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Canada Lacks A Successful Energy Strategy

Canada Lacks A Successful Energy Strategy

oil refinery

“Canada has no energy plan beyond pedal-to-the-metal export of its non-renewable energy assets.”

That’s the bottom line of a recent opinion piece in Calgary Herald by David Hughes, an earth scientist and research associate with the Canadian Centre for Policy Alternatives.

Canada needs a long-term energy plan to wean itself from fossil fuels and move to renewable energy, Hughes writes.

While Canada will continue to rely on oil and gas in the foreseeable future, the country is currently exporting its oil at rock bottom prices, and continues to push for a pipeline—the Trans Mountain Pipeline Expansion—to export it to Asian markets. However, Canadian oil won’t fetch much higher prices in the world’s fastest-growing oil market Asia, as the federal government and Alberta province hope, Hughes argues.

The costs for sending Alberta’s heavy oil to the U.S. Gulf Coast are lower than the transportation costs to sell said oil to Asia via an expanded Trans Mountain pipeline and then oil tankers. Alberta’s oil can sell in the United States for $2-$5 per barrel more than it would sell in Asia, according to Hughes.

Two pipelines to the United States with double the capacity of Trans Mountain are currently under development. These two new pipelines would ease pipeline takeaway constraints before 2022, the earliest possible completion date for the Trans Mountain expansion, if it goes ahead, Hughes says.

Therefore, the current push to save the Trans Mountain Expansion Project and sell off the Alberta oil as fast as possible “makes little sense,” he wrote. e

…click on the above link to read the rest of the article…

How Solid are Canada’s Big Banks?

How Solid are Canada’s Big Banks? - Peter Diekmeyer

The World Economic Forum consistently ranks Canada’s banks among the world’s safest. Competent regulators have overseen stress tests, tightened lending standards and delinquency rates are low. Demographics are good and the country’s diversified economy is backed by a treasure of oil, wood, gold and other natural resources.

So the experts say.

Institutional investors, relying on the work of Jeremy Rudin, Canada’s chief bank regulator, agree. In fact, Canadian financials accounted for 35.5% of the market capitalization of the benchmark exchange (NBF February).

However this façade hides major uncertainties. Key concerns stand out, which if unaddressed, could spark solvency and liquidity issues in one or more of Canada’s Big Six banks.

The fragilities can be seen in an IMF report, which calculated that Canada’s financial sector accounted for a stunning 500% of GDP in 2012. Today, the assets of the Big Six banks alone are more than double the size of the country’s economy.

Each (RBC, CIBC, Scotiabank, BMO, TD and National Bank) have been designated “systemically important,” which in turn, due to sheer size and interconnectedness, suggests that they are almost certainly “too big to fail.” That means the collapse of any one Big Bank would threaten to trigger systemic implosion.

More ominously, if Canada’s financial system, arguably the world’s best, is riddled with pores, what does that say about the US, the UK, and Japan? Let alone Italy and Spain?

Yet signs of fragility are everywhere. Consider:

Complacency following “secret” $114 billion bailout

A quick review of key metrics suggests Canada’s banking sector, which, on the surface, having largely escaped the 2008 financial crisis, has thus learned little from it.

As David Macdonald demonstrated in a paper for the Canadian Center for Policy Alternatives, Canada’s Big Banks benefited from nearly $114 billion in cash, liquidity, and other bailout help from both local and US sources following the financial crisis.

…click on the above link to read the rest of the article…

Four More Whoppers about LNG in British Columbia

Four More Whoppers about LNG in British Columbia

The real facts behind Christy Clark’s rosy claims.

ChristyClarkLNGInBC_610px.jpg

BC Premier Christy Clark: a million-dollar website to drum up LNG jobs, but not a single job yet.

The B.C. budget claims the province is making money from shale gas. But last month The Tyee showed the province is pouring more cash into the industry than it is getting back.

In fact the only time the B.C. government made any money from shale gas was during a land lease boom nearly a dozen years ago. Ever since then, revenues have dwindled to next to nothing due to low royalties and taxpayer-funded subsidies to the ailing shale gas industry.

Dig deeper, and four more claims made by the B.C. government turn out to be liquefied natural gas whoppers as well.

New information on employment numbers, shale gas reserves, transmission lines and the LNG promise of economic prosperity show that stretching the truth remains a persistent trend in the Christy Clark administration.

Whopper #1: Vastly less gas to sell than claimed

Let’s begin with the government claim that British Columbia “has more than an estimated 2,900 trillion cubic feet (tcf) of marketable shale gas reserves,” or more methane in the ground than the entire United States.

Hughes pointed out in a report for the Canadian Centre for Policy Alternatives that the BC Oil and Gas Commission estimated that B.C. only had 376 tcf of marketable shale resources. (Hughes added 40 tcf to this number for good measure, for a total of 416 tcf, to account for possible resources in developing plays.)

…click on the above link to read the rest of the article…

Forget the Praise: BC’s Carbon Tax Is a Failure

Forget the Praise: BC’s Carbon Tax Is a Failure

Higher emissions, slow growth, regressive taxation. Sorry, what’s to celebrate?

Premier Clark at GLOBE 2016

‘We think in British Columbia a carbon tax is a really successful way to go,’ BC’s premier said last year. The only problem is it doesn’t work. Photo of Premier Clark at GLOBE 2016 by Mychaylo Prystupa.

“Let’s cut the crap about B.C.’s carbon tax. The impact of the carbon tax has been overstated by people who love carbon taxes, and it’s annoying that the tax has generated so much uncritical praise.” — Marc Lee, pro-carbon tax economist.

To hear it from Premier Christy Clark, our province is a beacon of trailblazing perfection in the battle against climate change.

And the crowning glory of B.C.’s efforts is the carbon tax introduced in 2008. The tax now adds 6.67 cents a litre to the price of gasoline and imposes costs on other fuels for residents and industries.

“We think in British Columbia a carbon tax is a really successful way to go,” Clark said in November 2015 before jetting to the Paris climate change talks.

Cue the applause, from the New York Times to the Organization for Economic Co-operation and Development to new group Smart Prosperity that launched last week in Vancouver, with none other than Prime Minister Justin Trudeau to validate Clark’s claims that you can price carbon and reduce greenhouse gas emissions — without hurting your economy.

The only problem is that B.C.’s carbon tax doesn’t work.

Marc Lee, senior economist for the Canadian Centre for Policy Alternatives in the province, likes carbon taxes. But “don’t believe the hype on B.C.’s carbon tax,” he says.

“The reality is that since 2010, B.C.’s GHG emissions have increased every year; as of 2013 they are up 4.3 per cent above 2010 levels,” Lee writes on the CCPA website.

Even on a per capita basis, emissions have risen.

…click on the above link to read the rest of the article…

Federal Surplus Comes with Social Costs, Critics Say

Federal Surplus Comes with Social Costs, Critics Say

Number of government departments ‘lapsing’ budgets up from 10 years ago: CCPA.

If Canadians want to see how the federal government managed to reach a surplus for the 2014-15 fiscal year, they should think of veterans struggling with post-traumatic stress disorder and other wounds, said veterans’ advocate Tom Beaver.

The Conservative government ran a surprise $1.9-billion budget surplus last year, its first since 2008. The surplus has been attributed in part to government “lapses” in spending, in which departments do not spend their full allotted budgets for the year.

Veterans like Beaver have complained a $1.1-billion lapse in spending over several years at Veterans Affairs could have been used to keep department bureaus open across the country, or to help vets who were wounded in the line of duty.

The government has also changed its lifetime pension payments for wounded soldiers to lump-sum payouts, and that has resulted in a court battle.

Beaver said news of the surplus feels like a slap in the face, and the government shouldn’t lapse spending in needed departments. “The [Conservatives] could have had more money if they didn’t spend thousands fighting veterans in the courts,” he said sarcastically.

Beaver said he knows the money didn’t only come from veterans, but from Canadians in general.

On Monday, the Ottawa Citizen reported the government underspent by $8.7 billion in total across government departments last year.

Lapses increased since 2008: CCPA

David Macdonald, senior economist at the Canadian Centre for Policy Alternatives, said there’s nothing new about spending lapses, but their frequency has increased since the 2008 financial crisis and ensuing stimulus.

 

…click on the above link to read the rest of the article…

 

 

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