Ontario’s Plan To Help Alberta Oil Companies

Ontario is launching a website to help lure oil and gas companies to the province. The Liberals intend to lure them by extolling all the pluses of building new roads that would become active oil and gas pipelines.

“The new transportation infrastructure plays a pivotal role in meeting the need for new transportation pipeline capacity,” says one Ontario “Fact Sheet” touting the benefits of a revived transcontinental pipeline system. “As new pipelines are brought online they help ease the supply pressure on the interstate pipelines, supporting our drivers and drivers around the world.”

The document continues, “Within Canada, we’re benefiting from the construction of these new pipelines. As these projects come online we are also seeing the flow of transit for oil and gas in Canada increasing and helping to offset Alberta’s current oil shortage.”

Think about that for a moment. The Liberal government of Ontario, which has presided over a 16-year slide into the slums of the OECD, is boasting that opening of new pathways for Alberta and Saskatchewan oil to flow westward and southward will ease the pressure and help alleviate the dramatic price collapse that has been the recent scourge of western Canada.

The document then conflates a supposedly “stressed market” with a transportation crunch. “Western Canada is booming right now,” declares the Liberals. “It’s the slowest and toughest parts of Canada.”

Budgets are strange places to make counter-intuitive financial policy decisions. The provincial Liberals already set up the toll roads that are being stacked around Toronto and that were constructed in the years before the country was rocked by a financial crisis that had the profound effect of sucking funds out of Alberta and causing financial stress on the rest of the country, including Ontario.

Ontario also launched a site to celebrate the replacement of every hydro transmission line in the province, including the new “transmission infrastructure” being built to bring Alberta oil to Ontario. “Facts,” states the Liberal site, and it sure sounds as if the Liberals believe that Ontario’s “stressed” Hydro sector, beleaguered by massive rate increases during its recent 11-year recession and with a population growth rate that has outpaced the rest of the country, is an inadequate source of transport for the oil being extracted from Alberta’s emerging oil sands.

“Transit is a major factor for adding even more new pipelines to Canada’s energy-intensive supply lines,” the Ontario document asserts. “Transit makes us competitive with other industrial countries, even amidst harsh economic climates, and we are making significant strides to improve our transit systems.”

The Liberals clearly hope their scheme, which begs the question of what Ontario would do with all that oil if it ever got it, will coax the oilpatch away from the prosperous energy-producing states of Wyoming and North Dakota and into Ontario.

About the only thing that didn’t make a believer out of the government infrastructure program was a website detailing the costs of building all the new roads and bridges that will then be converted into pipelines. How much will it cost to open up a new system of roads for oil and gas? Up to $3 billion a year.

Which $3 billion a year will the Liberals drain from Ontario’s slum economy and put to work finding new ways to get Alberta oil and gas to market? They haven’t offered an answer to that, even though opening up new transcontinental pipelines will expand the productivity of the western provinces, which have more than doubled as oil and gas production have done the same.

Ontario’s massive build-out of roads to sprawl will come as no surprise to people who understand what that budget does. Its builders are hoping that building the roads and bridges to pump and refine oil and gas will ease the pain caused by Canada’s major oil and gas producers. This is Ontario’s plan to help the oil patch rise from the dirt, and the Liberals know it.

Rob Longley is a Contributing Editor at RedState and a Senior Fellow at the Macdonald Laurier Institute.

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