Prime Minister Carney is convinced oil and gas revenues will save us from U.S. President Trump, but at what cost?

CHELSEA, QUE.—Someone in the federal government owes us a detailed explanation of how oil and gas revenues—and the jobs and prosperity they allegedly secure—justify the misery being inflicted on Canadians in many different places and different ways by climate change-driven emergencies.

The damage is all around us. It is undeniable and predicted to get worse—and very much more expensive—very soon. Does an expanding fossil fuel sector even cover the cost of the climate chaos it is unleashing? (Leave aside, for the moment, the heartbreak and loss suffered by many ordinary people.)

Already, insurance payouts came up to $2.4-billion last year. This followed a record $8.5-billion in 2024, when the Calgary hailstorm cost insurers $3-billion, the Jasper wildfire $1.1-billion, Quebec flooding $2.7-billion, and Ontario floods more than $900-million. 

Statistics Canada reports that between 2019 and 2025, insurance premiums for home and mortgage coverage increased by 45 per cent, fuelled significantly by climate catastrophe claims. 

That is only the insured losses. By some calculations, uncovered expenses are four or five times as high. This includes the costly destruction of public infrastructure—the washed-out bridges, buried highways, toppled power grids, overwhelmed sewer systems, burned-out town halls and arenas, and flooded light-rail transit stations that follow every extreme weather event. The Canadian Climate Institute suggests the repair bill in coming years will amount to $25-billion annually.

Municipalities are on the hook for much of that, but, obviously, need assistance from the province and federal governments. From us, in other words, the taxpayers. 

We are also paying, mostly uncomplainingly, for the cost of fighting the fires, cleaning up after floods and windstorms, and helping our neighbours recover their lives. There are now-mandatory cooling centres in major cities—an additional burden on health-care providers during deadly heat domes—and the escalating cost of supporting farmers and businesses ruined by now almost-yearly fires, floods, or droughts.

Meanwhile, our four major fossil fuel companies—Cenovus, Suncor, Imperial, and Canadian Natural Resources—earned another $13.3-billion profit in the second quarter this year, as the industry cashes in on the disruption caused by the United States-Iran war and interrupted oil flow through the Strait of Hormuz, wrote economist Jim Stanford in The Toronto Star on Aug. 8. 

Does any of that money go into reparations? Is the industry required to compensate for the damage that burning their product is doing to our forests, farms and cities? No. The clamour is growing for a windfall profits tax, from the usual suspects—Oxfam, the federal NDP, various environmental groups—but demands are falling on deaf ears.

Nor have oil companies been eager to re-invest those profits in job-generating new projects—however environmentally damaging—because of the uncertain future of oil and gas. And they are notorious skinflints when it comes to remediating the immediate damage their oil sands operations do to water, forests, and local species. Instead, profits go back to shareholders—who are mostly American— as well as executive compensation and acquisitions. 

This consequence-free pillage is justified by the industry’s apologists in the federal and Alberta governments on the grounds that oil and gas is our largest and most lucrative export and, like it or not, we need to keep expanding production, and shipping abroad, as a hedge against U.S. President Donald Trump’s trade predations and a brake on Alberta’s separatist drift. 

This sounds plausible, absent detailed evidence. It is true, indisputably, that oil and gas has been an immensely profitable enterprise, bringing in combined revenues to federal and provincial governments of an approximate average of $25-billion annually, and supporting 57,000 direct jobs in oil and gas extraction in its heyday. Spin-off jobs in construction, maintenance and servicing saw a larger decline from 70,000 to around 47,000. 

Even now, sources report that oil and gas contribute between 3.2 to 5.7, or 7.7 to 9 per cent of our annual GDP, depending on how benefits are calculated and who is doing the counting. There is no doubt oil and gas is our single largest export, amounting to $182-billion worth of sales to 137 countries—although 89 per cent still heads to the U.S.

Only the diligent and the curious will take time—or have the expertise—to juggle the conflicting numbers. That is where government accountability comes into play. We need a scrupulous, objective accounting of the actual financial payback from the sector—one that takes into account the costs associated with climate change, even the lost opportunity cost of not pursuing clean alternatives vigorously. Our government, after all, is supposed to be working for all Canadians, not just the wealthiest industry.

Instead, we get warmed-over propaganda from Big Oil’s well-funded communications teams, recycled by the likes of federal Energy Minister Tim Hodgson, along with the pious claim that all that oil money pays for our health care, hospitals, social services, and so on. A little smoke, apparently, is a small price to pay for a caring society. 

Without that fossil fuel revenue, $10-a-day child care would be stalled, patients would be lined up in corridors—some even dying, while being unattended to—in overcrowded hospitals. And dreams of a national pharmacare program, decent and affordable care for seniors, or serious investment in clean energy would be unattainable.

But, wait … isn’t that already happening? Maybe, say Big Oil’s boosters, but imagine how much worse it would be without the sector’s average $25-billion annual contributions to provincial and federal treasuries? This is a familiar, circular argument, but it is based on some untested assumptions.

First, as energy journalist Markham Hislop points out in his Aug. 9 Substack article, direct employment in the oil sands has been declining since a peak of 57,000 jobs in 2014, and sits at around 50,000 in 2025. This reduction has been achieved through automation, corporate efficiencies, and the industry’s focus on extracting the most profit from long-existing mines, rather than opening new ones. 

Many industry watchers predict the decline will continue, as clean energy investment surges in other parts of the world.

Second, no serious scenario envisions an immediate halt to all oilsands activity. But the sector should be engaged in managed decline, not expansion.

In the meantime—a just transition, anyone? Alberta, and the rest of Canada, is blessed with ingenuity, technological expertise, and other sources of energy, including—but not limited to— wind, solar, and critical minerals. 

To help us get a clearer picture of how dependent we actually are on oil and gas, why doesn’t Prime Minister Mark Carney’s government offer an informed analysis of how much money, economic activity, and employment a concerted drive to support clean energy would actually create?

And what about the billions upon billions of dollars that federal and provincial governments have shovelled at the fossil fuel industry, and continue to contribute today in backstops for a new oil pipeline to the West Coast, tax credits for a dubious carbon capture and storage project, and funding for LNG? Are those contributions subtracted from the pile of money oil and gas is supposedly generating for our economy?

Sorting through these conflicting claims is clearly going to take an economist with an extensive background in, say, the corporate sector, international finance, and within the federal bureaucracy itself—even a stint or two leading a central bank.

Any names come to mind?

Carney clearly thinks increased greenhouse gas emissions are necessary to keep the oil flowing and our economy humming despite the fact that we trail the entire G7 on containment, and despite the associated sacrifice of so many Canadians whose lives and livelihoods have been upended by extreme weather this summer. 

General anxiety about Trump’s impact on our future, and continuing admiration for the prime minister’s worldly intelligence, have muted criticism of his fossil fuel boosterism.

But if his view is the correct—and only—path to preserving national prosperity in this perilous moment, don’t just parrot oil industry talking points. Prove them.

Susan Riley is a veteran political columnist who writes regularly for The Hill Times.

The Hill Times