.

The document is available on the Alberta government website.

But wait, didn’t the government say this would be a public-private partnership?

Sure, if 10% is considered a partnership.

The private company’s “economic interest through construction will be 10 per cent,” while the federal and Alberta governments “will own equal shares of the balance of the project,” according to the government of Canada.

Taxpayers don’t have the money for this.

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Alberta’s provincial debt will hit more than $100 billion for the first time in history and the federal debt will be more than $1.4 trillion by the end of the year.

This debt means every dollar spent on this pipeline will be borrowed money. The annual interest charges on this pipeline will cost taxpayers more than $1 billion.

Papering over the problem

Governments are blocking pipelines with carbon taxes and red tape and then papering over the problem with taxpayers’ money to get projects built, in spite of their own regulations and taxes.

The Alberta government signed an agreement with the federal government to hike the province’s industrial carbon tax “six and a half times” higher by 2040, according to Carney.

A Leger poll shows 68% of Canadians believe businesses pass most or some of the cost of the industrial carbon tax on to consumers. Meanwhile, just 12% believe businesses pay most of the cost.

Oil companies and economists have stated carbon taxes, the memorandum of understanding with Ottawa and anti-pipeline laws are stopping companies from spending private money to build pipelines in Canada.

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“We have created a set of national policies and regulations that make resource development and investment in Canada uncompetitive with the rest of the world,” Cenovus Energy CEO Jon McKenzie said last month.

It’s unsustainable for taxpayers to keep subsidizing projects because governments are in the way.

The real solution is for politicians to stop blocking development so job creators can build major projects without taxpayers’ money.

Franco Terrazzano is the federal director and Kris Sims is the Alberta director for the Canadian Taxpayers Federation.

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