Will Alberta become a have-not province thanks to Trudeau

[Anonymous]

Canadians owe a debt of gratitude to Albertans for our prosperity. Justin Trudeau has put himself ahead of the nation's well being. Making Alberta a have-not province does not move the climate needle one iota. In fact, by not allowing Canadian oil and gas to compete with foreign sources that do not have our environmental standards, it increases C02 emissions. Virtue signalling and lower living standards are all Trudeau will accomplish.



The implications would be catastrophic for Albertans



With the prime minister's declaration in Glasgow last week that the screws will be tightened on oil and gas emissions to achieve net zero by 2050, it is not far-fetched to suppose that Alberta could eventually become a "have-not" province. Even with good news, such as Amazon's $4-billion investment in a Calgary hub, a declining oil and gas sector will erode Alberta's growth.



Alberta was a have-not province back in 1957, when equalization was introduced. With its oil and gas sector then at an early stage of development, the province received $12 million in equalization payments (about eight per cent of the total paid out by Ottawa). It last received them in 1964-65 and it hasn't been close to have-not status since. In 2019, even after five lean years following the collapse in oil and natural gas prices in 2014, Alberta's GDP per capita was $76,000 (in $2012 dollars), almost 50 per cent more than in the rest of Canada.



Albertans continue to enjoy the highest standard of living in the country but they have also contributed almost two-thirds of a trillion dollars to the rest of Canada since 1960 by paying more in federal taxes than they have received in federal spending. Moreover, the province's growth has enabled it to buy $70 billion a year in imports from the rest of Canada, equivalent to over a fifth of Alberta's GDP.



Many Albertans, politicians included, are unaware that oil and gas extraction creates more real value-added per working hour than any other sector in Canada. Unconventional oil and gas, which now accounts for the lion's share of Alberta's oil and gas production, produced $1,302 of real GDP per working hour in 2019, while conventional extraction generated $590 per hour. That compares to $61 per hour across all Canadian industries (including oil and gas). Not coincidentally, workers in oil and gas are also the best paid in Canada — at an average $90 per hour in 2019, well over twice compensation levels of all industries, which averages about $40 per hour.



To paraphrase Pierre Trudeau's colourful satirization of wage and price controls, what would happen if "zap — the oil and gas sector is dead?" Would Alberta become a have-not province? Based on Statistics Canada's labour productivity data for 2019, the answer is: "Yes, pretty much."



As the table shows, without oil and gas, Alberta would become much poorer. I've assumed that every job in oil and gas extraction, related service industries and oil and gas engineering and refining, which on average generates $350 in real GDP per working hour, is replaced by goods-producing jobs that generate only a quarter as much ($83 per working hour). Under this assumption, Alberta's GDP would fall by almost a third, including estimated multiplier effects.



This net loss would result in Alberta's per capita GDP falling to $52,000 — a shade less than the 2019 national average of $52,380. Alberta would indeed lose its "have" status.



The implications of a roughly one-third drop in income would be catastrophic for Albertans. They would not be able to afford private consumption goods they once enjoyed. Many would fall below the poverty line. People would leave the province and housing prices would plummet. Alberta's government would have to cut back spending on hospitals and schools and reduce social assistance payments.



Nor would the rest of Canada benefit from Alberta becoming a "have-not" province. Canada's GDP would fall almost six per cent. The federal budget deficit would rise by at least another $20 billion — even though equalization payments to other provinces would plummet. Alberta's imports from other parts of Canada would decline by almost $21 billion. With oil and gas accounting for 17 per cent of Canada's exports, the loonie would depreciate sharply, leading to higher import prices and a lower standard of living as measured in U.S. dollars.

 

Alberta politicians should be worried. Calgary's new mayor, Jyoti Gondek, has declared that the climate emergency is her top priority. Maybe she has it backwards. Her city's impact on global emissions is miniscule. Her real challenge is to make sure Calgary does not become a have-not city.



But let's not be completely pessimistic. Perhaps Alberta will do better than these numbers suggest. It may be a cliché to say Alberta's most important resources are, not oil and gas, but its people and their entrepreneurial culture — but it's true. New high-paying activities could develop here in agriculture, logistics, financial services, technology and mining. Moreover, oil and gas will still have a role for many years to come, especially in the production of liquid natural gas, propane, petrochemicals and hydrogen.



These other activities might not generate as much GDP as today's oil and gas industry. But a successful economic transformation would enable Alberta to remain a "have" province, although a somewhat poorer one. For that to happen, however, requires a supportive federal government, not one that's seemingly indifferent about throwing the province to the wolves.

https://financialpost.com/opinion/jackass-mintz-will-alberta-become-a-have-not-province-if-it-loses-oil-and-gas">https://financialpost.com/opinion/jackass- ... il-and-gas">https://financialpost.com/opinion/jackass-mintz-will-alberta-become-a-have-not-province-if-it-loses-oil-and-gas

[Anonymous]

Jagmeet Singh, Justin Trudeau, the Green Party and even the O'Toole Tories are just as ignorant as the people that vote for them.



There's a massive chasm between government policy and our energy reality



It is epically frustrating that in Canada, a country blessed with some of the most abundant energy resources in the world, the majority of the population suffers from profound energy ignorance: the lack of knowledge of how hydrocarbons are used, how critical they are to our daily lives, and the realistic timeline to replace them with a "renewable" alternative.



Right now, wherever you are, look around. Everything you see, from the computer or piece of paper that you are reading this column on, from to the desk that you sit at, to the plastic lining in the coffee cup in front of you, all are either made of, or required the use of, hydrocarbons.



Without oil and natural gas, we would literally be back in the Stone Age, experiencing a fraction of our current standard of living. So how did we get here, where the average Canadian thinks the end of oil is at hand, politicians contemplate the necessity of limiting production growth, and where we have lost sight of how blessed we are as a nation to be gifted with such valuable energy resources produced in one of the most ethically and cleanest manners anywhere in the world?



Let's start at the beginning. How exactly is oil, the largest commodity in the world used, and what are its potential replacements?



Every single day, the world consumes about 100 million barrels and demand is now back to pre-COVID levels despite jet fuel usage (8 per cent of total use) remaining weak due to lingering inconveniences such as quarantines and expensive testing requirements. According to the BP Statistical Review, of the 100 million barrels per day of daily usage, 60 million are for transportation (27 million by cars, 18 million in heavy hauling trucks, 8 million in planes, and the rest in ships and public transit). Just how big of a feat will it be to convert a staggering 1.45 billion vehicles, 29,000 aircraft, and 54,000 ships to renewable fuel sources and what is the timeline for them to reach critical scale?



For cars, the obvious alternative is electrification and in many countries, all new car sales must be emissions free (from the tailpipe, not necessarily the power source) by 2035. Electric car sales were approximately 5 million units in 2020 and while this number will steadily increase as more automakers develop new models at varying price points, how long will it take not just for electric car sales to gain meaningful share of news sales but to displace the 1.4 billion existing install base which will continue to grow for years to come (here's a hint...the Energy Information Administration recently projected that the U.S. internal combustion car fleet won't peak until 2038)?



What of the need to materially increase power generation capabilities to meet this new source of demand (the U.S. would have to roughly double its total energy power), while some simultaneously seek to entirely decarbonize their existing power grid by 2035? How will this massive undertaking occur when many basic raw elements, which are absolutely essential for increasing power generation and building car batteries, are entering into structural deficits such as copper, estimated by Royal Bank of Canada to be at a 32 per cent deficit by 2030, or nickel supply estimated by Rapidan to fall short of demand by 2024?



There is a massive chasm between well-intentioned government policies and our energy reality and yet eventually those two dynamics must eventually converge.



What of industry's ability to produce enough hydrogen to displace the diesel used in heavy hauling trucks or produce renewable jet fuel, which is only now in the pilot project stage? Ignoring the massive financial requirement measured in many billions of dollars, it is estimated to take at least 20 years to reach any semblance of critical mass.



With all of that said, believe it or not, replacing the 60 million barrels per day of oil used in transportation with electrification, hydrogen, and renewable jet fuel is the easy part, relatively speaking. What of the other 40 million barrels of daily consumption that is not used for transportation, such as petrochemicals, plastics, cement, lubricants, rubber, agriculture, makeup, medicine, and over 2,000 other usages? What drives this demand growth and are there substitutions for the hydrocarbon based products that we use and rely on every day?



The world's population today is approximately 7.7 billion and according to the United Nations is set to grow by 2 billion people by 2050, the time when the world is meant to reach "net zero" emissions status. With developed countries such as Canada, the United States, and Japan reaching peak population, the addition of 2 billion people will largely occur in Africa and Asia, areas of the world where living standards today are low yet are set to rise and this has a direct read through to how much hydrocarbons they will consume.



The average person in the world consumes only five barrels of oil per year yet in the United States, where higher living standards translates to higher hydrocarbon demand, that number is roughly 21. Thus, as the world's population grows by 26 per cent and with it average hydrocarbon usage per person, how is it fathomable that the global demand for such things as plastics, fertilizer, mined metals for electronics, and specialty chemicals will fall?

https://financialpost.com/commodities/energy/eric-nuttall-theres-a-massive-chasm-between-government-policy-and-our-energy-reality">https://financialpost.com/commodities/e ... gy-reality">https://financialpost.com/commodities/energy/eric-nuttall-theres-a-massive-chasm-between-government-policy-and-our-energy-reality

[Anonymous]

Canadians owe a debt of gratitude to Albertans for our prosperity. Justin Trudeau has put himself ahead of the nation's well being. Making Alberta a have-not province does not move the climate needle one iota. In fact, by not allowing Canadian oil and gas to compete with foreign sources that do not have our environmental standards, it increases C02 emissions. Virtue signalling and lower living standards are all Trudeau will accomplish.



The implications would be catastrophic for Albertans



With the prime minister's declaration in Glasgow last week that the screws will be tightened on oil and gas emissions to achieve net zero by 2050, it is not far-fetched to suppose that Alberta could eventually become a "have-not" province. Even with good news, such as Amazon's $4-billion investment in a Calgary hub, a declining oil and gas sector will erode Alberta's growth.



Alberta was a have-not province back in 1957, when equalization was introduced. With its oil and gas sector then at an early stage of development, the province received $12 million in equalization payments (about eight per cent of the total paid out by Ottawa). It last received them in 1964-65 and it hasn't been close to have-not status since. In 2019, even after five lean years following the collapse in oil and natural gas prices in 2014, Alberta's GDP per capita was $76,000 (in $2012 dollars), almost 50 per cent more than in the rest of Canada.



Albertans continue to enjoy the highest standard of living in the country but they have also contributed almost two-thirds of a trillion dollars to the rest of Canada since 1960 by paying more in federal taxes than they have received in federal spending. Moreover, the province's growth has enabled it to buy $70 billion a year in imports from the rest of Canada, equivalent to over a fifth of Alberta's GDP.



Many Albertans, politicians included, are unaware that oil and gas extraction creates more real value-added per working hour than any other sector in Canada. Unconventional oil and gas, which now accounts for the lion's share of Alberta's oil and gas production, produced $1,302 of real GDP per working hour in 2019, while conventional extraction generated $590 per hour. That compares to $61 per hour across all Canadian industries (including oil and gas). Not coincidentally, workers in oil and gas are also the best paid in Canada — at an average $90 per hour in 2019, well over twice compensation levels of all industries, which averages about $40 per hour.



To paraphrase Pierre Trudeau's colourful satirization of wage and price controls, what would happen if "zap — the oil and gas sector is dead?" Would Alberta become a have-not province? Based on Statistics Canada's labour productivity data for 2019, the answer is: "Yes, pretty much."



As the table shows, without oil and gas, Alberta would become much poorer. I've assumed that every job in oil and gas extraction, related service industries and oil and gas engineering and refining, which on average generates $350 in real GDP per working hour, is replaced by goods-producing jobs that generate only a quarter as much ($83 per working hour). Under this assumption, Alberta's GDP would fall by almost a third, including estimated multiplier effects.



This net loss would result in Alberta's per capita GDP falling to $52,000 — a shade less than the 2019 national average of $52,380. Alberta would indeed lose its "have" status.



The implications of a roughly one-third drop in income would be catastrophic for Albertans. They would not be able to afford private consumption goods they once enjoyed. Many would fall below the poverty line. People would leave the province and housing prices would plummet. Alberta's government would have to cut back spending on hospitals and schools and reduce social assistance payments.



Nor would the rest of Canada benefit from Alberta becoming a "have-not" province. Canada's GDP would fall almost six per cent. The federal budget deficit would rise by at least another $20 billion — even though equalization payments to other provinces would plummet. Alberta's imports from other parts of Canada would decline by almost $21 billion. With oil and gas accounting for 17 per cent of Canada's exports, the loonie would depreciate sharply, leading to higher import prices and a lower standard of living as measured in U.S. dollars.

 

Alberta politicians should be worried. Calgary's new mayor, Jyoti Gondek, has declared that the climate emergency is her top priority. Maybe she has it backwards. Her city's impact on global emissions is miniscule. Her real challenge is to make sure Calgary does not become a have-not city.



But let's not be completely pessimistic. Perhaps Alberta will do better than these numbers suggest. It may be a cliché to say Alberta's most important resources are, not oil and gas, but its people and their entrepreneurial culture — but it's true. New high-paying activities could develop here in agriculture, logistics, financial services, technology and mining. Moreover, oil and gas will still have a role for many years to come, especially in the production of liquid natural gas, propane, petrochemicals and hydrogen.



These other activities might not generate as much GDP as today's oil and gas industry. But a successful economic transformation would enable Alberta to remain a "have" province, although a somewhat poorer one. For that to happen, however, requires a supportive federal government, not one that's seemingly indifferent about throwing the province to the wolves.

https://financialpost.com/opinion/jackass-mintz-will-alberta-become-a-have-not-province-if-it-loses-oil-and-gas">https://financialpost.com/opinion/jackass- ... il-and-gas">https://financialpost.com/opinion/jackass-mintz-will-alberta-become-a-have-not-province-if-it-loses-oil-and-gas

Justin Trudeau will have help from Rachel Notley if Albertans return her to power in seventeen months.

[Anonymous]

All blue collar workers in Canada will be have-nots thanks to Trudeau.

[Anonymous]

We had the NDP in power for a long time. We were a have-not province. We are also a major enegy producing province. We have the same problem as Alberta. Ottawa block us from getting our products to market. And the federal carbon tax is more punishing on us than Quebec.



We will be a have-not province again, but it won't be Regina that gets us there. This time it will be Ottawa. This is why I am a Western separatist.

[@realAzhyaAryola]

I sure hope not.

[Anonymous]

We had the NDP in power for a long time. We were a have-not province. We are also a major enegy producing province. We have the same problem as Alberta. Ottawa block us from getting our products to market. And the federal carbon tax is more punishing on us than Quebec.



We will be a have-not province again, but it won't be Regina that gets us there. This time it will be Ottawa. This is why I am a Western separatist.

The NDP used to be a populist party that had working people's backs. Today, it's an elitist top down party that sticks knives in the backs of working class people.

[Thiel]

Canadians owe a debt of gratitude to Albertans for our prosperity. Justin Trudeau has put himself ahead of the nation's well being. Making Alberta a have-not province does not move the climate needle one iota. In fact, by not allowing Canadian oil and gas to compete with foreign sources that do not have our environmental standards, it increases C02 emissions. Virtue signalling and lower living standards are all Trudeau will accomplish.



The implications would be catastrophic for Albertans



With the prime minister's declaration in Glasgow last week that the screws will be tightened on oil and gas emissions to achieve net zero by 2050, it is not far-fetched to suppose that Alberta could eventually become a "have-not" province. Even with good news, such as Amazon's $4-billion investment in a Calgary hub, a declining oil and gas sector will erode Alberta's growth.



Alberta was a have-not province back in 1957, when equalization was introduced. With its oil and gas sector then at an early stage of development, the province received $12 million in equalization payments (about eight per cent of the total paid out by Ottawa). It last received them in 1964-65 and it hasn't been close to have-not status since. In 2019, even after five lean years following the collapse in oil and natural gas prices in 2014, Alberta's GDP per capita was $76,000 (in $2012 dollars), almost 50 per cent more than in the rest of Canada.



Albertans continue to enjoy the highest standard of living in the country but they have also contributed almost two-thirds of a trillion dollars to the rest of Canada since 1960 by paying more in federal taxes than they have received in federal spending. Moreover, the province's growth has enabled it to buy $70 billion a year in imports from the rest of Canada, equivalent to over a fifth of Alberta's GDP.



Many Albertans, politicians included, are unaware that oil and gas extraction creates more real value-added per working hour than any other sector in Canada. Unconventional oil and gas, which now accounts for the lion's share of Alberta's oil and gas production, produced $1,302 of real GDP per working hour in 2019, while conventional extraction generated $590 per hour. That compares to $61 per hour across all Canadian industries (including oil and gas). Not coincidentally, workers in oil and gas are also the best paid in Canada — at an average $90 per hour in 2019, well over twice compensation levels of all industries, which averages about $40 per hour.



To paraphrase Pierre Trudeau's colourful satirization of wage and price controls, what would happen if "zap — the oil and gas sector is dead?" Would Alberta become a have-not province? Based on Statistics Canada's labour productivity data for 2019, the answer is: "Yes, pretty much."



As the table shows, without oil and gas, Alberta would become much poorer. I've assumed that every job in oil and gas extraction, related service industries and oil and gas engineering and refining, which on average generates $350 in real GDP per working hour, is replaced by goods-producing jobs that generate only a quarter as much ($83 per working hour). Under this assumption, Alberta's GDP would fall by almost a third, including estimated multiplier effects.



This net loss would result in Alberta's per capita GDP falling to $52,000 — a shade less than the 2019 national average of $52,380. Alberta would indeed lose its "have" status.



The implications of a roughly one-third drop in income would be catastrophic for Albertans. They would not be able to afford private consumption goods they once enjoyed. Many would fall below the poverty line. People would leave the province and housing prices would plummet. Alberta's government would have to cut back spending on hospitals and schools and reduce social assistance payments.



Nor would the rest of Canada benefit from Alberta becoming a "have-not" province. Canada's GDP would fall almost six per cent. The federal budget deficit would rise by at least another $20 billion — even though equalization payments to other provinces would plummet. Alberta's imports from other parts of Canada would decline by almost $21 billion. With oil and gas accounting for 17 per cent of Canada's exports, the loonie would depreciate sharply, leading to higher import prices and a lower standard of living as measured in U.S. dollars.

 

Alberta politicians should be worried. Calgary's new mayor, Jyoti Gondek, has declared that the climate emergency is her top priority. Maybe she has it backwards. Her city's impact on global emissions is miniscule. Her real challenge is to make sure Calgary does not become a have-not city.



But let's not be completely pessimistic. Perhaps Alberta will do better than these numbers suggest. It may be a cliché to say Alberta's most important resources are, not oil and gas, but its people and their entrepreneurial culture — but it's true. New high-paying activities could develop here in agriculture, logistics, financial services, technology and mining. Moreover, oil and gas will still have a role for many years to come, especially in the production of liquid natural gas, propane, petrochemicals and hydrogen.



These other activities might not generate as much GDP as today's oil and gas industry. But a successful economic transformation would enable Alberta to remain a "have" province, although a somewhat poorer one. For that to happen, however, requires a supportive federal government, not one that's seemingly indifferent about throwing the province to the wolves.

https://financialpost.com/opinion/jackass-mintz-will-alberta-become-a-have-not-province-if-it-loses-oil-and-gas">https://financialpost.com/opinion/jackass- ... il-and-gas">https://financialpost.com/opinion/jackass-mintz-will-alberta-become-a-have-not-province-if-it-loses-oil-and-gas

With the exception of Joe Biden I can't think of any other G20 leader who would sacrifice their prosperity for nothing,

[Anonymous]

It aint just Alberta that wants respect. We have the best premier in Canada by a country mile.



Scott Moe and Saskatchewan deserve respect and understanding, not ridicule

https://torontosun.com/opinion/columnists/lilley-scott-moe-and-saskatchewan-deserve-respect-and-understanding-not-riddicule?fbclid=IwAR036DknaouEELCTcNYFipk2S6OJVqHXLUCT40dGod4DHv8fkWhLTONhX4I">https://torontosun.com/opinion/columnis ... WhLTONhX4I">https://torontosun.com/opinion/columnists/lilley-scott-moe-and-saskatchewan-deserve-respect-and-understanding-not-riddicule?fbclid=IwAR036DknaouEELCTcNYFipk2S6OJVqHXLUCT40dGod4DHv8fkWhLTONhX4I



Take the reaction to Saskatchewan Premier Scott Moe saying he wants more autonomy for his province and for it to be treated like a nation within a nation. Moe made the comment, an extension and expansion of ideas he's advocated before, while appearing on the Roy Green Show last Sunday.



"We're really starting to feel the differences between Saskatchewan and where our federal government is heading, is we're actually, at this point in time ... more like a nation within Canada," Moe said.



He was discussing the moves by the Trudeau government at the COP26 summit in Glasgow to unilaterally announce hard caps on greenhouse gas emissions without consultation, but his frustration with Ottawa is wider than just that issue. And his frustration is not new for those who have been paying attention.



"In light of the federal government's continued attacks on our economy, in particular our energy sector, our government needs to assert and protect Saskatchewan's economic sovereignty," Moe told me via email Thursday.



"This would not be necessary if we could count on our federal government to advance Saskatchewan's economic interests. But we can't."



Moe wants more powers for his province over immigration, policing, taxation, responsible firearms policy and international relations. All powers Quebec currently exercises, in fact, Ontario also exercises many of them.



And who could support provinces collecting more of their own tax revenue? Well, other than every party recognized in the House of Commons right now – they all support giving Quebec more taxation powers, it was an issue in the last election.



Canada is supposed to be a federation of provinces coming together to allow the federal government to handle things that they are best suited too. People in Eastern Canada though tend to view the prairies as if they are still territories, not equal partners – it's like the kid brother you won't let grow up.



It's a viewpoint that is quite prevalent in the current federal government and it shows up in their policies and attitudes towards the West.



So instead of dismissing people like Premier Moe when they speak up about their frustrations, our establishment pundits and our elected leaders could try to understand where the frustration is coming from. Instead, they downplay any concerns raised West of the Ontario border while jumping to assure Quebec at every turn.



That's a recipe for a future national unity crisis.