Election Issue: Oil Sands

Today we're talking oil sands, dear readers,

I'm going to focus on what has been announced in terms of the oil sands. The post isn't intended to argue the environmental pros and cons of the oil sands, just the pros and cons of the party platforms on the controversial industry. 

Again, if there's a subject you think I should cover, let me know and I'll be more than happy to make a post on it. And please, if you're enjoying these posts, consider passing the link on to your friends and family, by whatever means of social media or traditional media/means you prefer.

Conservative Party of Canada

The Conservatives have committed to reducing the tax benefit available to the oil and gas industry, including phasing out the Accelerated 
Capital Cost Allowance by 2015. Budget 2011 also called to reduce the deduction rates for intangible capital expenses in oil sands projects to align them with the rates applicable in the conventional oil and gas sector. The Conservative Party has said that Budget 2011 would eliminate two tax subsidies it currently provides to the oil sands industry. In general, the Conservative Party is supportive of the oil sands industry and further development of the resource.

Pros: According to the budget document, the changes to deduction rates could increase federal reserves by about $15 million in 2011-2012 and $30 million in 2012-2013.

Cons: The Conservative plan alienates Alberta, even though Albertans don't realize it (or just don't want to admit it to themselves). Concerns of Western Alienation tend to ignore times that Conservatives take part in the conspiracy. The plan would close a tax-loophole that is used heavily by the oil and gas industry, apparently giving Ottawa an extra $580 million to use on the eastern provinces. Even Premier Stelmach expressed concerns with Budget 2011 and the effect it would have on the oil and gas industry. Yet he supports it. Albertans should be careful putting all their trust in the Conservatives. To be fair, whatever happens, because Alberta is much better off than other provincial counterparts in the east, and has a smaller population, any elected government will spend more on Eastern Canada than Western Canada.

Liberal Party of Canada

The Liberal Party Platform, released this past weekend, proposes to cancel the Accelerated Capital Cost Allowance (ACCA) immediately, and use the funds gained to invest in cleaner development. This cancellation would occur about 3-4 years prior to the Conservative plan to phase out the
allowance. The Liberals have promised to invest in cleaner technologies intended to help make the oil sands more environmentally sustainable including eliminating the 15% environmental impact differential compared to conventional sources of oil. Finally, the Liberals intend to "increase the rigour with which the federal government exercises its regulatory responsibilities relevant to oil sands development." It's a general promise with no realy substantive "how" provisions. In general, the Liberal Party of Canada is supportive of the oil sands and further sustainable development of the resource.

Pros: The party expects a $500 million revenue from canceling the ACCA immediately, rather than phasing it out over four years. These funds would go towards creating a more "environmentally friendly" oil sands through clean technologies and sustainable development. The Liberal plan would invest in the oil sands rather than in other industries.

Cons: To be honest, the cons of the Liberal plan are about the same as the Conservative Party's plan. Eliminating the ACCA under the Liberals would have up front consequences rather than in 3-4 years. To be fair, immediately cutting the allowance could cause problems for projects that had planned on taking advantage of it in the near future. Like I mentioned above, every federal government will spend more on Eastern Canada than Western Canada due to the nature of our federation.

New Democratic Party

When Jack Layton was in Quebec last week, he came down hard on the oil sands. He said he would cancel all fossil fuel subsidies (of which there are plenty in the oil sands) and would increase investment in clean energy technology. Mr. Layton, using a study released by the International Institute for Sustainable Development, said that Canada provides about $2 billion in subsides to the fossil fuel industry. Of the three major parties, 
the NDP is the only one to use the term "tar sands" to describe the Alberta industry. In 2008, NDP candidate Michael Byers called for a complete shut down of the industry, and the only non-Conservative Albertan Member of Parliament, Linda Duncan, released a report this past September calling for a serious review of the environmental impacts of the oil sands. She also suggested that no new development should take place until the review was completed. The NDP are not generally supportive of the oil sands and oil sands development.

Pros: Without fossil fuel subsidies, oil production would likely decrease, reducing carbon emissions and slowing production of a non-renewable resource.

Cons: Without fossil fuel subsidies, oil production would likely decrease, reducing economic growth and productivity that drive much of Alberta and Canada's economic development. One in 15 jobs in Alberta are energy related and 23% of oil sands related employment is from out of province. I won't go into the GDP benefits of the oil sands, but the NDP stance on the oil sands could be dangerous to Alberta and to Canada.

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