The Blueprint: Canada's Conservative Podcast - The Impact of Inflation on Oil and Gas

00:00:00.000 hello and welcome once again to the blueprints this is canada's conservative podcast i'm your

00:00:09.540 host jamie schmell member of parliament for halliburton for the likes brock bringing you

00:00:13.300 new content every single tuesday 1 30 p.m eastern time we do appreciate you joining us and with this

00:00:19.160 content it is great messaging you might not be getting by the mainstream media so with that we

00:00:24.180 ask that you like comment subscribe share this program help us push back against the ever-moving

00:00:29.220 liberal agenda and in fact if you can't watch or listen to it all right now right this second you

00:00:35.220 can download it listen to it later on on platforms like cast box google play spotify you name it it is

00:00:41.340 out there great topic going on today i know we touched on it a bit last week with our guest ed

00:00:46.320 fast the finance critic of record member of parliament for abbotsford we're going to continue

00:00:51.020 on analyzing and taking another look at the newly sworn in liberal cabinet because i think there

00:00:58.600 are some folks in this cabinet that are going to cause great harm to our national unity and to

00:01:05.180 talk more about that we have greg mcclain a good friend of the show member of parliament for calgary

00:01:09.720 center he's also the critic for natural resources of record we do appreciate him coming on thank you so

00:01:14.860 much once again thank you jamie great to see you all right well let's get right at it because this

00:01:20.640 might take a lot of our conversation we have a a couple of very scary appointments in in your neck

00:01:27.740 of the woods in the uh natural resources sector we have john wilkinson moved over from uh environment

00:01:34.240 over to natural resources replacing seamus uh or uh seamus um uh oregon yeah oregon sorry yes i had a

00:01:42.100 brain cramp there and uh he was i guess from newfoundland so he was somewhat fairly pro energy uh replaced

00:01:49.740 him with wilkinson and then brought in mr censorship mr bill c10 what you can see on the internet and

00:01:56.580 watch steven gilbo brought over from heritage into environment and we all know his background

00:02:02.680 heavily in the activism probably hasn't created a job ever what does this mean what are you hearing

00:02:09.140 on the ground what does this mean for your sector your your province the oil and gas industry

00:02:13.000 yeah let's analyze that jamie because first of all seamus oregon uh was the minister of natural

00:02:18.380 resources previously and seamus and i had a dialogue because seamus is from a producing province and

00:02:23.780 i think the province in canada most dependent on oil and gas and the revenues that come from oil and

00:02:28.500 gas that pay for government programs is of course newfoundland where seamus oregon is from so the

00:02:33.860 dialogue that seamus needed to have or pardon me minister oregon needed to have had to have that

00:02:39.140 balance in there about why we need to continue to develop our natural resources in this country

00:02:43.600 along with the environmental message and as you know in caucus i'm big on the environmental message

00:02:48.520 how we do things very well in this country from a natural resources perspective and we need to

00:02:53.200 continue to apply technology so that our carbon footprint is lower and lower and lower

00:02:57.540 seamus did that well you can kind of tell from all the decisions that cabinet made that his voice

00:03:02.800 wasn't carrying that much sway in cabinet while other parties were actually moving in a different

00:03:08.000 direction with obviously a different agenda and that agenda now is quite clear uh jonathan wilkinson

00:03:14.980 has been the minister of the environment minister wilkinson and frankly i've appeared at the minister at

00:03:19.540 the uh environment committee of you know standing uh committee of parliament and i find uh my questioning

00:03:26.620 to mr wilkinson at the time our colleague dan albus inviting me there to question the minister

00:03:30.740 uh very smug somebody that you know frankly doesn't know how to collaborate doesn't know how to work

00:03:37.740 doesn't know how to actually work to get things done with other parties it's his way or the highway

00:03:43.320 and you can kind of tell as you and i have discussed before environment is a department without much

00:03:48.540 programming but with lots of funds that it drips into a bunch of organizations that repeat the messages

00:03:54.680 that the government wants to hear so it's sort of like okay we will fund this organization and they

00:03:59.880 will deliver a message that we will latch on to it's this circle of money in politics of taxpayer money

00:04:05.520 of how the government gets to keep their agenda moving jonathan wilkinson now has moved over to

00:04:10.820 natural resources and natural resources of course has a lot of programming and our can has a bunch of

00:04:17.940 money allocated through cabinet to actually apply programming about how we move forward in the

00:04:23.480 direction of actually making uh our our production more environmentally friendly my great concern is that

00:04:30.560 minister wilkinson does not really understand how we actually make our production in canada more

00:04:35.460 environmentally friendly he's more bent towards actually shutting down our production because

00:04:40.080 he sees it as much of the rest of the world you know it's the same production it is not the same

00:04:44.880 production it is much better production serving our energy needs we are the energy supplier of choice

00:04:50.200 in the world and we need to know that on top of that they named minister guilbo as you talked about the

00:04:57.300 previous minister of communications who completely blew that file i mean anybody watching parliament

00:05:02.020 saw what what that bill was about c10 internet censorship the effective end of net neutrality the

00:05:08.680 effective re-imposition of the crtc with a new raison d'etre talk about you know going where canadians do not

00:05:16.480 want to go at this point in time hopefully they're not watching during a you know major world pandemic

00:05:21.400 because this is censorship at its most extreme well he failed at that file and now they're pushing him

00:05:26.240 into environment let's recognize everybody had a life before they came in department most of us did

00:05:31.000 mr guilbo's life before we came in department was as the head of ecu-ter which is really the quebec

00:05:37.140 branch of greenpeace so all he's been is an activist do you know what percentage of canadians are

00:05:42.160 represented by activists zero actually but how about you know representative four percent maybe

00:05:47.240 so now we're going to have the tail wagging the dog as far as our environmental policy about what's

00:05:53.140 good for the environment what's good for the environment for canadians what's good for the

00:05:57.540 world is being driven by ideologues that really don't have a sense of the outcome and are not

00:06:02.820 transparent about where they're taking canadians so you're saying there's a couple things to unpack

00:06:08.360 there you're saying with the the money flowing from government to other organizations that parrot a

00:06:13.200 message or create a narrative that the government then follows we see or have evidence there's been

00:06:18.920 lots of research done in this of of influence from different countries different organizations

00:06:24.100 where anti-energy anti-oil and gas funneling money to organizations to to fight that cause to fight

00:06:31.580 canadian energy production and now we're just going to see it on the other hand with the government of

00:06:37.080 canada actually potentially funneling money into the friendly organizations that will create the

00:06:42.120 narrative that the government wants to follow well it's been doing it for years i mean it's nothing new

00:06:46.180 that the federal government funds organizations that stand in the way of canadian projects and all

00:06:51.100 in them all in the in the whole issue of virtue signaling saying okay we'll fund this organization

00:06:56.160 because they have a very you know positive agenda we want to make sure that they have the rights to

00:07:00.520 you know commit the law fair we call it to delay these projects and those are all funded by government

00:07:06.020 programming much of that government program comes from organizations that are funded by the government of

00:07:10.600 canada so it's peripheral but it's still government of canada taxpayer money that's funding up

00:07:15.280 the lack of progress we're seeing in so many of our developments in canada yes jane

00:07:19.100 not only that so over the past six years or so we have regulated reports like no other we've stopped

00:07:27.440 pipeline development we've curtailed investment we've stopped in some cases projects that were

00:07:34.420 given approval from going ahead demand is up warnings all over the place all over the world about

00:07:41.340 soaring energy prices especially this winter and yet we have a very responsible industry here in this

00:07:48.840 country being hampered by bad government policy all the while all these other actors these bad actors

00:07:57.020 are continuing to meet that demand with supply that don't care about the environment don't care about

00:08:02.320 labor don't really care about much other than making that profit and and i i i i i feel bad for those

00:08:11.160 who have already been hit with inflation already and now potentially this winter we're looking at

00:08:17.380 significant increases just to keep warm correct now you know everyone else as i said had his job

00:08:24.140 before we came here into politics now i worked in finance and in finance we always say follow the money

00:08:28.780 see who's making money in this process taxpayers are funding this taxpayers are funding this what is the

00:08:34.460 outcome i think it's very clear that we need to explain to canadians here's what you're funding at this

00:08:39.000 point in time you need to see what the end result is here now i'm very much solution driven and i want

00:08:44.520 to make sure that we're getting better environmental outcomes but also making sure that canadians

00:08:48.620 transparently understand what this means for them going forward and i think that's a clarity the

00:08:53.260 canadian the canadian government has not yet shown canadians on where their actual extra taxing of

00:08:59.200 canadians in this effort is going to lead us we're going to be energy insecure we're going to be paying

00:09:05.220 much more for energy that means much more for our food much more for heating our homes in the summer

00:09:09.980 much more for cooling our places and cooling our place in the summer and heating our place in the winter

00:09:14.520 this is something that we have to continue to pay in canada because we are not going to freeze

00:09:19.120 in the dark in canada this is our role make sure we've got the ability to sustain ourselves and

00:09:25.640 make sure we're actually well fed because you take a look in canada i'm from calgary and 90 percent of

00:09:31.280 our food comes from further than 100 kilometers away we're not a great food producing area around

00:09:36.640 calgary we get a lot shipped in that's true in many respects you think about how many canadians

00:09:41.340 eat bananas how many bananas do we produce in canada let me ask you this is all costing fuel to get in

00:09:46.300 here we all we all pay to have it delivered and as the government continues to ramp up the cost of that

00:09:51.300 and build inflation through taxes into what we're paying it has an escalating increase on what we're

00:09:58.700 going to have to spend now i'll ask you to ask your viewers do they see that escalating increase

00:10:03.500 in their incomes the answer is very clearly no so you've got inflation at one end with no uh with no

00:10:11.040 increase in your wages it's what we call stagflation is what we're going to face here at the end of the

00:10:15.480 day so the other thing is they these activists and those tied and snuggling up to government they won't

00:10:22.060 be the one freezing they won't be the one without full bellies like the the lights never go out in

00:10:28.160 caracas right in the government quarter right like the the government crew is always well flat fed their

00:10:34.440 their fridge always has bounty but to to those kind of on the lower to lower middle um they're going to

00:10:40.900 be hurt the most here like some just quick numbers here bacon and ontario increased 19 percent from

00:10:47.480 august of of uh 20 uh to 21 um in alberta we can go over some numbers here i don't want to

00:10:54.520 bore the the the viewers here but yogurt up six percent apple 16 percent bacon 15 percent british

00:11:00.340 columbia butters up 12 percent brown beef 15 percent uh new brunswick hot dogs april like these are

00:11:06.420 significant increases and and when you're filling your your cart and seeing that you're not getting

00:11:12.740 as much for what you're paying and like you said your paychecks aren't following this this matching rise

00:11:18.960 this really affects people exactly it affects people it affects your outcomes it affects the

00:11:25.660 way you feed your family of course it actually affects the choices you have to make as far as

00:11:29.840 what you spend your paycheck on at the end of the day and those choices are becoming more and more

00:11:33.760 limited uh you actually look i think the stats canada came out this month and you know it's the

00:11:39.280 highest it's been in 18 years at 4.4 percent nominal inflation for the month of september it's a

00:11:45.260 little lower than it is in the states so things we usually follow the states we'll find out where

00:11:48.900 we go this winter as things get more expensive in canada in the winter months uh so let's look at

00:11:54.300 that first of all but you're right food is the most important thing but we've also increased our energy

00:11:58.320 cost part of that of course is the fact that we've become short of energy because the world has

00:12:02.480 stopped producing energy because of all the uh the narrative around energy we've stopped drilling for

00:12:07.620 more oil and gas good thing in canada we're still well supplied here but there are all kinds of

00:12:13.240 actions trying to stop us from being well supplied for our energy inputs in canada that includes our

00:12:18.020 oil includes our natural gas which is one of the best ways we can help the world decarbonize was

00:12:22.920 actually getting our resource to markets this is one of the things we need to kind of build into

00:12:27.400 our solutions going forward on how we contribute to the world's energy security going forward because i

00:12:33.680 can tell you it doesn't matter how green your revolution is if people aren't eating and people

00:12:38.120 aren't able to pay their bills you're going to see a much more drastic outcome than anything we've

00:12:42.760 experienced thus far and that is already on the horizon in europe many of us didn't expect it in

00:12:47.940 europe as quickly as we expected in california i guess it's kind of a little bit of short-sightedness

00:12:52.100 in our part we're all we are all seeing the what we look at is the economic debacle that's happening

00:12:57.580 in europe as they continue to be on that quantitative easing uh ferris wheel if you will uh and eventually

00:13:04.420 that has to end nobody that's been on quantitative easing any country any uh currency issuing entity like

00:13:11.100 the european union shows how you get off that quantitative easing program and that's where

00:13:15.880 the canadian government is going right now it has actually quadrupled the size of the balance sheet of

00:13:21.540 the bank of canada 125 billion before the pandemic to 500 billion at this point in time so think about

00:13:29.440 the deficits we run in canada in between we had about a 350 billion dollar deficit last year

00:13:34.160 and and this year we're already over 150 billion dollars so it's gone up by 375 billion dollars of

00:13:41.080 the bank of canada that means much of the debt we're issuing three quarters of it is on our own

00:13:46.700 balance sheet you tell me how that works we're we're paying bills to ourselves you got a little

00:13:51.760 iou in our pocket that we owe ourselves a bunch of money and we've been we've taken out cash on it well

00:13:56.380 eventually that cash is going to be worth a lot less so those are the issues we have to face going

00:14:01.900 forward here there's there's all kinds of things in the push inflation i will tell you very clearly

00:14:06.400 and you know this and our colleagues know this as we've talked about it in caucus there was no other

00:14:13.020 outcome to quantitative easing and printing all this money but inflation so if that wasn't the

00:14:19.260 government's goal then they clearly didn't have their eye on the ball so this is the outcome that they

00:14:25.540 were hoping for now this is the outcome on the plates of canadians and they're trying to absolve

00:14:30.760 themselves of them saying well this is only temporary escalating inflation is not temporary

00:14:35.760 it only becomes temporary if you stop it but eventually people especially people that are

00:14:41.200 working are saying i'm working just as much as i ever did and i no longer have the take home pay to

00:14:47.000 pay my bills pay my kids food pay my you know my my fuel and my transport to go to work these are

00:14:54.500 real world things so we need to get ahead of this and make sure that we're addressing this

00:14:58.060 for the sake of canadians and our lifestyle i think for those on the left they believe that

00:15:02.980 government can be the solution to this right you just create more money and people have more money

00:15:06.940 to spend and it's all good and and we'll get there right venezuela tried it zimbabwe and many others

00:15:11.760 and it failed miserably but i guess maybe they feel that they're just super smart and able to figure

00:15:16.560 this one out where where others have failed and at the same it's what we call jamie it's what we call

00:15:21.780 moral hazard and i will i will make a criticism here of the central banks around the world including the

00:15:27.180 central bank in canada is that nobody knows how this ends it's all a big experiment and this represents

00:15:34.040 moral hazard for the canadian population we do not know how this is going to unwind at the end of

00:15:40.320 the day because it's never unwind every central entity that's uh entered into quantitative easing

00:15:46.080 has had no ability to exit it so effectively we're sitting with a much bigger balance sheet

00:15:50.920 of actual money that uh that is actually causing a problem in society and that problem of course is

00:15:55.940 much more debt not just the government level but we've created debt throughout society assets have

00:16:00.900 gone through the roof this is why house prices are worth 26 percent more now than they were before the

00:16:06.900 pandemic because all this money flooded in the system like we talked about 375 billion dollars

00:16:11.980 of government money going into the equation where's that going to go well very few like 20 billion

00:16:17.460 dollars i think people took care of their actual uh credit card debts but most of it ended up in

00:16:22.680 assets so people with assets had an escalating asset price you know people without assets are poor

00:16:29.220 we're creating a huge division in society the warning i would give people from a financial

00:16:34.180 perspective is what goes up usually comes down yes so something's gone up 26 percent in one year

00:16:40.460 you can expect what we call reversion to the mean that means average and recognize the cost of real

00:16:46.560 estate or the price of real estate historically goes up by about two to three percent a year so 26 percent

00:16:52.400 in one year is a vast anomaly oh i couldn't agree with you more and and just to build on what you said

00:16:59.080 earlier about what the government is spending on not all of it is is supports for businesses and

00:17:04.520 individuals they they have created a whole slew of programs couched in the language of covid that

00:17:09.520 actually had nothing to do with covid or the recovery and i think that's the problem we have

00:17:14.040 with a lot of this it's it's as we started off the show they are rewarding their friends and punishing

00:17:19.760 their enemies piling on the debt and putting it on to future generations or some other government to

00:17:25.620 clean up yeah what's the stat i saw and i think of the 450 to 500 billion dollars they've issued so

00:17:32.140 far just over 100 billion dollars of that has been for covid programming for employment now that might

00:17:37.620 be that number might be adjusted a little as we go forward here the rest of it is all kinds of what's

00:17:42.000 our favorite program we can we can actually throw money at here most governments in canadian history

00:17:46.840 have had to make their choices what do we fund here money coming in money going out and a lot of

00:17:51.820 governments of course have funded it with deficit financing that is borrowing from the future

00:17:55.820 generation in order to pay today's bills and they justify it by saying well we're building something

00:18:00.480 better for the next generation how do you justify that now when we're saying looking two generations

00:18:05.900 out and saying your taxes are going to have to pay the bills of this generation there are people 0.65

00:18:12.260 that aren't even born yet that are going to be paying taxes to pay the interest on the debt that

00:18:18.680 we've accumulated during this last period but the demand for services does not go anywhere

00:18:22.980 no we're going to need services people are going to have to every generation has their own

00:18:27.820 problems they're going to have to solve so you know whatever happens 10 years from now of course is going

00:18:32.940 to require some government intervention and i know the parliamentary budget officer and i had this

00:18:37.200 analysis when he gave his whole debt to gdp analysis and you take a look at every 10 years or so

00:18:43.420 governments have to step in there and commit a whole bunch of money to solve a problem

00:18:46.840 now the problem with you know ongoing keynesianism if you will is that keynesianism is supposed to be

00:18:53.220 about filling in when when times are bad and then getting out when times are good governments usually

00:18:58.560 forget the second half of that because they want they want to take away the cookie bowl well you know

00:19:03.520 what you have to and now you got fiscal keynesianism on top of you know modern monetary theory uh

00:19:10.620 quantitative easing just printing money so you've got it at two ends here and eventually people are going

00:19:16.240 to see this is over levered and there's no value in the money anymore so just quickly going back to

00:19:22.900 the oil and gas sector and and what is the what do you after what we just talked about what they've

00:19:27.840 done in the last six years what's what's to come based on who's the minister of natural resources

00:19:32.960 environment uh what what are people in the industry saying now they're they're looking at this they must

00:19:38.500 they must have a few thoughts i'm sure that you maybe publicly yeah well you know i had a i had a good

00:19:44.620 meeting with an advisory group that i have in calgary and this was yesterday morning before

00:19:48.760 the announcement but we had some tilting of what we thought the the two uh the two ministers that

00:19:54.340 were speaking about what their point would be and uh and i told them look as in my opinion having been

00:19:59.740 in parliament for two years this is bad news this is bad news for the industry this means that they are

00:20:04.960 going whole hog into a narrative that says we're we're the world's most virtuous country and you know

00:20:12.020 we're going to commit to this and commit to that all of which is going to be detrimental to the world

00:20:16.180 and to canadians and i say that because canadian solutions for energy production are still the best

00:20:22.500 in the world the minute we step out of that we yield the game to other foreign producers and those 1.00

00:20:29.620 foreign producers have nowhere near the environmental accountability that canadian companies have the

00:20:35.500 canadian regulatory regime usually provincial is very strict on what it allows its energy companies

00:20:41.880 to do and it requires reporting it requires remediation reclamation it is robust here compared

00:20:48.740 to everywhere else in the world and i know that personally because i've actually done business

00:20:52.720 in other countries and i've seen what their practices are on environmental remediation so we do

00:20:58.120 lead the world we need to continue to lead the world you look at how much difference we've made

00:21:02.560 in reducing our carbon footprint on oil and gas production in canada over the last

00:21:08.120 six to ten years it is monumental compared to everywhere else in the world so think about

00:21:14.620 how seriously we as a country we as the energy industry in canada take that and you will recognize

00:21:20.640 that there are other parties in the world that do not take it that seriously and think about who's

00:21:24.900 going to fill the void that we create by not being the energy secure supplier for the world

00:21:31.380 that is very well said uh we have gone a bit over time but i do appreciate i could keep asking you

00:21:37.780 questions over and over again this this is great we'll have to have you on again to to continue this

00:21:42.260 but as you know i always give the the guests the the final word here um is there anything else you

00:21:47.940 want to add to your your comments already well i'm looking forward to be back in part of it with

00:21:52.180 you jamie uh make sure we get some good government here in canada so we can hold this government

00:21:57.260 their feet to the fire they've avoided us in parliament for a year and a half now you know that

00:22:01.240 they one liberal shows up at a time in the house of commons well we've got as many as we can in the

00:22:06.340 covid type parliament showing up trying to get answers from the government i want to make sure

00:22:10.660 the media gets there as well to see what these answers are canadians deserve real answers and real

00:22:16.120 transparency from their government that's our job right now is the opposition i'm hoping that they

00:22:20.260 see it the same way that we see it uh and eventually this becomes illustrated becomes more

00:22:24.380 transparent to them about the folly of the direction this current government is taking

00:22:28.580 and we've also got cop 26 coming up here in the next couple weeks we need a canadian position there

00:22:33.720 that actually makes sense for canada and makes sense for the world's environment let's get this

00:22:38.060 moving forward thanks jerry with you more greg mcclain member of parliament for calgary center he's

00:22:43.140 also the national natural resources clinic of record i love talking to this guy about finance about

00:22:48.440 the oil and gas industry he's a wealth of knowledge appreciate your service not only to your

00:22:52.520 riding but the the country as well and your your passion for the industry we will have you on again

00:22:57.540 and talk more thank you jamie as i mentioned new content every single tuesday 1 30 p.m eastern time

00:23:03.680 we ask that you like comment subscribe share this program help us push back against the ever-moving

00:23:08.440 liberal agenda of course if you can't watch or listen to this whole program right this second

00:23:12.360 download it listen to it later on and platforms like cast box itunes google play spotify you name it

00:23:17.280 it is out there as always remember low taxes less government more freedom that's the blue place

00:23:23.340 you

The Blueprint: Canada's Conservative Podcast - November 02, 2021

The Impact of Inflation on Oil and Gas

Episode Stats

Summary

Transcript