Prime Minister Stephen Harper and Canada’s ruling federal Conservatives went all in on fossil fuels and now that the price of oil has plummeted they are feeling the heat from the economic fallout.
Canada offers an energy policy case study. Rather than best practices, this is a cautionary tale of energy mismanagement on a national scale. Not only are fossil fuels the primary contributors to climate change, they are also increasingly less profitable.The combination of low oil prices and an impending low carbon regulatory regime make fossil fuels a very risky and volatile resource in 2015 and beyond. This is especially true of Alberta’s vast tar sands reserves which are some of the most dirty and expensive fossil fuels on the planet.
Some are waiting for oil prices to go up again, however many of those in the know are suggesting that prices will not rebound anytime soon. The IEA predicts that it will be at least ten years before we see oil prices return above $100 per barrel.
While some are biding their time waiting for higher oil prices, Alberta is falling into recession. If oil prices stay as low as they are now, Canada’s wealthiest province will be running a deficit for the foreseeable future. In short order Alberta went from a budget surplus to a $500 million deficit and a $12 billion debt. Unless oil prices miraculously rebound, losses of more than $10 billion are predicted in the province for the following three or four years.
In addition to the layoffs in and around the fossil fuel industry, the government of Alberta is already beginning to cut jobs and services. This suggests that austerity measures are not only for those nations that spend beyond their means, it is also for nations that bet heavily on fossil fuels. Alberta’s provincial government is even talking about raising taxes which amounts to heresy for conservatives in wild rose country.
The rest of Canada will not be immune to the pain of the oil price collapse. Economic hard times will ripple right across the country, so even those far removed from Canada’s oil epicenter will feel the pinch. Deficits are the order of the day from coast to coast thanks to Harper’s irresponsible energy policy.
Canada is mired in an old energy economy and as such the nation is poorly positioned to compete in the new world of opportunities that are taking shape.
Rather than invest in
renewables and lay the foundation for the future, Harper doubled down on
fossil fuels and tried to squeeze every petro-buck he could out of his
climate killing cash cow. Canada’s chief cowboy has made a colossal mistake by putting all of the
country’s energy eggs into the petro-basket.
Now that chicken is coming home to roost and Canadians will suffer the consequences for decades to come.