Jason Kenney bends truth on oil, equalization ahead of meeting with Quebec counterpart

Alberta Premier Jason Kenney pitched his province’s energy sector as the financier of Quebec social programs, in the run-up to a meeting with his provincial counterpart later Wednesday.

Kenney is scheduled to meet Premier François Legault in Quebec City this afternoon. The Alberta leader is hoping to build stronger ties with Quebec as he wrestles with the federal government over energy issues.

Speaking to reporters after a speech to an economic forum in Montreal Wednesday morning, Kenney said Quebec is Alberta’s natural ally in its jurisdictional battles with Ottawa over legislation that seeks to add environmental regulations to oil industry development.

However, Kenney also repeated several misleading claims about Quebec’s oil consumption and the federal equalization payments program which are not likely to sit well with politicians in the province he is trying to court. 

“The $13 billion in equalization payments that form a large part of Quebec’s revenues comes disproportionately from Alberta and from our energy sector,” Kenney told reporters.

Because of that money, he said, Quebec should be prepared to support his government’s quest to build a cross-Canada oil pipeline — or at least move forward with a project that would see natural gas from Alberta refined in Quebec.

Quebec Premier François Legault is scheduled to meet with Kenney later today in Quebec City. (Ryan Remiorz/Canadian Press)

Supporters of a new cross-Canada pipeline to bring Alberta oil to terminals in new Brunswick — a revised version of the Energy East project that TransCanada pulled the plug on in 2017 — have been frustrated by Legault’s refusal thus far to back the project. 

“If you want to accept equalization payments that come from Alberta energy, then please help us to develop that energy and get a fair price for it,” Kenney said.

Yet the $13.1 billion Quebec is due to receive under the equalization program in 2019-2020 only accounts for around 11 per cent of the province’s consolidated revenues. Personal and consumption taxes are Quebec’s largest revenue sources. 

Kenney’s portrayal of Alberta money heading directly to Quebec coffers also misrepresents how the equalization program actually works. It is a sum of money the federal government redistributes from taxes it collects across the country, not just from Alberta.

Where does Quebec’s oil come from?

While Kenney acknowledged the widespread environmental concerns surrounding fossil fuels, he also said that Quebec currently consumes around 60,000 barrels of oil daily. 

“A lot of that comes from foreign sources,” Kenney said. Without added pipeline capacity, according to Kenney, domestic demand for oil would be filled by countries with poor human rights records, including Russia and Venezuela.

“I’d rather that it be purchased from Canadian sources, helping to pay for Quebec social services, rather than buying foreign oil,” Kenney said.

However, since 2015, the vast majority of oil refined in Quebec comes from North American sources. Figures released by the National Bank last year indicate that less than 20 per cent of Quebec’s oil comes from overseas.

Moreover, as several observers have pointed out, refineries buy oil on the open market. Their suppliers fluctuate based on global prices, not on instructions from the provincial government.