The world will soon be divided into oil-producing countries and oil-importing countries.
Those with oil and gas will be able to balance budgets and cushion the blow from the energy shock. Those without will be reeling.
National Bank is out with some estimates of the Canadian windfall from high energy prices today and it's illuminating. In 2021, Canadian oil companies paid $15 billion to the government in royalties. In March, the estimate from National moved up to $34 billion. Since then it's climbed to $44 billion.
To put that into perspective, the entire federal deficit estimate for the 2022-23 fiscal year is $52.8 billion and in 'normal' times, $10-$20 billion was a large deficit.
The flipside of all this is that as government bond yields rise globally, the debt burden becomes far less sustainable.
