If only Ottawa valued oil as much as dairy
Canadians were treated to a news report this week that simply served to confirm the blindingly obvious: Alberta’s valuable oil still can’t find its way to markets because our governments have obstructed the necessary infrastructure that private companies had been all too willing to build, at their own expense.
The lack of pipeline capacity is an issue that needs no repeating here today. But Alberta continues to produce more and more oil and, lacking the pipes and trains to take it all, it is now running out of storage capacity for extracted oil, too. This is contributing to even more downward pressure on the price of Alberta crude, which already sells at a deep discount compared with global prices because Alberta producers are in such a weak position. As the Financial Post’s Geoffrey Morgan reported recently, the kind of heavy crude produced in Alberta that was recently trading at US$19.49 in Hardisty, Alta., was simultaneously worth US$64.74 in Houston — if you could somehow find a way to get it there.
When the Ontario auto sector’s ability to export parts and vehicles into the U.S. market was threatened by U.S. President Donald Trump, the federal Liberal government hurried to come to terms with Americans on a new trade deal. When the protectionist Trump slapped tariffs on Canadian steel and aluminum exports, Ottawa immediately responded with targeted retaliatory tariffs of our own.
But when Alberta’s pipeline capacity is so constrained that it must warehouse valuable crude even as prices reach levels not seen in years, what does Ottawa do? It nationalizes the existing Trans Mountain pipeline in hopes it can expand it later. Much later, evidently.
It’s hard not to notice how to this Liberal government, a threat to Canadian exports that occurs in Central Canada is a crisis requiring an immediate solution, while a threat in the West ... is not. One could further compare and contrast the lack of help to Alberta with favours lavished upon Quebec’s aviation sector, or (largely) Eastern Canadian dairy farmers.
In the meantime, Alberta carries on as best it can. But the province has been unfairly targeted by activists who have manipulated governments in B.C. and Ottawa into stymieing exports of oil, costing our economy billions, even while production continues to grow.
We are all poorer for this inexcusable fiasco. And until Alberta gets the pipelines it needs, all Canadians will continue to pay the price of this failure. Quite literally.