Quebecers risk suffering the repercussions of the cancellation of the Keystone XL pipeline, because the oil provinces in crisis could well eat away at federal transfers until now reserved for the less well-off.
• Read also: Impacts in Bécancour due to the abandonment of Keystone XL
• Read also: Legault energized by the arrival of Biden
• Read also: Joe Biden in power: the energy sector sees only good
On his first day in office on Wednesday, US President Joe Biden revoked the license to construct the Keystone XL pipeline that was to transport Alberta oil to Texas.
The project developer, TC Energy, plans to eliminate more than a thousand jobs related to the construction of the pipeline.
“It is a blow to the economy of Canada,” reacted the premier of Alberta, Jason Kenney.
“If you want our province to be able to continue contributing to this country, we need this type of infrastructure to be built,” he said, calling on Ottawa to fight for oil workers as well as for those in the world. ‘steel.
The Fraser Institute warns that the economic crisis hitting the oil provinces is about to have repercussions on the public finances of other provinces, in particular on the less wealthy, such as Quebec.
“There are also implications for the budgets of the less well-off provinces because of the rules of the equalization program,” said the think tank in an analysis published last month.
Quebec is by far the largest beneficiary of this federal program. Of the $ 20.9 billion in equalization that Ottawa will pay out this spring, $ 13.1 billion will go to la belle province.
For the moment, the oil provinces are excluded from the equalization program because their inhabitants are richer overall and are therefore able to pay more taxes to finance their own services. In other words, they have a higher fiscal capacity than the national average.
No more mouths to feed
But the Fraser Institute points out that the fiscal capacity of Newfoundland and Labrador, Saskatchewan and Alberta is in free fall. So they could soon be eligible for equalization for the first time.
However, the arrival of new guests around the table will force Ottawa to divide the cake into more pieces. The usual beneficiaries will therefore see their portion reduced to feed the new ones.
“If the West cannot produce oil, let alone sell it on the market, there will simply be no profit to share, with Quebec or with anyone,” summarizes Lynn Exner, the door. word of the group Canada Action, a lobby group in the energy sector.
Tax expert Trevor Tombe of the University of Calgary points out that the overall amount earmarked for equalization is not affected by the oil crisis since it is a program entirely funded by the federal government.
On the other hand, because of their high wages, workers in this industry pay more taxes than the average. If they send less money to Ottawa’s coffers, the federal government will have to take on more debt to keep transfers at current levels, says Tombe.
WHAT IS EQUALIZATION?
- Equalization is a transfer of federal money to the less wealthy provinces. The objective of this program is to balance the wealth between the provinces to ensure that all Canadians have access to the same services, whether their province of residence is rich or not.
Emergency transition requested
It is not the announced cancellation of Keystone XL that is hurting jobs and prosperity in the west, but the lack of vision of decision-makers who are betting on a declining industry, says Green Party leader Annamie Paul .
“If we have the future of workers in Alberta at heart, we need a green recovery with paying and stable jobs that have a future,” she said, stressing that her brother himself lost his job. in the petroleum industry.
Villages in agony
But in the meantime, in the prairies of Alberta and Saskatchewan, the villages are dying. The mayor of Consort, a community of 729 souls 350 kilometers from Calgary, knows all about it.
Located on the Keystone XL route, Consort saw this site as a beacon of hope. The municipality was to welcome 200 to 400 workers dedicated to the construction of the pipeline in the spring.
“It would have definitely helped our local businesses. Particularly after COVID has forced many closures, ”Mayor Michael Beier told the Newspaper.
Mr Beier adds that in return for his welcome, the project’s promoter, TC Énergie, would have invested in Consort’s aging infrastructure, in addition to supporting recreational facilities and emergency services.
In the medium term, the oil crisis threatens the jobs of half of the residents of the village.
To ensure a livelihood for these workers, Canada must offer the Biden administration what it wants as quickly as possible: clean energy, argues Clean Energy Canada, a think tank dedicated to the energy transition to the Simon Fraser University in British Columbia.
“The good news is that Canada has an abundance of clean energy to sell to its neighbors, which we are already doing with California and New England,” said Merran Smith, director of Clean Energy Canada.
As the leading supplier of clean energy in North America, Quebec is well placed to both lead by example and to export its know-how elsewhere in the country.