Justin Trudeau may have hammered the oilsands but real output from oil and gas extraction has grown faster than under Harper
It will surprise most Canadians to learn that GDP from oil and gas extraction has risen twice as fast under Justin Trudeau as during Stephen Harper’s time as prime minister. Similarly, U.S. oil and gas production has fared better under Joe Biden than it did under Donald Trump — despite Biden’s vaunted mega-spending on green energy. In a rarity for politicians, you don’t hear either Trudeau or Biden boasting about record output on their watch: growing fossil fuels production contradicts the environmental story they tell their respective bases.
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But the data are clear. Statcan’s GDP series (see chart) show that oil and gas extraction rose 24.8 per cent in the first seven years and 10 months of the Trudeau era versus 15.4 per cent in the nine years, eight months Harper held office. The average monthly gain, which adjusts for Harper’s longer tenure, works out to 0.26 per cent for Trudeau versus 0.13 per cent for Harper — exactly twice as much. This divergence is even more surprising when you recall that oil prices were much more buoyant for most of Harper’s time in office than Trudeau’s.
Under Trudeau, oil and gas extraction has outpaced the overall economy, although partly because the economy has grown only an anemic 14.4 per cent on his watch. In the Harper years, oil and gas slightly lagged overall economic growth. What really changed under Harper was a doubling of oilsands production. The lower price for oilsands bitumen dampened the GDP earned from oil, even as the number of barrels produced increased.
In the Trudeau years, by contrast, oilsands growth slowed markedly while conventional oil and gas output accelerated. Alberta’s complaints about Trudeau’s policies hampering the oil sands are fully justified. But oil and gas output has been allowed to surge in Newfoundland & Labrador (which happens to have a Liberal government) and British Columbia (currently run by the NDP).
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U.S. oil production under the Trump and Biden presidencies shows a similar gap between perceptions and reality. Trump cultivated a “Drill, baby, drill!” persona while Biden adopted high-profile anti-oil measures such as a drilling ban on federal lands and a moratorium on the Keystone XL pipeline. Even so, Federal Reserve Board data show oil and gas output rising 25.6 per cent in Trump’s four years versus 19.1 per cent in just the first two years and nine months of the Biden era. Maintained over four years, that would be a 27.8-per cent gain for Biden, more than two points higher than for Trump (who no doubt would charge the production numbers had been fabricated).
That Trudeau and Biden have seen greater fossil-fuel growth than Harper and Trump provides a couple of useful reminders. First, the image politicians cultivate and the reality of what they do can be sharply different. This is especially true of someone like Trudeau, who is more performance artist than policy implementer. That isn’t to say his hostility to the oilsands wasn’t costly to Canada, however. Faster growth of oil production in the U.S. since 2015 shows this country missed a major growth opportunity.
But Trudeau was never as wholly against fossil fuels as the persona he presents. He cultivated the environmental lobby by disparaging the oilsands, even speculating about shutting them down, and never missing high-profile announcements of major subsidies to EV battery plants and other green ventures. In contrast, announcements of fossil fuel projects like the Bay du Nord oil platform off Newfoundland and the purchase of the Trans Mountain Pipeline (scheduled to open early next year), he delegated to underlings. But he allowed these projects to proceed. Which is partly why, as Environment Commissioner Jerry DeMarco recently pointed out, “Canada is the only G7 nation that has not achieved any emissions reductions since 1990.”
The more important lesson is that — thank goodness! — governments do not control real-world events as much as either they pretend or the public assumes. If market forces, such as higher prices or new technologies, such as fracking, favour oil and gas development, it is hard for any politician to stop the industry from expanding. This is especially true for natural resources, which in this country are under provincial jurisdiction.
Record high oil and gas output in Canada and the U.S. during the supposedly green administrations of Biden and Trudeau demonstrates the power of market forces over political posturing. As long as there is demand for fossil fuels, firms will find a way to meet it, either here or abroad.
Philip Cross is a senior fellow at the Macdonald-Laurier Institute.
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Philip Cross: Trudeau vs. Harper on oil and gas output. The result will surprise you
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01.12.2023
Justin Trudeau may have hammered the oilsands but real output from oil and gas extraction has grown faster than under Harper
It will surprise most Canadians to learn that GDP from oil and gas extraction has risen twice as fast under Justin Trudeau as during Stephen Harper’s time as prime minister. Similarly, U.S. oil and gas production has fared better under Joe Biden than it did under Donald Trump — despite Biden’s vaunted mega-spending on green energy. In a rarity for politicians, you don’t hear either Trudeau or Biden boasting about record output on their watch: growing fossil fuels production contradicts the environmental story they tell their respective bases.
Subscribe now to read the latest news in your city and across Canada.
Subscribe now to read the latest news in your city and across Canada.
Create an account or sign in to continue with your reading experience.
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But the data are clear. Statcan’s GDP series (see chart) show that oil and gas extraction rose 24.8 per cent in the first seven years and 10 months of the Trudeau era versus 15.4 per cent in the nine years, eight months Harper held office. The average monthly gain, which adjusts for Harper’s longer tenure, works out to 0.26 per cent for Trudeau versus 0.13 per cent for Harper — exactly twice as much. This divergence is even more surprising when you recall that oil prices were much more buoyant for most of Harper’s time in office than Trudeau’s.
Under Trudeau, oil and gas extraction has outpaced the overall economy, although partly because the economy has grown only an anemic 14.4........
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