Lack of pipelines costs Canadians

Pipelines and the energy they transport are important to Canadians. They play a major role in our daily lives and bring many benefits to our economy. This has been true throughout our country’s history and will continue to be so in the future.

This reality means that a lack of pipelines is costing Canadians.

It’s hurting the Canadian economy.

TD Bank released a study in December of last year that indicates just how important Canada’s oil and gas sector is to the health of the Canadian economy:

“TD Economics has previously calculated that the contribution from increased investment in Canada’s oil and gas sector accounted for 20% of Canada’s economic growth experienced in 2010 and 2011. And, can be a major contributor to growth in the future, but only if new markets are accessed.”

The report goes on to say that without this market access, the future looks grim.

“In a 2012 report, the Canadian Energy Research Institute (CERI) estimated that if the current major pipeline expansion projects which are in the works do not get built, thereby constraining future oil production in Western Canada, Canada would forego as much as $1.3 trillion of GDP (in 2010 Canadian dollars) and $276 billion in taxes from 2011 to 2035.”

It’s hurting regular Canadians.

The current lack of pipelines means that Alberta’s oil sands bitumen is selling at a major discount. According to a recent article in the National Post, “the unexpectedly wide discount of (Alberta’s) crude to the world market price is expected to cause a $3-billion deficit this year.”

And smaller profits for companies mean fewer royalties for the Alberta government and less corporate taxes paid to the federal and provincial governments. Quoted in a recent Calgary Herald article, Natural Resources Minister Joe Oliver emphasized just how serious this issue is and pointed out that average Canadians will feel the pinch in the form of job losses:

“If we do not take heed of warnings and diversify our markets for energy by building infrastructure like pipelines, then our resources will be stranded and we will lose jobs and businesses in Canada,” Oliver told the Saint John Board of Trade last month.

“We’re losing $50 million every single day – $18 to $19 billion every year – because our resources are landlocked.”

The TD report notes that Canada’s oil sector can be a major contributor to the country’s economy, creating jobs and generating tax revenues to help fund social priorities. But with these natural resources landlocked, the provincial and federal governments have to rethink their budgets, including stable funding for programs and services. In the same Herald article, Alberta Finance Minister Doug Horner said such considerations will be a long-term concern.

“There are certainly some dark clouds … that are going to be impeding Alberta’s economic situation for the next little while,” he said. “We’re going to do everything … to control costs, and to hit our targets, and that’s going to be meaning some tough choices for the ministers.”

The Canadian Energy Pipeline Association represents Canada’s transmission pipeline companies who operate approximately 110,000 kilometres of pipelines in Canada. In 2011, these energy highways moved approximately 1.2 billion barrels of liquid petroleum products and 5.3 trillion cubic feet of natural gas. Our members transport 97 per cent of Canada’s daily natural gas and onshore crude oil from producing regions to markets throughout North America.