It’s a slap in the face for an industry that has already been mistreated by previous Quebec governments.
In 2016, Quebec adopted the Petroleum Resources Act in order to create a regulatory framework for the production of oil and natural gas within the province. The Act sent a clear message to energy sector investors: Quebec is prepared to welcome you, as long as you respect the environment and our rules, which are among the world’s strictest. After all, it is in everyone’s best interests to protect the environment while enabling wealth creation.
Following the introduction of the Petroleum Resources Act, companies submitted drilling applications and invested millions of dollars in preparation for the local production of fossil fuels.
Unfortunately, the Quebec government then revealed the secret ingredient of its special poutine sauce: the arbitrary and interventionist state control of the economy.
But if you think the political crusade ends there, think again. The government also has no plans to provide fair market value compensation to the companies for the resources it will expropriate with its ban on developing fossil fuels. Fair market value is considered when other sectors face expropriation, so why is the energy sector being treated differently?
Foreign investors from every sector are waiting to see if the government is really going to unfairly expropriate companies that have followed the letter of the law. If this does happen, it will send a very bad message; namely that, in Quebec, the political class has no qualms about arbitrarily interfering in the economy, saying no to wealth creation and which have cost Quebecers thousands of jobs and millions of dollars of tax revenue that could have helped reduce the tax burden or fund public services.
Meanwhile, Quebecers will continue to import over 300,000 barrels of oil a day, and over $5 billion a year will be sent to Alberta and the United States to pay for the oil and gas we consume locally.
There’s nothing wrong with interprovincial and international trade, of course. But when there are energy resources here, and companies that want to develop them, it’s the height of hypocrisy to prevent that economic activity from taking place, to the detriment of the local economy, all in the name of environmental protection.
While it may almost be the case that there’s no such thing as bad publicity for pop stars like Lady Gaga, the same cannot be said about the economic decisions of the government that have a negative impact on Quebec families’ bank accounts. Let’s not make a bad political decision even worse and turn ourselves into an object of international ridicule.
Miguel Ouellette is Director of Operations and Economist at the Montreal Economic Institute.
This commentary was submitted by the Montreal Economic Institute, an independent public policy think tank based in Montreal. MEI is a Troy Media Editorial Content Provider Partner.
Through its publications and media appearances, the MEI stimulates debate on public policies across Canada by proposing reforms based on market principles and entrepreneurship.
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