Some good words of advice from Frank McKenna.
This differential is creating a staggering transfer of wealth from Canada to the United States of America. Indeed, the Canadian Energy Research Institute reveals that Canada could forgo more than $630-billion in additional GDP over the next 25 years. Approximately $230-billion of that amount would have accrued to Canadian taxpayers through royalties, corporate taxes and taxes on dividends.
As a livestock producer, I live with this reality every time I market my animals. If one market is over-supplied (say Manitoba), it pays me well to ship to another (say Ontario).
In terms of oil exports, it appears to me that a comparable dynamic is at play. Markets only function when there is effective competition and price discovery. When there is only one “market” for the product, that system starts to break down.
For the good of producers, provinces and all tax payers, Canada needs to take steps to diversify our ability to move oil and gas to several markets. Perhaps those markets lie in the Pacific, perhaps they are in eastern Canada or they may even be more refining capacity within Canada. However, we have to arrest this current situation where Canada is getting the short end of the stick when it comes to prices on exports.
Moving away from a dependence on a single market should be a national priority and the federal government should make exceptional efforts to expedite the construction of new pipeline routes.
