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Many missed opportunities in Canada’s resource sector

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Think for a moment of all the workers that are needed to build an NHL arena.

Then we’ll explore something that’s really surprising.

Before an arena gets built, people are required to survey and excavate the site. Engineers design site plans and conduct safety checks. Workers drive cement trucks and make the foundation. Crane operators move necessary materials, construction workers build the seating areas, and plumbers, electricians and other tradespeople set up the various bathrooms, food stalls and retail space. Project managers, investors and lawyers help organize the process.

These large arena projects support a lot of good paying jobs.

Now imagine all of the opportunities there would be for Canadian workers if there was an NHL-sized arena being built in Canada every single day for a year.

If the idea sounds like a fantasy, that’s roughly equivalent to what we’re missing out on because of stalled projects in Canada’s mining and oil and gas sectors.

Some of the stalled natural resource projects are so enormous they make NHL arenas look like five cent candies.

Consider the cancelled Petronas liquified natural gas project (B.C.). The cost of this project alone is about 60 times the bill for the new NHL arena that’s currently being discussed in Calgary.

SecondStreet.org made a list of all the major natural resource projects we’ve missed out on over the past five years; projects where government policies caused or contributed to the delays. The total bill was just shy of the cost of building an NHL-sized arena every single day for a year.

Workers in large urban centres may think the stalled projects in rural parts of Canada don’t affect them. But that’s not true.

Consider Andre Williams’ story. He’s a manager at a manufacturing company in Scarborough, Ontario that coats pipeline components before they are laid in the ground. When pipeline orders slowed in the past, Andre’s company had to temporarily cut hours for staff down to four days a week.

Andre told us, “one of my guys, when we went to four-day weeks he was unable to pay his mortgage. He was in financial strain and even though he’s working four days he was unable to provide for his family the way he should and it was really affecting him emotionally.”

When a worker struggles financially, they’re less likely to buy a new car, dine out or buy something from a local store, so a multitude of other industries are affected as well.

And when workers and businesses struggle, they pay less in taxes. Governments often fill these missing revenue gaps by raising taxes.

Andre put it best when we spoke with him about developing natural resources in Canada. He told us, “every time you take two steps forward there’s a government policy that takes you three steps backward and it’s extremely frustrating for workers and for companies in general.”

Evidence of this comes from the massive Mackenzie Valley Pipeline project (Northwest Territories) that was cancelled in 2017. The bill for this project was about the same as building 27 arenas. Incredibly, when this initiative was halted, a spokesman for the company told the CBC they expected it would take two years to get government approval, but the process instead took approximately six and a half years.

For the sake of workers and taxpayers across the country, governments would be wise to review industry’s concerns – and most importantly, to act on them.

 

Colin Craig is the President of SecondStreet.org, a new Canadian think tank

This column was published in Sun newspapers on June 6, 2019

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