Teck Frontier decided to pull the plug. Whether it was economically viable or not, it is clear the federal government was either going to kill it or if approved would be blockaded like current blockades and never get done. As such they made the wise economic decision which is no surprise. This would have brought in $70 billion in government revenue over the next decade. All countries have comparative advantages and as much as some wish it was not the case, resource industry is one of those and stifling it will make us poorer meaning fewer jobs and less government revenue. Governments don’t create industries, markets do and areas tend to specialize in different industries yet many in our current government do not understand this. Wanting to deal with climate change is laudable but it has to be practical and they already committed to net zero by 2050, had support of all 14 First Nation’s territory whose land it was on. I fear that if any more get cancelled, this will lead to a national unity crisis. We need a PM who champions industries in all provinces and instead of giving people handouts, lets each region reach its full potential.
With all the blockades and this, I can say as an investor, I would not want to invest in Canada, it would be one of the last countries I would and believe me, I am not the only one who feels this way. Declining investor confidence will eventually come to bite us. Only thing keeping our economy afloat is expanding public sector and cheap credit so high rates of consumption as consumers are borrowing more due to low interest rates. GDP is Consumption + Investment + Government + Net exports. Consumption is up thanks to low interest rates but risk of a credit bubble, investment is down, while government is up, and net exports only benefitting due to depreciating dollar thus making exports cheaper. And with risk of coronavirus, a slow down could be even worse.
The other big news is Alberta court of appeal ruled in favour of Alberta government that the carbon tax was unconstitutional. This means it will almost certainly go to the Supreme court and with a split decision 4-1 in favour of federal government in Ontario, 3-2 in favour in Saskatchewan and 4-1 against in Alberta it will be interesting to see which way the Supreme court of Canada goes. In the mean time, Trudeau has two options here: 1. Meet with provinces and through negotiation find a way to reduce GHGs but grant flexibility and focus on measurable targets not methods. 2. Implement a carbon tax at the federal level. Since BC and some others have one, he could always make in those provinces the carbon tax, tax deductible.
afiscalconservativepointofview 