CTF Commentary: Taxpayers are losing billions due to a lack of pipelines

Franco Terrazzano, Alberta Director for the Canadian Taxpayers Federation. — Photo courtesy Canadian Taxpayers Federation

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.

“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 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.

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:

• At least six hospitals based on the costs of Metro Vancouver’s St. Paul’s hospital;
• Nine Pattullo Bridge replacements in Metro Vancouver;
• More than 270 new elementary schools in B.C.;
• Over 26,000 new teachers in B.C. could be fully funded for 10 years;
• All residents of Abbotsford-Mission would be exempt from federal taxes for eight years.

In 2017, B.C.’s NDP-Green coalition government  committed to using “every tool available to the new government to stop the expansion of the Kinder Morgan pipeline.”

“When the B.C. government blocks pipelines, the only people who benefit are oil exporters in Russia and Saudi Arabia,” said Kris Sims, B.C. Director for the CTF. “Pipelines could be paying for schools, hospitals and bridges while lightening the tax burden on Canadian families.”

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.