By David Marsden
There’s a much-expected sigh of relief now that the federal government has given expansion of the Trans Mountain pipeline its approval for the second time.
The green light should never have been in doubt, but the project is fraught with political calculations for the Liberals, who risk losing as many votes as they stand to gain by making a common-sense decision.
In a wily sop to those who resist essential infrastructure, Prime Minister Justin Trudeau has promised that every dollar the federal government earns from the project will be put toward renewable energy initiatives.
“It is estimated that additional corporate income tax revenues from the project alone could generate $500 million per year once the project has been completed,” the government said Tuesday.
“This money, as well as any profit from the sale of the pipeline, will be invested in clean energy projects that will power our homes, businesses and communities for generations to come.”
The decision to funnel pipeline profits toward green energy projects is aimed at muting opposition. It’s apparent that some people who oppose the pipeline will never be persuaded of the project’s merits, however.
Even a vow to use pipeline proceeds to finance strides toward a cleaner economy aren’t likely to find favour among rabid protesters, many of whom enjoy a good income themselves through their agitation.
The government’s statement is proof of the pipeline’s importance to Canada’s well-being. Half a billion dollars a year in additional corporate tax payments is a considerable sum, and it is just part of the revenue that will flow to individuals, companies and governments across the country.
There are some people who have insisted there is no economic argument in support of the pipeline’s expansion. Clearly, such misinformation, deliberately spread in a campaign to shake support for this important project, can be dismissed, along with much of whatever else they say.
It’s estimated the expanded pipeline will provide oil producers with $73.5 billion in increased revenues over 20 years. Federal and provincial governments will enjoy $46.7 billion in additional taxes and royalties from pipeline construction and just 20 years of operation.
If directing pipeline proceeds toward renewable energy projects is needed to secure support for the expansion, so be it. Let’s just hope the expenditures are true investments that reap tangible rewards, rather than costly green gestures void of real benefit.
Governments have a terrible track record when it comes to identifying ventures that can turn a profit. The only reason the Liberals find themselves in the position of distributing profits from the pipeline is because they made conditions so untenable, the owner threatened to walk away in disgust. That left the Trudeau Liberals with no choice but to buy the pipeline.
If the federal government is committed to using Trans Mountain to fund a cleaner economy, most of the money must be injected in Alberta. It’s the province that has contributed more than its fair share to the rest of the country for decades because of its energy wealth and the vagaries of Confederation, such as equalization payments.
Any policies aimed at a forced transition to renewable sources of energy should put Alberta first.
David Marsden is managing editor of the Red Deer Advocate.