It remains difficult to determine whether the Canadian government is torpedoing every major conventional energy project in the country through malice, incompetence or a greasy mix of the two. For instance we hear that the dreaded Trans Mountain Expansion (TMX to insiders), a private pipeline project the state dragged through such a protracted regulatory nightmare that the backers gave up, only to have the state buy it and start pumping in money, has managed to consume another $2.5 billion more without, you know, moving any fuel. Meanwhile it emerges, painfully, that our highly-paid politicians and their army of highly-paid public servants hadn’t realized that because our handouts would count as income to Volkswagen rather than tax credits (as in the United States) we’ll have to shell out another $2.8 billion to cover the taxes, bringing the subsidy to $16.3 billion not the announced $13.5. Still, it’s just a huge chunk of taxpayers’ money so who cares because we don’t understand our own laws any more than those of economics. And there’s more where that came from. The tax money and the ignorance.
Finance Minister Chrystia Freeland passes the buck on the vast Volkswagen battery subsidy with:
“We were just not, as a government, going to tolerate a situation in which investment was sucked out of Canada, sucked to south of the border, and I don’t think Canadian workers should tolerate that situation”.
Had she read as many books on economics as she’s written, starting with Adam Smith’s The Wealth of Nations, she would understand that if another government decides to subsidize the production of something valuable, the appropriate response is to import it and make its taxpayers’ loss your consumers’ gain. And while it’s all fine and good to puff yourself up and talk about defending workers while picking their pockets, it amounts to saying we’re happy to tolerate a situation where subsidies are sucked out of the country. And for what? So we can sell batteries at a loss to someone whose government was less profligate or less ignorant.
Still, no sum too high to… um… uh… convince Ontario worker people to vote Liberal not the NDP. Although to assume that they understand the economic calculus half as well as they do the political would be to give them too much credit.
Thus on TMX the details are obscure, naturally, since in Canada citizens are treated as unworthy even of basic information by their governments. But the Calgary Herald observed that:
“The government, which guaranteed loans last year that allowed the project to secure $10 billion of private financing, has since provided an additional $2.5 to $3 billion for the Trans Mountain expansion in two separate backstops, according to information posted on the Export Development Canada website. One guarantee was issued in March and the other in May. Last year’s loan guarantees were extended after the costs of the project increased 70 per cent and Finance Minister Chrystia Freeland said that no additional public money would be invested in Trans Mountain.”
What Freeland, once a public intellectual, thought she meant by “no additional public money” is anyone’s guess. Except ours. We can’t make any sense of it.
Then there’s the news, from the other end of the country, that New Brunswick’s iconic home-grown Irving Oil is threatening to bail on oil, Canada or both after attempting in vain to protest the cost of new “Clean Fuel Standard“ rules designed to, um, drive the oil industry into the ground or out of the country, and facing the targeted wrath of reliably-belligerent Environment Minister Steven Guilbeault.
Irving sort of pretended it had nothing to do with policy decisions. You have to, given the arbitrary power governments possess to wreck your business if you annoy them. But as Martin Wightman of Brunswick News pointed out:
“Irving Oil has been lobbying hard in Ottawa for months, surely focused on the Clean Fuel Standard… a key piece of the climate change action plan devised by the federal Liberals, led by Environment Minister Steven Guilbeault. Irving Oil and Guilbeault are not getting along. The minister singled out Irving Oil in a letter urging energy regulators in Atlantic Canada not to let refiners get a price increase July 1, when Clean Fuel Standard rules start coming in. He suggested that refinery margins are fat and healthy, and the company should absorb the cost of compliance, rather than trying to pass it along to consumers.”
You don’t have to be a climate scientist to see the connection. Though if you’re a Canadian cabinet minister, you apparently can’t see the consequences.