The provincial temper tantrum continues in Alberta, most recently with renewed interest in separating from the rest of Canada. This news item appears mostly to consist of interviewing unnamed seniors in Calgary parking lots about the wisdom of undoing confederation. A CTV sample size of two revealed 100 per cent support for the idea.
Before we begin the sad process of divvying up the national furniture, its important to note that not a single Alberta populist, not even Jason Kenney or Ted Morton, is voicing serious consideration for the notion. This hyperbolic headline appears to have been extracted directly from the posterior of the Alberta media.
But since they brought it up, lets unpack the potential benefits of Canada abandoning Alberta. The Wild Rose province is often portrayed as the economic engine of the country. True?
The Trudeau government just announced $1.6 billion in emergency federal funding to the fossil fuel sector. This is only the beginning of a massive money hole excavated to ease an industry on the way out. Alberta employs about 140,000 people in the oil and gas sector or 6 percent of the provincial total. This outsized demographic just received the equivalent of $11,000 of federal funding per worker. The response will likely be more angry rallies heckling words spoken in French or the mere mention of climate change.
This latest injection of federal money comes on top of the $4.5 billion spent on the Trans Mountain pipeline and the additional $7 billion earmarked for expansion. Didn’t Trudeau pledge to end fossil fuel subsidies? Instead the $1.6 billion in federal funds flung annually at fossil fuels have increased since 2016, including a $275 million gift to build an LNG facility in B.C. and a generous tax write off for the full cost of new machinery and equipment in the energy sector. When Trudeau spoke in Calgary last month 2,000 protesters gathered outside to remind him such largesse from the rest of the nation will generally be greeted with scorn.
It is not just political and monetary capital that will be sacrificed on an oily altar. The energy sector currently accounts for one quarter of Canada’s carbon emissions even though it employs only 1.4 per cent of Canadian workers. Overall emissions and emission intensities have both been steady rising with the presumption that this sacrosanct sector will somehow be exempt from national efforts to curtail climate catastrophe.
Unsecured oil liabilities may top $250 billion
If the oil industry gets what it wants, the rest of the economy will have to shrink overall emissions by 80 per cent to meet our international obligations to hold global temperature increases at 1.5 degrees. Again, expect nothing but ill-informed anger for this special treatment.
Rather than being an economic engine for the rest of the nation, Alberta may soon become a boat anchor. Decades of incompetent regulatory oversight have left the industry with a staggering $260 billion in unsecured environmental liabilities.
According to an internal presentation by the inaptly named Alberta Energy Regulator, unsecured oil industry liabilities may top a quarter trillion dollars, including an estimated $130 billion from bitumen mining, $100 billion from conventional oil and gas, and another $30 billion from pipelines. Of this figure a mere $1.6 billion or 0.6 percent is held in cash security.
When this shocking story was reported in the news media, the Alberta government acted swiftly to deny the findings of its own staff, issue a public apology for negative publicity directed at the oil industry, and announce it was seeking a new president for the AER effective immediately.
Who do you think will be on the hook for oil industry cleanup costs? In the sad tradition of the Giant Mine or Sydney tar ponds it will be taxpayers elsewhere in the country shelling out for cozy and corrupt local governance. However, this time it will be on the scale unheard of in Canadian history.
Our nation has an employed population of 18.4 million, meaning the average working person would have to pony up $14,000 to pay for Alberta’s special relationship with the oil industry.
Admittedly, these numbers represent a snapshot of what the taxpayer would owe if the oil industry shut down tomorrow. Will it really be that bad? It may be far worse. The $260 billion figure is based on liabilities that are growing by the day and industry, by its own admission, is becoming ever less viable. According to the documents made public from AER Vice President Rob Wadsworth, “The number is expected to grow as more data become available.” Unsurprisingly, the AER refuses to make such data available to the taxpaying public that may be on the hook for this ballooning bill.
What the Alberta government does share with the Canadian public is a $10 million advertising campaign, cheerleading the oil industry and the Trans Mountain pipeline, conveniently unencumbered by the accuracy requirements of the Canadian Code of Advertising Standards. One nose-stretcher repeated ad nauseum is how expanded pipeline access to the Pacific will somehow lead to lucrative Asian markets. As has been reported in The Tyee, virtually 100 per cent of tanker shipments from the existing pipeline in the last two years were bound for the U.S.
Even if China did develop a desire for partially-filled relatively small tankers of low value bitumen, is that really a business partner we want to be beholden to? As of Wednesday, three Canadian citizens now languish in Chinese prison in apparent retaliation for the arrest of a Chinese executive in Vancouver since released on bail. But what are human rights and rule of law compared to the almighty price of tar?
Another absurd statement bombarding Canadian airwaves is how increased exports of unprocessed bitumen will somehow help Canada meet our climate targets. Fully four fifths of oil industry emissions will be exempt from Ottawa’s carbon pricing, aptly illustrating the hefty Alberta millstone weighing on Canada’s climate policy.
The next few years will be tough on confederation. Billions in Canadian taxpayer money will shower onto an ungrateful energy sector. Billions more will be spent cleaning up the mess left when previously profitable companies abscond elsewhere. Years of climate progress have already been lost delaying the inevitable transition to future without the bitumen industry.
Maybe Alberta separatists are right. How can Canada continue to carry the weight of such a provincial laggard? Like almost everyone else, I agree our nation is a stronger if we stick together. Alberta is a beautiful province filled with fine people. Energy workers are justifiably furious about wasted opportunities and squandered wealth.
But pretending that boom times are around the corner if only the rest of the country would get out of the way is wishful thinking riding a unicorn. Any Albertans thinking that way should separate themselves from fantasyland.
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