Is Carney’s ‘grand bargain’ anything more than an empty gesture?

The Pathways Alliance project illustrates the scale of the challenge. Estimates run into the tens of billions, and that’s before factoring in operating costs. Private investors can’t justify the lack of financial return, so governments will have to step in with tax credits and subsidies, effectively socializing the cost of a policy-driven experiment. Ironically, the same environmental activists who demand aggressive decarbonization decry these subsidies as corporate welfare. Carney would have you believe that global customers are clamouring for this de-carbonized oil, but given that no such thing exists and no other major oil-exporting nation is attempting to invent it, we are really talking about a self-imposed export tariff that will apply uniquely to Canadian-produced petroleum and reduce our competitiveness. In any event, we know from watching Russian oil exports circumvent all the sanctions layered on them in the wake of the invasion of Ukraine, that world petroleum markets are pretty indifferent as to the provenance of the energy they trade. Carney’s list of finicky customers must be very select indeed. Time will tell whether the MOU represents a legitimate roadmap to a future in which Canada can export more of its resources to customers other than the United States, or a fundamentally unachievable prescription that is destined for failure. There are plenty of pundits on both sides of the argument weighing in, but hopes are high in the Calgary business community, which did not encounter very many reasons for optimism during the dark years of Trudeau’s lost decade. To give credit where it is due, it is very encouraging that the MOU squarely addresses some of the most egregious “bad laws” that have thwarted Alberta’s ambition and encouraged Alberta separatists, in particular, the emissions cap and the clean electricity regulations. The fact that Carney received TWO standing ovations from a Calgary business audience demonstrates just how starved for any sort of positive attention they truly were. This would have been unthinkable not long ago. Carney also expended significant political capital with this agreement; a gutsy move given how far Left the Liberal party has drifted, and how weak their electoral prospects are in Alberta (perhaps now improved, it must be said). The quickest and most efficient way for Canada to improve its productivity is through resource extraction, and oil is our largest export product by far. Unlike his predecessor, Carney seems to understand that you need to grow an economy if you want to have anything to redistribute. Unfortunately, too many of our fellow citizens, or at least a very vocal minority, don’t understand that. Consequently, we settle for grand bargains where very much extra capital must be spent, for no incremental benefit. No other country that found itself in the fortunate position of holding the world’s third-largest petroleum reserves would go to such lengths to handicap its own advantage. If we truly want growth, we need to build—not necessarily at “speeds not seen in generations,” but at all. The MOU might be a start, or it might be another grand gesture in a long line of missed opportunities.