Canada has an urgent fiscal problem our government seems determined to worsen by continuing to wage its increasingly lonely battle against climate change.
In the 78 years from Confederation to the end of the Second World War federal debt reached $258 billion, adjusted for inflation.
During the past 10 weeks the federal government has effectively pledged to match that this fiscal year, with more coming.
According to a C.D. Howe study, “Ottawa’s net debt is headed for the previously inconceivable level of $1 trillion,” which is $105,000 for a family of four.
That crushing burden means years of higher taxes, reduced social spending, and less help for the provinces, which are on the front lines of our health-care system.
Now is the time to focus like a laser on growth and fiscal prudence and to avoid like the plague (pun intended) costly gestures that will retard recovery and achieve nothing substantive for the environment.
What we should not do is widen an already yawning gap between Canada’s costly and uncompetitive climate policies and those of the rest of the world.
We have much more to lose than countries not blessed with our vast proven oil and gas resources.
Moreover, at 1.6 percent of global GHG emissions, we can have no measurable impact on global temperatures, no matter how heroically we pursue a green transition.
And yet Finance Minister Bill Morneau has said his 2020 budget will focus on the environment, while the feds recently raised the carbon tax by 50 percent.
Every year from now until 2040 Canada could eliminate 1,500 megatons of carbon dioxide equivalent emissions by substituting natural gas for coal in Asian power plants.
Over the 20 years, that is the equivalent of four Canadian LNG export facilities. But that would require pipelines to tidewater, which — perversely — environmentalists oppose.
Green Party Leader Elizabeth May’s resistance to gas pipelines and opposition to nuclear power belie her fervent claim to want to save the world from climate Armageddon.
The UN forecasts the pandemic could cut global economic growth to minus one percent from a previously forecast increase of 2.5 percent. That represents roughly $3 trillion in lost production.
At the moment, developed countries are scrambling to cope with their devastated economies. Nor is climate change top-of-mind in the non-Western world, which is now responsible for three-quarters of global emissions.
International pressure to give up on the calamitous fantasy of net zero emissions by 2050 will be intense, although it remains a throne speech commitment for the government.
China’s GHG emissions, representing 28 percent of global emissions, will grow at least until 2030, given the country’s massively increased coal production.
Although the U.S., at 14 percent, has withdrawn from the Paris accord, it actually leads the world in greenhouse gas reductions because of its shift from coal to natural gas.
India, currently at seven percent of world emissions, will increase its share as it works to alleviate the poverty of 276 million people living on less than $1.25 a day.
As for Germany, its transition to green energy has been called “an impending disaster.” Chancellor Angela Merkel recently caved on support for a green energy plan after her MPs rebelled against it.
One country that can afford to play-act is Norway, whose total financial assets exceed its debt only because of North Sea oil. Its $1.1-trillion sovereign-wealth fund just blacklisted four of Canada’s largest oil producers, citing concern over high carbon emissions.
If we could stomach the hypocrisy, following Norway’s example would provide a double benefit: moral superiority and oodles of cash.
So far, Prime Minister Justin Trudeau is content with virtue-signaling on Canadians’ behalf, although he is fine personally, thank you very much.
There is also a geopolitical development to consider. Deepening tension with China, in part because of its deadly coverup of the COVID-19 virus, will weaken an already unraveling international consensus on climate change. Allies cannot afford to dissipate their competitiveness during a Cold War.
Canada has the dubious distinction of being the only country rich in energy resources whose government’s policy is to keep most of its wealth buried forever in order to address a global problem that it cannot solve but which countries that could solve it won’t.
This is self-harm on a massive scale for no reason other than virtue-signaling in what is now increasingly an echo chamber. Could there be a less appropriate time for indulgent vanity than during the devastation of a global pandemic?
Read more at Financial Post
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