Costs matter, especially in economics.
I have heard the pitch for developing Yukon’s oil and gas sector, from the Yukon Party government, from the Opportunities North conference, and more recently in this very paper, from Keith Halliday.
It’s wrapped up as an economics argument, but cost analysis is mostly absent.
Oil and gas subsidization (for Halliday, that’s economic jargon for when the government uses the public purse to give a financial benefit to a specific industry) is huge in Canada at roughly $3 billion a year. Whether the financial benefit is a direct cash handout, or an indirect tax break, the effect is public money for industry. That $3 billion could pay for a lot of other things besides fossil fuels.
Even the World Trade Organization thinks the oil and gas sector is over-subsidized. The Trudeau government made a platform promise to phase out subsidies for the fossil fuel industry. But in its latest budget, the government locked in some fossil fuel subsidies for another 10 years.
To have a fact-based economic discussion about oil and gas, we need realistic estimates of costs, including what should be subsidized by the public purse, and factoring in externalities like the climate and water. With realistic costs, the benefits can be measured more accurately. Further, costs and benefits would allow for an options analysis. With energy, that means comparing fossil fuels with a suite of renewables over a timeline.
Halliday is not contributing to a fully informed discussion about Yukon’s energy future. One-sided pictures have their purposes, such as promoting or lobbying.
But let’s not call that economics. It’s more like a really long-winded bumper sticker.
Tory Russell,
Whitehorse