Lack of pipelines like Energy East costing taxpayers billions

Author: Paige MacPherson 2019/06/05

SAINT JOHN, NB: The Canadian Taxpayers Federation is on a cross-country tour showing 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.

“We’re here to show that in addition to the jobs lost in Saint John when the Energy East pipeline was cancelled, we’re losing billions in tax revenue and important services because we can’t get pipelines built,” said the CTF’s Atlantic Director, Paige MacPherson. “The construction of Energy East would have meant a stronger economy and an opportunity for lower taxes in Saint John.”

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 pipelines 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:

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. According to a presentation to Saint John council in 2016, TransCanada planned to hire 3,716 people locally for project construction and 97 people to operate it once it was completed. Saint John council has twice passed resolutions supporting Energy East and New Brunswick Premier Blaine Higgs has been an advocate of the project.

“We are losing out on hospitals and teachers while we’re paying higher taxes because we aren’t getting full value for our resources,” said the CTF’s Alberta Director, Franco Terrazzano. “From East to West, all Canadians are made better off when governments allow job creators to build pipelines.”

The Canadian Taxpayers Federation’s tour is visit 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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