|
Do you think the Canadian provinces have a fractious relationship with the
federal government under “sunny ways” Prime Minister Justin Trudeau? Well
there’s a new party that just grabbed power in Alberta, looking to amp up the
fight over the country’s oil and gas resources. And
it ain’t gonna be pretty.
On Tuesday night Jason Kenney’s
United Conservative Party won a decisive victory over the Alberta NDP, in
what most people see as a return to the province’s natural governing party
after four years of experimentation with the NDP.
The UCP bashed the NDP 63 seats to
24, and also captured a clear majority of the popular vote (54.8% versus
32.1%), which doesn’t often happen in our first-past-the-post system.
“Today our province has sent a message to Canada and the world,” a fired-up
Kenney declared at UCP headquarters in Calgary. “Alberta is open for
business.”
The former federal Cabinet minister
under Harper’s Conservatives vowed to defend Alberta’s suffering oil and gas
sector and said the world needs more Canadian energy.
“Today with this election, we begin
to stand up for ourselves, for our jobs and for our future. Today we begin to
fight back.”
Kenney became leader of the United
Conservative Party in 2017, after the Wildrose Party, another right-leaning
party, merged with the Kenney-led Progressive Conservative Party. The PCs
were trounced in the 2015 election by the NDP, ending 44 years of unbroken PC
rule in Alberta. The merger of the two right-wing parties was an attempt to
“unite the right” to defeat the NDP government of Rachel Notley.
During the campaign Kenney lashed
out at the NDP for mismanaging the Alberta economy in the aftermath of the
2014 oil price crash which hit the Alberta oil patch hard with thousands of
job losses. He vowed to kill the 30% Alberta carbon tax if elected and
restore fiscal conservatism to the province which has always been pro
free-enterprise, by lowering taxes and cutting “red tape” regulations. His
new government would focus on building pipelines, an endeavor Notley’s
government failed to accomplish.
Kenney
also promised to push back against anti-pipeline funding sources such as
Tides Canada, backed by billionaire US philanthropists, and the federal
government which refused to sanction Enbridge’s Northern Gateway pipeline
project, and dragged its feet so much on Trans Canada’s Energy East that the
company eventually gave up on the proposed pipeline between Alberta oilfields
and Eastern Canadian refineries. Opposition to it in Quebec didn’t help
either.
Canadian politics is usually pretty
boring compared to the action down south, but things are about to get a whole
lot more interesting with Kenney at the helm of Alberta’s oil tanker ship of
state. This article explains the combatants and what’s at stake.
Jason vs Justin
Rachel Notley believed that talking
with the federal government was the best way to achieve Alberta’s best
interests. That meant prodding the prime minister to do more to ensure the
Trans Mountain pipeline gets built, especially after Kinder Morgan gave up on
the project amid environmental, BC politician and First Nations opposition,
and the feds bought it for $4.5 billion.
Pipelines are seen as the key to unlocking the crisis that has gripped
Alberta since 2014 when the oil price abruptly plunged, putting many
Albertans on the dole. They would relieve the glut of Canadian oilsands crude
that is keeping the price suppressed.
Trudeau unsurprisingly talks a good
game but has done nothing to help Alberta. Nearly a year after the
government’s purchase of Trans Mountain, there are no shovels in the ground.
A promised law asserting Ottawa’s constitutional authority over pipeline
construction came to nought.
Meanwhile Trudeau slapped an oil tanker ban in northern BC - the closest
coast to tidewater - and embraced
LNG in British Columbia - even giving $275 million to the LNG
Canada consortium that is building the $40-billion liquefied natural gas
compressor plant and pipeline to move gas between northeastern BC and
Kitimat.
Kenney’s UCP is going to be a lot
more demanding of Trudeau’s Liberals - the election of which is probably the
worst thing that could have happened to Justin Trudeau, coming
straight after SNC Lavalin, in an election year. Alberta has just become
the third major province in Canada, within the past year, to elect a
conservative government that opposes Trudeau’s liberal vision for the country.
The first battle will likely be over
the carbon tax. Trudeau showed his boxing prowess against a Conservative
senator. His fighting spirit will definitely be tested against Kenney.
Presuming Kenney follows through and scraps the $30 a tonne carbon tax,
Trudeau will try to force a federal carbon tax on Alberta, just like he is
doing with Saskatchewan, Manitoba, Ontario and New Brunswick.
This seems like a punishment to
Alberta but it will actually turn out as a win. The federal tax is $20 a
tonne, meaning Albertans will save $10/t. Jason 1, Justin nil.
Kenney has said he will take Ottawa
to court if Trudeau tries to impose a federal carbon tax on Alberta.
Speaking of taxes, the UCP campaign
platform promises to cut the amount of federal income tax charged to
Albertans, and to reform the EI system to help Albertans who lost their jobs
during the oil market downturn. More provocatively, the UCP is promising a
2021 referendum on equalization payments, thereby putting it in the hands of
Alberta voters to decide whether or not the so-called “have” provinces should
give money to “have-not” provinces.
A win would give the Alberta
government a bargaining chip to use when pressing Ottawa for more pipelines.
Finally, Kenney said he’ll challenge
Bill C-69, the federal legislation that would change, and not in a good way
for industry, how energy and mining projects are reviewed.
Bill C-69 has been passed by the House of Commons and is currently under
review by the Senate. If promulgated into law, the old Environmental
Assessment Act would be turfed and the new one called the Impact Assessment
Act.
In summary, Bill C-69 broadens the
scope of the assessment process and adds more consultation with the public
and particularly indigenous groups.
Read more at How the
road to a mining ‘yes’ is littered with obstacles in Canada
CBC
quotes McGill University political scientist
Daniel Béland saying he expects a lot more friction and
confrontation now, between Edmonton and Ottawa:
“Jason Kenney has a much more
controversial relationship to intergovernmental relations,” said Béland.
“He’s very forceful and adversarial to the Trudeau government.”
As Canadians, we’re used to this
kind of thing. Premiers vs prime ministers is almost as good as
Hockey Night in Canada. Remember Peter Lougheed locking horns with Pierre
Trudeau? Even better, chain-smoking Quebec separatist Rene Levesque reeling
off a litany of insults against his federalist arch-nemesis?
Doug Ford and the fabulous 4
In this respect, Jason Kenney has
allies. Since the Trudeau Liberals were elected in 2015 the political
landscape has shifted. We now have conservative governments in Saskatchewan,
Manitoba, Ontario and New Brunswick.
What all of these governments have
in common is a disdain for the federal carbon tax. When Trudeau and his
Cabinet first conceived of the carbon tax, they saw that some provinces, like
BC and Quebec, already had such a tax. The plan was to give the other
provinces a couple of years to implement their own. Those that didn’t, would
have a 20% federal carbon tax imposed on them.
The four provinces above balked and
vowed to take Ottawa to court over its right to impose such a tax. Ontario is
currently before the Ontario Court of Appeal challenging the
constitutionality of the federal plan.
Its bombastic Premier Doug Ford,
brother of the late former Toronto mayor, Rob Ford, was obviously thrilled to
see Kenney win power in Alberta.
“Ontario has another strong partner
that will fight for Canadian families against the job-killing federal carbon
tax!” he said Tuesday night, followed on Wednesday by this remark in the
Ontario legislature:
“What a great ally to join the
anti-carbon alliance. I’ll tell you, he’s going to be there, shoulder to
shoulder, for everyone in the country. We see just a blue wave going across
this country from west to east.”
Kenney’s Conservatives
Other than wanting to pick fights
with Ottawa, what else does the UCP stand for?
Before the election, the UCP reached
out to a surprisingly large segment of the Alberta population who would
prefer to stick it to Ottawa for good. This is good ol’ Western
separatism, coming back to haunt Alberta.
The party put out a press release
referencing a poll finding that “a shocking 50 per cent of Albertans surveyed
said they support secession from Canada.”
Global
News quotes Kenney in the same news release saying that “most
Albertans are proud Canadians, but they will no longer tolerate the rest the
country benefiting from the province’s resources while trying to hold back
its economy.”
Those old enough to remember will
recall hearing a similar storyline coming from the likes of former Alberta
Premier Lougheed and Reform Party founder Preston Manning. Both leaders had a
beef with the central government imposing its will on the provinces,
particularly Alberta, the center of the country’s oil wealth. Pierre
Trudeau’s National Energy Plan was one of the most egregious pieces of
legislation from an Alberta point of view. It helped sow the seeds of western
separatism.
The Reform Party first started as a
Western Canada-based protest movement against the Progressive Conservative
government led by then-PM Brian Mulroney. Grounded in social conservatism,
Reform would go on to supplant the PCs as the largest party in Western Canada
after the 1993 election, before being succeeded by the Canadian Alliance in
2000. That party joined forces with the Progressive Conservative Party in
2003, becoming the current Conservative Party of Canada.
Could the Kenney-led UCP lead Alberta out of confederation? It’s unlikely.
This National
Post article explains why separating from Canada would be a very bad
idea for Alberta.
Closer to reality, clearly the party
will do everything it can to put the oil industry back in the driver seat.
In his victory speech Tuesday night Kenney said he would attack
“foreign-funded special interests” which he accused of leading “a campaign of
economic sabotage” against Alberta, CBC
reported on the premier-in waiting.
He would also create a $30-million
“war-room” to counter anti-oil industry campaigns, and investigate their
sources of funding.
“Your days of pushing around
Albertans with impunity just ended. We Albertans are patient and we’re
fair-minded, but we’ve had enough of your campaign of defamation and double
standards,” Kenney told cheering supporters.
For more read our Follow
the big money behind Canadian pipeline protests
The oil patch
Rachel Notley’s NDP faced a big
challenge when it arrived on the scene in 2015, just after oil prices fell
off a cliff. On the one hand the NDP had to appeal to its green wing by doing
something to curb the growth of oilsands emissions, while on the other hand
needing to support the oil industry which had just been dealt the equivalent
of a heavy punch to the stomach.
The government’s solution was to
impose a 30% carbon tax directed mostly at energy companies, and to support
Kinder Morgan’s Trans Mountain pipeline expansion project. The latter showed
synergy with the federal government which, in a similar balancing act,
dropped the Northern Gateway pipeline and introduced a national carbon tax -
thus appealing to left-wingers and moderates - and as a quid pro quo, offered
its support for Kinder Morgan’s Trans Mountain, aka TMX.
Neither went very well for the NDP.
The carbon tax has cost oil companies operating in Alberta $400 million a
year since 2017, at a time when they could least afford it. Crude prices have
come up, but not before Canadian firms were forced to curb spending and slash
workforces. Foreign energy companies including Shell and Marathon Oil pulled
out of the oilsands in favor of lower-cost jurisdictions.
As
BNN Bloomberg notes, Kenney is counting on a pipeline to revive the
beleaguered sector, which accounts for 10% of Canada’s economy and 20% of its
exports, in a province that produces 80% of the country’s oil. Its 3.7
million barrels a day is around the same output as the United Arab Emirates.
 
Kenney’s UCP will also roll back the
carbon tax, putting C$1.4 billion into the pockets of industry and consumers.
Instead, the party’s idea is to require large emitters to reduce carbon
intensity by 10%, by credits from other facilities, or pay into a fund for
developing emissions-reducing technologies, BNN Bloomberg reported.
He’s threatened to do businesses
with banks that boycott energy projects and would “turn off the taps” to provinces
that fight pipeline construction. The latter obviously targets BC, where the
NDP government under Premier John Horgan tried, and succeeded, in putting the
kibosh on the Trans Mountain pipeline.
From an industry perspective, it’s
hard not to like Kenney and his pro-oil party.
But if his government follows
through on everything they say they are going to do, in dismantling the NDP’s
four-year legacy, they and their energy industry friends will face pushback,
for sure.
Environmental groups
The silent victim from pro-oil policies pursued by the Kenney government
will be the environment. The
Narwhal presents a good summary of what four years of a Conservative
government in Alberta could mean.
Approvals of energy projects are
expected to be accelerated and the UCP took a page out of Trump’s book by
proposing a “one in one out” rule ie. for every new regulation
that is created, another should be eliminated. Red tape will be especially
cut at the Alberta Energy Regulator.
Alberta’s former NDP government
committed to 30% of electricity from renewable sources by 2030. No such
promise was made by the UCP. Its carbon-reduction plan will go towards “Alberta-based
technologies that reduce carbon emissions” that is expected to focus on
carbon capture and new oilsands extraction technology.
A 100-megatonnes cap on total
oilsands emissions, from the current 70 megatonnes, is expected to be
scrapped.
According to The Narwhal, which
obtained documentation through an FOI (freedom of information) request, the
Alberta Energy Regulator is predicting that the number of inactive wells in
the province will double in the next 10 years - meaning 180,000 wells by 2030
compared to 30,000 in 1999. The wells should either be plugged or cleaned;
Narwhal reports the cost of cleaning them has been pegged at $100 billion.
First Nations
And last but not least on the list
of groups that will want to lay the boots to Kenney and the UCP, if they
follow through on pro-oil industry promises, is First Nations.
Alberta’s
Athabasca Chipewyan is one of several indigenous groups that have
intervenor status at the above-mentioned court case being heard at the
Ontario Court of Appeal.
A lawyer representing the Athabasca Chipewyan told the court on
Wednesday that the nation’s way of life will be adversely affected by climate
change.
“You destroy the ecology, you destroy the way of living of Aboriginal
people, and you destroy them as a culture,” said Ottawa lawyer Amir
Attaran, as
reported by CBC. “To them, climate change is an existential threat.”
Attaran said the federal government
needs to tackle climate change in order to protect Canada’s indigenous
peoples from unchecked global warming. He noted that temperatures in the far
north are predicted by scientists to rise seven degrees in one generation.
Attaran also told the court that
Ottawa’s carbon tax “helps defend First Nations’ constitutional rights to
hunt and fish on which their very survival depends,” CBC wrote.
Conclusion
The next few months are going to be
very interesting in Alberta. If you thought the SNC Lavalin affair was the
best thing since Rob Ford, you ain’t seen nuthin’ yet. I can’t
wait for the fists to fly between Jason Kenney and Justin Trudeau,
metaphorically speaking. And all the other groups that Kenney is likely to
infuriate over the next four years as the Alberta NDP’s legacy is destroyed.
So pick a good seat and enjoy this
battle royale - it’s bound to be entertaining.
Legal Notice / Disclaimer
This document is not and should not be construed as an offer to sell or
the solicitation of an offer to purchase or subscribe for any investment.
Richard Mills has based this document on information obtained from sources he
believes to be reliable but which has not been independently verified.
Richard Mills makes no guarantee, representation or warranty and accepts no
responsibility or liability as
to its accuracy or completeness. Expressions of opinion are those of
Richard Mills only and are subject to change without notice. Richard Mills
assumes no warranty, liability or guarantee for the current relevance,
correctness or completeness of any information provided within this Report
and will not be held liable for the consequence of reliance upon any opinion
or statement contained herein or any omission. Furthermore, I, Richard Mills,
assume no liability for any direct or indirect loss or damage or, in
particular, for lost profit, which you may incur as a result of the use and
existence of the information provided within this Report.
|
