How Big Is Canada's Oil Subsidy To The U.S.?

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The discount prices paid on unrefined Canadian oil amounts to a subsidy of the U.S. oil industry, says Jeff Rubin. (Shutterstock photo) | Shutterstock

Do the math on some 2 million barrels a day of heavily discounted oil exports and suddenly you’re talking about an enormous wealth transfer from Canadian oil producers to American refineries. (Note, the subsidy is pocketed by U.S. refiners, not motorists, who don’t see the Canadian discount when filling up at the pumps.) What if Canadian oil was getting world prices? At the current Brent-Western Canadian Select spread of roughly $50 a barrel, you’re in the neighbourhood of $100-million a day. That equates to foregone revenues of more than $35-billion over the course of a year.

Read the whole story at The Globe and Mail