This article supplied by Troy Media.

By Rashid Husain Syed

OPEC+ output hike could sink prices, blow an even bigger hole in Alberta’s budget and drag Canada’s economy down with it

OPEC and its allies are flooding the global oil market again, betting that regaining lost market share is worth the risk of triggering a price collapse.

On Sept. 7, eight of its leading members agreed to boost production by 137,000 barrels per day beginning in October. That move, taken more than a year ahead of schedule, marks the start of a second major unwind of previous output cuts, even as warnings of a supply glut grow. OPEC+, a coalition led by Saudi Arabia and Russia, coordinates oil production targets in an effort to influence global pricing.

This isn’t oil politics in a vacuum. It’s a direct blow to Alberta’s finances, and a growing threat to Canada’s economic stability.

Canada’s broader economy depends heavily on a strong oil and gas sector, but no province is more directly reliant on resource royalties than Alberta, where oil revenues fund everything from hospitals to schools.

The province is already forecasting a $6.5-billion deficit by spring. A further slide in oil prices would deepen that gap, threatening everything from vital programs to jobs. Every drop in the benchmark West Texas Intermediate price, currently averaging around US$64, is estimated to wipe out another $750 million in annual revenue.

When Alberta’s finances falter, the ripple effects spread across the country. Equalization transfers from Ottawa to have-not provinces decline. Private investment dries up. Energy-sector jobs vanish not just in Alberta, but in supplier and service industries nationwide. Even the Canadian dollar takes a hit, reflecting reduced confidence in one of the country’s key economic engines. When Alberta stumbles, Canada’s broader economic momentum slows with it.

The timing couldn’t be crueller. October marks the end of the summer driving season, typically a lull for fuel demand. Yet extra supply is about to hit a market already leaning bearish. Oil prices have dropped roughly 15 per cent this year; Brent crude is treading just above US$65, still well beneath April’s lows.

But OPEC+ isn’t alone in raising the taps. Non-OPEC producers in Brazil, Canada, Guyana and Norway are all increasing production. The International Energy Agency warns global supply could exceed demand by as much as 500,000 barrels per day.

The market is bracing for a sustained price war. Alberta is staring down the barrel.

OPEC+ claims it’s playing the long game to reclaim market share. But gambling on long-term gains at the cost of short-term pain is reckless, especially for Alberta. The province faces immediate financial consequences: revenue losses, tougher budget decisions and diminished policy flexibility.

To make matters worse, U.S. forecasts are underwhelming, with an unexpected 2.4-million-barrel build in inventories. U.S. production remains at record highs above 13.5 million barrels per day, and refinery margins are shrinking. The signal is clear: demand isn’t coming back fast enough to absorb growing supply.

OPEC+ may think it’s posturing strategically. But for Canada, starting with Alberta, the fallout is real and immediate. It’s not just a market turn. It’s a warning blast. And the consequences? Jobs lost, public services cut and fiscal strain for months ahead.

Canada can’t direct OPEC. But it can brace for the fallout—and plan accordingly.

Toronto-based Rashid Husain Syed is a highly regarded analyst specializing in energy and politics, particularly in the Middle East. In addition to his contributions to local and international newspapers, Rashid frequently lends his expertise as a speaker at global conferences. Organizations such as the Department of Energy in Washington and the International Energy Agency in Paris have sought his insights on global energy matters.

Troy Media empowers Canadian community news outlets by providing independent, insightful analysis and commentary. Our mission is to support local media in helping Canadians stay informed and engaged by delivering reliable content that strengthens community connections and deepens understanding across the country

From the Fraser Institute

By Alex Whalen and Matthew D. Mitchell

In a nod to the importance of the energy industry, both the Liberals and Conservatives made promises in the recent election to cut red tape and speed the approval of major energy projects. To that end, the Carney government recently enacted Bill C-5, which gives the prime minister sweeping powers to override existing laws and regulations that might stand in the way of new projects.

While Prime Minister Carney, who continues to say he wants Canada to become an “energy superpower,” has properly diagnosed the problem (i.e. red tape in the approval process), but Bill C-5 is not the solution.

Let’s begin with the problem. In terms of living standards, despite its abundant natural resources and well-educated workforce, Canada has failed to keep up with its peer countries, in part because business investment has collapsed over the past decade due to bad policy including high regulatory burdens in the energy sector.

These regulatory burdens are steep because too many entities have the power to say no to new projects. It’s a tragedy of the anticommons. (The more familiar “tragedy of the commons” arises when too many people can access a commonly owned resource such as a fishery or a forest. Too much access to common resources can lead to overexploitation.)

In contrast, a tragedy of the anticommons arises when too many people can stop others from accessing a resource such as a market. With too many people wielding veto power, resources may be underutilized.

Across Canada, a long list of natural resource projects remain stalled or cancelled. They include pipelines headed west and east, natural gas developments, export terminals and mining opportunities. Again, the problem is that too many groups can say no and scuttle any one project.

For example, the Energy East pipeline. The idea of a west-east pipeline rose to prominence in the early 2010s after the U.S. government put the Keystone XL pipeline on hold. Rather than selling oil at a discount to the Americans, the thought was that oil-producing western provinces could ship oil across the country by pipeline to refineries on the east coast, which are currently forced to import most of their oil from foreign countries due to a lack of pipeline and rail capacity in that part of Canada. But while a west-east pipeline seemed like a no-brainer, several opponents including First Nations and environmental groups urged the federal government and several provincial governments to kill the project. In the midst of this uncertainty, the TransCanada Corporation cancelled the project in 2017.

Fast-forward to today. As Trump’s trade war threatens Canada’s ability to rely on U.S. energy products including oil, the idea of reviving Energy East may be gaining steam. But proponents must first eliminate the tragedy of the anticommons that killed the project eight years ago.

Here’s how the tragedy unfolds. For starters, the project’s proponents must satisfy conditions of the Impact Assessment Agency of Canada, the federal government’s energy regulator, unless the government uses Bill C-5 to override those conditions. The last time around (under the former National Energy Board), the process was fraught with setbacks.

Second, assuming the project gets past the federal review, it may or may not need the approval of many Indigenous groups. While the Supreme Court has repeatedly said the “duty to consult” these groups does not give them a veto, leading scholars such as Tom Flanagan argue that the power conferred on these groups to delay and create uncertainty creates an effective veto. With Energy East set to cross the traditional territories of approximately 180 different Indigenous groups, any approval process requiring unanimity will kill the project. The Trudeau government’s decision to enshrine the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) into Canadian law in 2021 (and a later federal court decision to apply UNDRIP to the interpretation of Indigenous rights vis-a-vis the Charter of Rights and Freedoms) further complicate the matter.

Third, in addition to the official federal regulatory process and Indigenous consultation, provinces, municipalities and vocal environmental groups can each apply their own brakes.

Writing in the industry publication Energy Regulation Quarterly, researcher Ron Wallace summarized the situation: “When a federation dissolves into narrow definitions of federal, provincial and local government interests, the number of hands in the pot increases the complexity of issues for everyone… The result is a complex, often contradictory and competing web of legislative and regulatory tools whose resolution cannot reasonably be achieved by continuous references to federal courts.”

In a free and democratic society, each of these stakeholders has the right to voice their concerns. But to the extent that these voices become vetoes, they represent an impossible burden for any project to overcome.

Unfortunately, Bill C-5 doesn’t address this problem. Instead of eliminating all veto points, it allows the prime minister to pick and choose which veto points to override and which to enforce. This level of unilateral power courts favouritism and corruption.

If Canada is to truly become an energy superpower it must solve the tragedy of the anticommons. And to do that, it must eliminate all overlapping veto points for all projects. This will be a massive task requiring stern political will. But Canada’s future relies on its ability to produce and transport its own energy.

Alex Whalen

Director, Atlantic Canada Prosperity, Fraser Institute

Matthew D. Mitchell

Senior Fellow in the Centre for Human Freedom, Fraser Institute