Taxpayers are losing billions due to a lack of pipelines

Author: Franco Terrazzano 24/05/2019

OTTAWA, ON: The Canadian Taxpayers Federation is launching 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 increasing in real time. The CTF’s analysis shows the federal government lost $6.2 billion between 2013 and 2018 and that number is rising by $3.6 million per day.

“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 Franco Terrazzano, Alberta Director for the CTF. “That means Canadians have less money for everything from hospitals to teachers and taxpayers 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 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, reduced household incomes, foregone revenue to energy companies and other costs to the Canadian economy.

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:

  • A new hospital could be built in every province and territory (based on the cost of the new hospital in Yellowknife and another in Grand Prairie);
  • Nearly 25,000 new teaching positions could be fully funded for ten years;
  • All three Maritime provinces could be exempted from all federal taxes for a year.

“The Trudeau government is running up big deficits because it simply can’t pay for all its promises,” said Aaron Wudrick, CTF’s Federal Director. “You would think they would be aggressively supporting these projects, rather than drafting legislation that actually makes it harder for pipelines to get built.”

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