Quebec, shale gas and Pandora’s Box
The Globe And Mail
British Columbia, Alberta and Saskatchewan are all pushing ahead with shale gas development using hydraulic fracturing, or fracking. Newfoundland and Labrador, the only other have-province in Canada, has also green-lighted exploration for shale gas.
Some of the revenue generated from shale gas development in these four provinces will be channelled to Quebec via the equalization program to pay for its public services. The question starting to percolate in the have-provinces is straightforward. Should provinces not willing to develop their non-renewable natural resources profit from the depletion of non-renewable natural resource development in other provinces?
Put another way, should equalization payments be reduced by the amount a province could have expected to generate if it had developed the non-renewable resource in an orderly fashion?
This isn’t just an academic argument. You expand the idea that provincial governments could cut out all industrial activity – forestry, mining, oil and gas, etc. – and then wait for the royalties and taxes from resource development in other provinces to roll it.
I suspect the people who crafted the Constitution, and its provision to ensure that all Canadians have access to comparable public services, didn’t envision a world where provinces would deliberately deny substantial economic development opportunities.