Newfoundlanders and Labradorians among taxpayers losing billions and services due to lack of pipelines

Author: Paige MacPherson 07/06/2019

ST. JOHN'S, NL: The Canadian Taxpayers Federation’s cross-country tour is stopping in St. John’s today 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 features 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.

“The money Ottawa is losing by roadblocking pipeline projects matters for Newfoundland and Labrador because it could pay for important services here in the province,” said the CTF’s Atlantic Director, Paige MacPherson. “With a troubling debt load and high tax burden, Ottawa shouldn’t get in the way of better services and less taxes in the province.”  

Revenues from Ottawa make up 37 per cent of Newfoundland and Labrador’s total 2019-20 budget.

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).

These figures only account for direct losses to the federal government and don’t include the cost of lost job opportunities, smaller household incomes, foregone revenue to energy companies and other costs to the Canadian economy due to a lack of pipelines.

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:

  • Sixteen hospitals could be built based on the costs of the Corner Brook hospital redevelopment;

  • Over 24,000 new teaching positions in Newfoundland and Labrador could be fully funded for 10 years;

  • Pay off 93 per cent of the government of Newfoundland and Labrador’s debt;

  • All residents of Newfoundland and Labrador could be exempt from federal taxes for more than two and a half years.

“Canadian 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 the CTF’s Alberta Director, Franco Terrazzano. “That means Canadians have less money for everything from hospitals to teachers and taxpayers are stuck with a higher tax bill.”

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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