by Eric Duhaime
If Quebecers are sincere and want to stop depending so much on the transfer payments coming from Canada’s richest provinces, they could just start doing what Alberta, Saskatchewan and Newfoundland — the three richest provinces in the country — are doing, and say yes to homemade oil.
Even if most governments in the western world seem obsessed with the idea of adopting cost-ineffective programs to promote so-called green energy sources, like it or not, oil remains the main and most viable resource. Over the past 20 years, our oil consumption has increased. Oil will still be the largest source of primary energy in the world for at least the next few decades. This will remain the case until renewable energies become less expensive.
In the meantime, somebody somewhere needs to extract, refine and sell “dirty” oil. It’s a matter of survival, not just for our cars and trucks, but also for heating, fertilizers, pesticides, synthetic fibres, plastics, solvents, paints, rubber, detergents, cosmetics, medicine, and so on.
The most prosperous provinces in Canada and the wealthiest American states are those exploiting their oil and natural gas resources.
Some other have-not provinces also have great oil potential but do not exploit it. Quebec is one example.
The Montreal Economic Institute (MEI) published a relevant study by Prof. Germain Belzile, entitled “The benefit of oil production development in Quebec.” According to several evaluations, there are more than 46 billion barrels of oil in two locations in Quebec: Anticosti Island and Old Harry.
The MEI conservatively estimates that at $100 a barrel, and assuming that just one-tenth of those reserves were recoverable, Quebec’s potential production worth would be more than $400 billion. And we are not even talking here about the other great unexploited natural resource reserves that Quebec has but refuses to exploit — shale gas.
What would happen if Jean Charest’s government gave a green light to oil development?
“Obviously, the Quebec government would receive royalties, but it would also receive tax revenue from the private income generated by higher growth. This would allow the government to reduce the tax burdens of households and businesses, and might even help it pay back a part of its public debt and escape from its dependence on transfers from the federal equalization program,” Belzile informs us.
For the tree-huggers, we can add that we would take greater care of the environment since we would not need to carry oil from the other end of Canada or, even worse, the Middle East.
Alberta’s average household income in 2009 was $71,600, compared to $50,600 in Quebec. La belle province will not become more “belle” or narrow this gap by depending more and more on its neighbour’s wallet and work.
Quebec’s economic problems have, in fact, nothing to do with the fiscal imbalance of federalism, as separatists claim, and everything to do with its energy and environmental policies.
Instead of screaming and begging for more money from Ottawa and Alberta, why don’t Quebecers roll up their sleeves and start digging for the wealth sitting underneath their feet? Drill, Quebec, drill!
Categories: Contributor Columns