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Taxpayers losing billions due to lack of pipelines

May 28, 2019
Taxpayers losing billions due to lack of pipelines

MONTREAL, QC – The Canadian Taxpayers Federation is on a cross-country tour to show how much money taxpayers are losing because Canadian oil is sold for less than its full value due to a lack of pipeline capacity. The tour includes a large digital clock displaying losses going up in real time. The CTF’s analysis shows the federal government lost $6.2 billion between 2013 and 2018 and that number is going up by $3.6 million per day.

“Taxpayers are losing out on billions of dollars because we can’t get pipelines built and we aren’t receiving full value for our oil,” said Franco Terrazzano, Alberta Director for the CTF. “That means taxpayers have less money for everything from hospitals to teachers and are stuck with a higher tax bill.”

Canada isn’t getting full value for oil due to a lack of pipeline capacity to reach foreign customers. Based on data released by the Office of the Parliamentary Budget Officer, the CTF calculated how much additional revenue the federal government would receive if Canadian oil sales received full value compared to the American price.

The lack of pipeline capacity cost the federal government:

  • $6.2 billion between 2013 and 2018; and,
  • Another $3.6 million per day (based on projected loses of $6.6 billion between 2019 and 2023).

Here are a few examples of the potential benefits for taxpayers if increased pipeline capacity captured full value for Canadian oil from 2013 to 2023:

“When our energy industry loses, all of our governments lose money, and nowhere has this been shown better than right here in Montréal-Est,” said Renaud Brossard, Quebec Director for the CTF. “Montréal-Est used to have six refineries operating on its territory and contributing to its municipal coffers. That number is down to just one today, and it’s up to everyday taxpayers to make up the difference.

“Instead of losing out on a lot of money, we can all be winners by encouraging development.”

The Canadian Taxpayers Federation’s tour is visiting every province to show how much money taxpayers are losing because governments haven’t encouraged pipeline construction. You can find the analysis here.

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