A study written for Canadian Centre for Policy Alternatives by earth scientist J. David Hughes offered a conclusion on the success of neoliberal politics in Canada. Success, that is, for the corporate world.
A pull quote in the executive summary of the Hughes report provides the gist:
Canada’s remaining non-renewable energy resources are being sold off in an environment of low prices with minimal and declining returns to governments.
Hughes’ statement is particularly true in British Columbia. Production of natural gas has steadily increased.
But provincial revenues from natural gas royalties have steadily declined.
Royalties are one element of natural gas revenues. A second involves receipts from rights offerings. Yet, that is disappearing too. In the last four fiscal years, sale of rights brought in an average of $60 million a year. That amount is 3% of the amounts realized in 2009.
In addition, gas producers have accrued unrecorded credits of about $3 billion that may be used to reduce future royalty payments.
Provincial governments of western Canada committed to maintaining natural resources taxes at “competitive” levels. If one province offers a tax reduction or cash incentive to fossil fuel producers, that policy ensures the others will do the same.
If one province absorbs cleanup costs when fossil fuel producers abandon oil and gas wells, the others do the same.
The result is a race to the bottom. If the trend continues, people of British Columbia will be paying gas producers to remove natural gas and ship most of it out of province.
Meanwhile, those of us using this fuel in our homes are seeing significant increases in heating costs in 2019.
That is how neoliberal economies work.
Categories: Natural Gas