Tag Archives: oil and gas

Basic Living Standard Arithmetic For Ottawa And All Governments

September 9, 2024 The Silo Leave a comment

September , 2024

To: Canadians concerned about prosperity
From: Don Wright
Date: September 4, 2024
Re: Some Basic Living Standard Arithmetic for Governments

Governments often talk about “creating jobs,” but what they really do is choose some jobs at the expense of others. With their myriad spending, taxing and regulatory decisions, all governments try to direct job growth to different sectors – public or private, services or goods, resources or non-resources, and so on.

We all hope governments choose wisely.

It would help if they started paying more explicit attention to one factor: The impact of their decisions on Canadians’ standard of living.

A country’s standard of living is largely determined by the wages and net government revenue its tradeable goods and services sector can pay while remaining competitive against international competitors. If a company or sector is uncompetitive, it will have to either lower its wages, pay less tax or go out of business. These pressures on companies are never-ending. They determine both the wages a sector can afford to pay, and, through the interconnectedness of labour markets, average wages across the economy.

Some industries are so productive they can pay relatively high wages and significant taxes and yet remain competitive.

Industries that aren’t as productive can only pay lower wages and less tax.

Governments whose policies have the effect of moving labour from one sector to another had better pay attention to such facts.

Canadians may not like it but many of the country’s best-paying and most tax-rich jobs are found in natural resources. I was head of British Columbia’s public service. For most of B.C.’s history the province’s economic base has been dominated by natural resource industries – forestry, mining, oil and gas, agriculture and fishing. For a variety of reasons, these industries face strong political headwinds. Many groups press to constrain them and diversify away from them. The alternatives proposed include technology, film and tourism.

A few years ago, I asked officials in the province’s finance ministry to assess the relative performance of these different industries along the two key dimensions of average wages and net government revenue. In 2019-20 B.C. spent approximately $11,700 per citizen. Half the population was employed that year. So, to “break even” (i.e., have a balanced budget), the province had to collect $23,400 per employed person. If you look at things this way, each industry’s “profit” or “loss” is simply its revenue per employee less $23,400.

No such calculation will be exact, of course.

Several assumptions have to be made to get to an average “profit” or “loss” per employee. But, with that caveat, the numbers the officials brought back were telling. The industry with the biggest return to the province was oil and gas, at $35,500 per employee. Forestry was next, at $32,900. Then mining, at $14,900, and technology, though only at $900.

By this measure of profit and loss, however, film was a money loser, at -$13,400, and so was tourism, at -$6,900.

The negative numbers for the film industry reflect the very significant subsidies that B.C. (like many other provinces) provides to this sector. The negative number for the tourism sector primarily reflects low average wages per employee, which translate into relatively low personal income tax, sales tax and other taxes paid by employees.

These “profit or loss” numbers are not in any way a judgment about workers in these sectors. People find the best employment available to them in the labour market. Relative demands in that market are determined by many factors, none of which workers control. That said, if governments consciously move resources from the “profit” industries to the “loss” industries, they had better be aware of the consequences for wages, taxes and the overall standard of living.

The numbers I’ve cited were for a single year in British Columbia. The same analysis for other provinces or for Canada as a whole would likely produce different numbers – though I’d be surprised if the overall pattern were much different. Voters will draw their own conclusions about the impact on British Columbians’ standard of living from constraining the resource industries and promoting other industries instead.

Unfortunately, this type of analysis is rarely done when Canadian governments make decisions about what types of jobs they want to give preference to through their taxation, spending and regulatory decisions. They should do more of it. Ultimately, if [they] care about Canadians’ standard of living, governments need to start paying attention to the basic arithmetic of that standard of living.

Don Wright, senior fellow at the C.D. Howe Institute and senior counsel at Global Public Affairs, previously served as deputy minister to B.C.’s premier, cabinet secretary and head of the public service.

Earth

Canada Banks Fueling Canada Climate Crisis

June 18, 2024 The Silo Leave a comment

Did you know that Canada’s five biggest banks are among the 20 largest fossil fuel financiers in the world?

Since the Paris Agreement was signed in 2015, they have invested over $900 billion into the fossil fuel industry. This means that your hard-earned dollars are being invested in projects that make it impossible to meet Canada’s climate targets. While not well known, the financial sector is the missing piece in ensuring a climate-safe future.

Last week, the CEOs of Canada’s top 5 banks were in Ottawa testifying about their role in the climate crisis. Environmental Defence was on the front line of this critical moment. We were invited to testify in this important study and use our expertise to advise policy solutions to align our financial system with climate action.

Won’t you help us keep the heat on the banks to take responsibility for their role in the climate crisis?

Canada can only keep a safer climate if finance aligns with climate action, and new rules from the government would help make that happen. And, we are creating public awareness of the issue and mobilizing Canadians to speak up by writing letters and attending rallies- increasing the pressure on the federal government to take action.

At a time when climate-fueled disasters (such as wildfires, droughts and floods) are rising, it’s ludicrous that Canadian banks are allowed to fund oil and gas industries at a rate of over $100 billion per year. We will be watching future proceedings closely. And, we will continue to push the federal government to ensure that Canadian banks are helping, not hindering our climate goals. For The Silo, Alex Walker. Program Manager, Climate Finance for Environmental Defence.

Sci-Tech

Why Radiation Protection Makes Sense- even at ‘Low’ Exposure levels

October 5, 2022 The Silo 1 Comment

Radiation is all around us.

It occurs naturally in our environment, coming to us from the sun, from the soil and foods that we eat, and in the air that we breathe. It is omnipresent across a diverse cross section of industries. We tend to associate radiation with the nuclear industry, but the reality is that we come across radiation sources in numerous other areas: construction, health care, oil and gas, research, manufacturing, food processing – to name just a few.

With radiation being everywhere in our lives, it is not surprising that it garners a lot of attention, curiosity and, often, worry.

With more than 15 years as a career radiation protection professional, I’ve had to respond to many occupational radiation safety questions — some have related to regulations and compliance, others to potential health effects of exposure and ways to minimize such exposure. In all cases, it is best to rely on well established radiation physics concepts and scientific data, where available.

While there is not much that we can do to escape natural background radiation exposure, we do want to avoid any unnecessary exposure to high levels of radiation, such as the potential hazard due to elevated radon (a radioactive gas) in our homes and workplaces.

Radon testing of homes is the simplest first step you can take to protect yourself and your family from radon gas, but all too often we do not make the time to educate ourselves and make this a priority. Workplaces are required to have a radiation protection program in place that is appropriate for the type of radiation and potential risk in their industry. But it takes time and investment to develop these programs, and it requires the commitment of both employers and workers to put these programs into practice.

Our challenge is that radiation and its associated risks are not always well understood.

On the one hand, we do not wish to alarm anyone unnecessarily, yet we want to make sure that the public, workers and employers are aware of the steps they need to take to stay safe. Remember, we are talking about an “invisible” hazard that very rarely causes ill health effects in the short-term. Additionally, the existing radiation protection models are built on what we call the linear no-threshold concept, which, in simple terms, is based on studies of the atomic bomb survivors from the Second World War in Japan and other high-exposure situations, and extrapolates the information to the potential health effects of low exposures.

An agency of the World Health Organization (WHO) recently published a study on the health effects of low-level exposure to radiation that provides data to support the validity of the linear no-threshold model. We encourage all who read the study (available at The Lancet Haematology) to not get alarmed and to keep the study conclusions in perspective.

It suggests that extended exposure to low level of radiation increases the risk of developing leukemia.

A frightening statement, but we have to keep in mind that the increased risk is small, in line with what we have estimated based on the modeling concepts. This boils down to two things: first, it is important that we continue to apply the ALARA principle — “As Low as Reasonably Achievable” — to all our of interactions with radiation; and second, that we continue to view the numbers associated with radiation and risk in the proper context. The study points to a “small increase” of risk of dying from cancer from low levels of radiation exposure.

Let’s put this into perspective.

If we extrapolate this study’s conclusions for nuclear workers to persons living near Canadian nuclear plants, people are 6,000 times more likely to die in a car accident, than to die from leukemia due to doses received from reactor plant emissions. Yet most of us think nothing of driving to work, driving our kids to school, or driving to visit friends and family. The radiation risk is there, but it is significantly smaller than the risks we accept every day, often without even thinking or worrying about them.

More research is required on the health risks from low-level radiation exposure, and there are efforts underway around the world to make it happen. At the Radiation Safety Institute, we will be looking forward to hearing about more study results. In the meantime we invite all people who are interested in the subject of radiation safety, who have a question or a concern, to reach out to our Free Information Service at 1-800-263-5803 or by e-mail at info@radiationsafety.ca. Let’s keep the conversation going. For the Silo, Laura Boksman Chief Scientist at the Radiation Institute of Canada.