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New Brunswickers among taxpayers losing billions due to lack of pipeline progress

May 31, 2019
New Brunswickers among taxpayers losing billions due to lack of pipeline progress

This column was published in the New Brunswick Telegraph-Journal on May 31, 2019.

By: Paige MacPherson and Franco Terrazzano

New Brunswickers lose job opportunities when pipeline projects get shelved. But here’s a wider reality: all Canadians are losing out on billions of tax dollars because governments are getting in the way of pipeline development.

The Canadian Taxpayers Federation calculated how much extra revenue the federal government would collect if a lack of pipelines didn’t reduce the Canadian price of oil compared to the U.S. price, based on data released by the Office of the Parliamentary Budget Officer.

Canadian taxpayers lost $6.2 billion between 2013 and 2018 and can expect to lose another $3.6 million every day by the end 2023 if governments continue to get in the way of pipelines.

That lost revenue could be used to fund services, while also providing the opportunity to reduce taxes. About 35 per cent of New Brunswick’s operating budget is projected to come from transfers from Ottawa this year, so the money that Ottawa is throwing down the drain by roadblocking pipeline projects matters.

To put the billions into perspective, Halifax is currently building a major new hospital for $2 billion. In 2017, the New Brunswick government allocated $100.5 million to expand the Georges Dumont hospital, while Saint John Regional Hospital had $90 million allocated for upgrades.

The lost revenue since 2013 could have built at least three major hospitals, or expanded and upgraded more than 60 existing hospitals across Canada. It could likewise have funded 20,000 teaching positions across the country.

Or, the revenue could have been used to reduce taxes. Consider that the money lost from 2013 to 2018 was about equal to federal taxes collected from New Brunswick and P.E.I. residents for a full year.

Ottawa is leaving tons of cash on the table by either getting in the way of pipelines such as Energy East, or not acting when provincial governments threw major roadblocks in the way.

And these lost revenue numbers only account for direct losses to Ottawa. They don’t include the significant amounts of tax revenue that would have been generated for the provincial and municipal governments by having a project such as Energy East in Saint John.

The revenue numbers also don’t capture economic losses such as lost job opportunities, smaller household incomes, forgone revenue to energy companies and other costs to the provincial and national economies due to a lack of pipeline progress.

TransCanada Corp. said Energy East would have pumped $297 million into Saint John’s economy during construction. It would have added $5 million in annual property tax revenue for Saint John once completed, according to Mayor Don Darling. TransCanada told Saint John council in 2016 that it planned to hire 3,716 people locally for project construction, and 97 people to operate it on an ongoing basis.

It’s time for Ottawa to get on board or get out of the way – and stop throwing out billions of dollars that could be used to lower taxes and provide better services across the country.  

Paige MacPherson is Atlantic Director and Franco Terrazzano is Alberta Director of the Canadian Taxpayers Federation. The CTF is on a cross-country tour showing in real-time how much money Canadians are losing because Canadian oil isn’t sold at its full value due to a lack of pipeline capacity. Premier Higgs spoke at the CTF’s event in Fredericton on May 29, 2019.

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