Prime Minister Justin Trudeau is in Alberta this week to take stock of the devastation wrought by the collapse in oil prices.
Trudeau’s rebranding of Canada offers sunshine to Davos, but it’s cold comfort for battered oilpatch
Like it or not, he will also get an earful over the spate of anti-energy moves made by his government that will make a recovery harder.
Indeed, despite declaring in Calgary in the final days of his election campaign last October that “Alberta matters deeply to me,” his policy choices so far have shown the opposite.
They include: Formalizing a moratorium on oil tanker traffic on the northern B.C. coast that handcuffs the already-permitted Northern Gateway pipeline; additional regulatory requirements for the proposed TransMountain pipeline expansion and the Energy East pipeline conversion that lengthen and duplicate already-unwieldy regulatory processes; reforms to the National Energy Board that shake confidence in Canada’s ability to get anything built; and a climate change test on export pipelines that gives Ottawa new powers over Alberta’s energy resources.
We know Canada’s economic engine is limping, and the fact that he is here is a clear indication that he understands the federal government cannot be in the sidelines.
Trudeau pushed through the changes to gain ‘social licence’ for pipelines after no progress was made under the Conservatives. The result so far is that they have empowered opposition and fuelled anger and division, making solutions even more difficult to achieve.
Still, there is appreciation for the visit, which at the very least shows good intentions so early in his mandate.
“It’s very clear to me, based on everything I see in the public domain, the Prime Minister appreciates the seriousness of the situation,” said Asim Ghosh, president and CEO of integrated oil company Husky Energy Inc. “We know Canada’s economic engine is limping, and the fact that he is here is a clear indication that he understands the federal government cannot be in the sidelines.”
Trudeau could help by providing timely review of pipelines, suggested Ghosh, whose company is a large heavy oil and oilsands producer in Western Canada, and also by being mindful of Canada’s competitiveness when boosting environmental requirements.
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“We have a situation where our biggest customer has now turned itself into our biggest competitor,” he said, referring to the United States. “Last time I checked, their oil production was up 75 per cent in the last six years. Now more than ever we have to tap into Canadian resourcefulness to attract the investment that will revive activity and protect jobs in the natural resource sector.”
Meanwhile, Alberta in the humiliating position of having to ask Trudeau for federal aid.
Alberta has done “a lot of heavy lifting” for Canada for many years, and now it’s time for some payback from Ottawa, Alberta Premier Rachel Notley said ahead of meeting with Trudeau in Edmonton Wednesday. “Now is the time when we need our federal government to come here and to work with us, to support us during the difficult times that we’re facing.”
During the two-day visit, discussions between Trudeau and the Alberta government were expected to focus on pipelines, job creation, economic diversification and federal infrastructure investment.
Trudeau was due to make a stop in Calgary on Thursday. Earlier in the week, he said he would meet with community and business leaders to talk about solutions to Alberta’s rising unemployment and that there would be “concrete measures” in the upcoming federal budget to will help Alberta, and that the government has promised accelerated infrastructure spending to help stimulate the economy.
What Albertans really want is to be able to take care of themselves by growing exports of oil and gas, getting fair prices, and no amount of economic diversification help or federal handouts will replace that.
Frustration with the pipeline gridlock is widespread, and so is talk of retaliation and of greater Alberta independence.
Glen Schmidt, president and CEO of Laricina Energy Corp., one of Alberta’s junior oilsands companies, said it’s time for Alberta to play hardball.
For example, Alberta should oppose BC Hydro’s Site C Dam on the Peace River because of its potential impact on water levels in Alberta’s Wood Buffalo National Park, he suggested.
“If B.C. feels pipelines do not provide benefits to them, Alberta too should legitimately object to the lack of benefits from Dam C,” Schmidt said.
“Alberta can’t be naïve in a world of self-interest. Ontario sees pension reform as moving too slowly, it goes its own way. B.C. re-writes the rules on inter-provincial pipelines. Alberta cannot concede to a national regulator if our interests are not respected, so we go our own way.”
It’s not idle talk, and Trudeau needs to deliver on his pipeline promises — or he’ll have a bigger problem than ‘social license’ in his hands.