With the gradual recovery of oil prices in the global market, petroleum is poised to become Canada’s next big economic asset that can stand side-by-side with the vibrant real estate market.
In a contribution piece for the Financial Post
, Macdonald-Laurier Institute managing director Brian Lee Crowley and Munk senior fellow Sean Speer said that Ottawa’s current deficits are an anomaly in the wake of the International Monetary Fund’s announcement that “the worst of the oil price crash is over.”
“[It follows that] Canada’s economy will therefore be one of the fastest-growing major economies. Yet Ottawa is still sticking with ongoing deficits,” the duo wrote.
The answer lies in getting more economic value out of Canadian energy.
“Getting the world price for Canadian oil exports would result in more jobs and money for Canadians without having to produce a single extra barrel. This can translate into more investment, higher government revenues, and a significant boost to the Canadian economy totalling as much as $50 million per day, according to one estimate from the Canadian Chamber of Commerce,” Crowley and Speer said.
However, this might prove easier said than done in the current system, the duo argued.
“The uptick in oil prices notwithstanding, Canada’s oil exports continue to sell at a steep discount to the world price — about 30 per cent less per barrel — because a lack of export pipelines has us almost entirely dependent on the U.S. market,” the analysts stated.
“Realizing this economic potential will require political leadership. It means ignoring shrill anti-development voices that oppose pipelines for all kinds of ludicrous and demonstrably false reasons. It means standing behind the independent regulatory process rather than succumbing to manipulative and emotional critiques. And it means accepting that not everyone can be persuaded, and that economic opportunity should not be passed up in a doomed search for consensus,” Crowley and Speer concluded.
“Real leaders would stand up for the industry and the real prosperity and jobs it creates.”
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