I grew up in Fort McMurray , Alta., long before it became a political talking point. It was home and the spirit of community was everywhere: we’d celebrate the Blueberry Festival in the fall, spend the long summer days at Gregoire Lake and freeze our butts off during the Winter Carnival. It was a place where hard work, entrepreneurship, community and opportunity were not abstract concepts, but daily realities. In the late 1970s and early 1980s, my family owned a go-kart track in an energy-fuelled, but entertainment-starved town. In the winters, we did whatever it took to survive — delivering milk and cutting birch for firewood. It was hard, honest work and great until Pierre Trudeau’s National Energy Program devastated Alberta’s economy and the oil and gas industry. Those experiences shaped my view of business. Put simply, entrepreneurial activity matters. It creates opportunity, supports families and contributes to the economic output that ultimately funds the public services that Canadians rely on. That was true in Fort McMurray decades ago and remains true today on a much larger scale through the expanded oilsands . That’s why debates about the oilsands — often detached from economic reality — are frustrating. Recently, Conservative Leader Pierre Poilievre appeared on Joe Rogan’s podcast and defended Canada’s oilsands against the now-familiar claim that they are environmentally irresponsible. He pushed back against a narrative shaped for years by non-governmental organizations, activists and some celebrities who offer ill-informed, but dramatic commentary. For example, after a 2017 flyover of the oilsands, Jane Fonda remarked that the open-pit mines made her feel like her “skin was being peeled off.” Neil Young has made similar shallow comparisons. These comments generate headlines, but do not advance understanding. They conveniently ignore that those in the oilsands take great care in protecting the environment — which has significantly improved over time — and that it is among the most responsibly produced oil in the world. More importantly, activists conveniently ignore a basic economic reality: global demand for oil persists and that is highlighted during times of global strife like the current Iran conflict. The question is not whether oil is produced, but where. Lost in much of this rhetoric is the economic importance of the oilsands and the broader energy sector. In 2024, Canada’s oil and gas industry employed approximately 900,000 people and contributed more than $8 billion in taxes (plus tens of billions of dollars in royalties) to the federal and provincial governments and represented approximately 7.8 per cent of Canada’s nominal gross domestic product (GDP). Canada also has the world’s fourth-largest proven oil reserves, with 97 per cent of those reserves being in the oilsands. These are jobs, income, businesses and government revenues that benefit Canadians from coast to coast to coast. A report released last week said increasing Canada’s pipeline capacity could have a significant upward impact on GDP. In other breaking news, water is still wet. But, seriously, market access is critical. The recent memorandum of understanding between Alberta and the federal government regarding pipeline expansion is a welcome step — and clearly in the national interest for all Canadians — but time will tell if the federal government is indeed serious. Despite the constant rhetoric and ill-informed attacks, Fort McMurray has demonstrated what resilience looks like. The devastating wildfires of 2016 forced the evacuation of the entire city and ultimately became the costliest natural disaster in Canadian history. Yet the community rebuilt quickly. That kind of resilience reflects a culture rooted in hard work, entrepreneurship and an understanding that economic activity truly matters. From a tax perspective , opponents of the oil and gas industry often claim that the sector receives subsidies that should be stopped. That is a convenient misunderstanding of how Canada’s tax system works. The commonly cited provisions — Canadian Exploration Expense, Canadian Development Expense and Canadian Oil and Gas Property Expense — are not government handouts. To benefit from these deductions, companies must first incur cash outlays on qualifying activities such as exploration, development or property acquisition. The tax rules then allow these companies to recover portions of their costs through calculated deductions. To be clear, these deductions do not exempt companies from paying tax on their profits; they are simply timing differences, not transfers of government funds. The ability to deduct legitimate business expenses is not unique to the oil and gas industry; it is a fundamental principle of the Canadian tax system that applies to all businesses: they must be incurred for the purpose of gaining or producing income, must be reasonable in the circumstances and not be personal or capital in nature. Singling out oil and gas companies for criticism is a selective narrative, not a principled tax policy argument. Tax policy shapes behaviour in very real ways. Governments introducing uncertainty, complexity or targeted hostility are met by investors quietly delaying decisions or moving capital elsewhere. One example is the layering of an industrial carbon tax on top of an already high-cost, highly regulated industry. Oil is a globally traded commodity priced on global supply and demand, not on the carbon intensity of a particular barrel. Is there a premium market for decarbonized oil? No. The resulting risks are predictable: higher costs, reduced competitiveness and a shifting of investments to other jurisdictions. Canada has an opportunity to produce energy responsibly, supported by sound tax policy, efficient infrastructure and a competitive investment environment. That approach recognizes a simple truth: economic prosperity is not an obstacle to progress; it makes progress possible. In the meantime, I’ll be tracking the twists and turns of tax and economic policy and fine-tuning my go-kart driving skills at the nearest track, where performance still matters more than politics. Kim Moody, FCPA, FCA, TEP, is the founder of Moodys Tax/Moodys Private Client, a former chair of the Canadian Tax Foundation, former chair of the Society of Estate Practitioners (Canada) and has held many other leadership positions in the Canadian tax community. He can be reached at kgcm@kimgcmoody.com and his LinkedIn profile is https://www.linkedin.com/in/kimgcmoody. _____________________________________________________________ If you like this story, sign up for the FP Investor Newsletter. _____________________________________________________________ Canada would do well to follow St. Patrick's lead when it comes to taxationJust like a Dad tax, government taxation can inspire behaviour changes — both good and bad