Canada's greatest energy problem is not that it produces too little oil, but that it has spent more than a decade making it increasingly difficult to sell it, writes Bryan Brulotte in a National Post op-ed. Ottawa's decision to support, in principle, a new pipeline to Canada's Pacific coast is encouraging, but approval alone will not restore investor confidence. Trust, once lost, must be earned back.
Decades of Policy Uncertainty Drove Investors Away
For years, governments layered Canada's energy sector with carbon taxes, increasingly complex regulations, emissions caps, tanker restrictions and political uncertainty. Investors responded exactly as rational investors should: they invested elsewhere. The evidence is impossible to ignore.
Northern Gateway was cancelled after Enbridge had already invested approximately $373 million. Energy East collapsed after TC Energy spent roughly $1 billion pursuing approvals. Kinder Morgan ultimately abandoned the Trans Mountain Expansion, forcing Ottawa to purchase the project for $4.5 billion before its total construction cost climbed from an estimated $5.4 billion to approximately $34 billion.
Boardrooms Remember the Billions Lost
Boardrooms remember those numbers. That is why no private company has yet stepped forward to champion another Pacific pipeline. This is not a failure of capitalism, Brulotte argues, but the predictable consequence of public policy. Yet the greatest cost has not been cancelled projects themselves; it has been the opportunity Canada has surrendered.
Nearly 97 per cent of Canada's crude oil exports still flow to a single customer: the United States. No major energy-producing nation should find itself so dependent on one market for one of its largest exports. Recent trade disputes have demonstrated how strategically vulnerable that dependence has become.
Billions Lost in Discounts on Canadian Oil
The financial consequences have been enormous. Because Canada lacks sufficient export capacity to reach global markets, Canadian heavy crude has frequently traded at discounts of US$10 to US$20 per barrel below international benchmark prices, and at times considerably more. Across millions of barrels exported every day, those discounts have cost Canadian producers, governments and taxpayers tens of billions of dollars over the past decade.
Those are not merely corporate losses, Brulotte emphasizes. They are hospitals not built, roads not repaired, defence capabilities not funded, taxes not reduced and public debt not repaid. The true cost of indecision has never appeared in a federal budget, but Canadians have paid it nonetheless.
A Nation-Building Project for National Security
This is why a new pipeline is no longer simply a commercial undertaking. It is a nation-building project. Every additional export route strengthens Canada's sovereignty, diversifies the economy and reduces dependence on a single customer. Energy infrastructure has become an essential component of national security.
If Ottawa genuinely believes this project serves Canada's national interest, it must also acknowledge that government created much of the uncertainty that now discourages private investment. No responsible board of directors can expose shareholders to unlimited political and construction risk after watching three major pipeline projects either collapse entirely or experience extraordinary cost overruns.
