Fraser Forum

Canada’s energy sector gets some gifts (and a lump of coal) in 2017

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Canada’s energy economy received several gifts in time for this holiday season. Some were good, some were, well, not so good.

One of the gifts was from the National Energy Board, which finally exerted its federal authority to approve energy infrastructure projects, ruling that pipeline company Kinder Morgan was not subject to the City of Burnaby’s bylaws that were the last real obstacle to getting the pipeline built. The Trans Mountain expansion is a gift both to British Columbia and Alberta, and will sharply increase Canada’s ability to get its oil to more lucrative markets in Asia.

The second gift came from our neighbours to the south, where Nebraska approved a revised route for the Keystone XL pipeline extension as it passes through the state. As reports suggest, this gift could have a few strings attached, and lead to higher construction costs, but finding paths to refineries on the gulf coast would be a big win for Canada’s energy export economy.

The third gift looks more like a lump of coal than a desirable present. Progressive Conservative Party of Ontario Leader Patrick Brown announced his campaign platform detailing his plan to fix Ontario’s power-sector mess by doing… more of what Premier Kathleen Wynne has been doing. The PC plan is to cut Ontario’s power prices by another 12 per cent, largely by shifting the cost onto current and future taxpayers rather than ratepayers. In other words, hiding it from the power bill.

As Tom Adams observes in the National Post:

Brown’s largest cost shift—$433 million per year to until 2022 at least—is to move conservation costs to taxpayers. Electricity demand in Ontario has been falling since 2005, ratepayers are burdened with a massive surplus of power sold to neighbouring utilities for prices close to zero, and generators are being paid massive but undisclosed amounts to not generate any power. Oblivious to all this, the PCs declare all existing conservation programs to be “worthwhile.”

Still, as the New Year approaches, and given continued energy obstructionism, it’s good for Canada to have gotten any nice gifts user the energy sector this year. So ‘tis the season to be thankful.


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