GREEN: Carney government’s anti-oil sentiment no longer in doubt

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The Carney government, which narrowly survived a vote of confidence in parliament on Monday, recently released a “second tranche of nation-building projects” blessed by the Major Projects Authority. To have a chance of surviving Canada's harsh regulatory regime, projects must make it onto that Caesar-style “thumbs up, thumbs down” list.

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The first tranche of major projects, released in September, did not include new oil pipelines, but mostly dealt with natural gas, nuclear power, mining, etc. The lack of proposed oil pipelines was not surprising, since Ottawa's regulatory barricade on oil production means that no sane private company would propose such a project. (The first tranche involves government and private sector spending of $60 billion.)

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Another miss for Oilpatch

Now, second tranche of projects Nor does it include the slightest hint of support for the production, transportation and export of oil to markets outside the United States. Again, this is not surprising since the Prime Minister has done nothing to lift the existing regulatory blockade on oil transport from Alberta.

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So what's on the latest list?

There is a “conservation corridor” for British Columbia and the Yukon; more LNG projects (both in British Columbia); more minerals (nickel, graphite, tungsten – all components of electric vehicle batteries); and even more transfers for “clean energy”—again, mostly in British Columbia. And Nunavut is stepping forward with a new hydropower project to power Iqaluit. (The second tranche involves government and private sector spending of $58 billion.)

Without a doubt, many of these projects are worthy endeavors that should not require Major Projects Authority approval to see the light of day, and deserve to be developed through the old-fashioned Canadian process where private sector firms propose the project to Canadian environmental regulators, obtain the necessary and sufficient safety approval, and then build the facilities.

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However, new pipeline projects from Alberta will also easily find their feet under this old regulatory regime based on necessary and sufficient safety approval, without the Carney government further deciding what is and is not important, important to the government rather than the market, and without provincial governments and First Nations putting up endless barriers.

Crystal clear intentions

Regardless of how you view the various projects in the first two tranches, the second tranche makes it clear (if it wasn't already) that the Carney government will follow (or double down on) the Trudeau government's plan to limit Canadian oil production, especially products extracted from the Alberta oil sands. The latest government announcement does not even mention the existence of these products, despite the fact that the oil sands are the fourth largest proven oil reserves in the world. This comes on the heels of the Carney government's first proposed budget, which also reaffirmed the government's commitment to reducing Canada's greenhouse gas emissions, continuing on the path to net zero by 2050, and preserving an all-electric future for Canada's new vehicles starting in 2036.

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It is clear that at this point the Carney government is committed to the policies of the previous Liberal government and has little interest in exploiting the economic value of Canada's oil reserves or the potential global impact Canada could have by exporting its petroleum products to Asia, Europe and other countries overseas. This policy fixation will cost future generations of Canadians dearly.

Kenneth Green is a senior fellow at the Fraser Institute.

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