Trudeau doing little for our ailing resource sector
In a speech in Davos this week, Prime Minister Justin Trudeau distanced Canada from its natural resource economy (i.e. oil and gas), and instead played up its economic diversity and its technology brainpower as part of his efforts to “rebrand” the country.
“My predecessor wanted you to know Canada for its resources,” Trudeau said in his keynote address at the World Economic Forum in the Swiss Alps. “Well I want you to know Canada for its resourcefulness. Our natural resources are substantial and they will always be a basis of the Canadian economy, but Canadians also know … that growth and prosperity is not just a matter of what lies under our feet, but what lies between our ears.”
Trudeau’s “Sunny Ways” marketing may have amused the Davos elites, but it’s cold comfort to the estimated 100,000 people back home who lost their oil- and gas-related jobs over the past year, or their homes and businesses, or their life savings.
For the legions of scientists who work in the energy sector, it’s downright insulting.
Trudeau should re-acquaint himself with the never-more-relevant quote by petroleum geologist Wallace E. Pratt that oil “is first found in the minds of men.”
Meanwhile, the prime minister is showing little resourcefulness of his own.
Rather than doing what’s in his power to improve market access for oil, which would alleviate the pain felt in Alberta and Saskatchewan from the oil price collapse, Trudeau’s solution is to marginalize the energy sector and look elsewhere. Surprisingly, in private meetings in Davos with Leonardo DiCaprio, Trudeau warned the actor and anti-oil activist from making uninformed statements about the oilsands, as if his continuing disinterest in their collapse is any better.
Calgary Mayor Naheed Nenshi, also in Davos, appropriately disagreed with Trudeau and suggested Canada should be marketed as “resource-plus.”
TRUDEAU MUST REJECT ANTI-PIPELINE POLITICS
“We are a resource economy. Our biggest export is still energy and I do not see a path where that does not continue to be the case, so clearly we need to do what we can on market access,” Nenshi said, noting it was “being discussed in every corner in this place.”
“The two most likely pipeline projects are both entirely in Canada — Trans Mountain and Energy East — and Energy East in particular supplies Alberta energy to the rest of Canada,” he said.
“So, yes, social licence is required within our own country, but we also need to see action from this federal government about what’s happening in Canada and I look forward to that happening.”
Trudeau’s remedy so far has been old government thinking — $1 billion in federal cash for infrastructure projects for Alberta and Saskatchewan. (But the Liberals said Thursday that the money won’t start flowing until after the federal budget is passed.)
Next to the oil and gas investment yanked in the past year alone, Trudeau’s offering barely makes a dent. A single company, Husky Energy Inc., cut almost that much this week, when it announced it would reduce spending by $800 million in Western Canada this year.
Trudeau can start to revive enthusiasm for Canada’s battered oil economy by confirming he is still keen to get export pipelines built, ending an almost decade-long paralysis.
Lack of market access is half the reason the Canadian energy sector is being hammered so badly in the oil collapse, why investment is being cut so drastically, why investors are staying on the sidelines. A $10 discount on Canada’s oil because of transportation constraints hurts a lot more when oil is sub $30 a barrel.
That’s also what Trudeau promised less a year ago, when he said at the Calgary Petroleum Club: “Getting our resources to market is a priority for Canadians and we know that that economic success depends on us keeping our word on the environment.”
But where is the urgency to resolve market access that Trudeau showed for climate change policy, or for accepting Syrian refugees, or for delivering on promises to aboriginal people?
Where is the leadership by Canada’s senior statesman in the face of the outof-control anti-pipeline politics played by premiers like Christy Clark, who keeps demanding her share of rent before allowing bitumen pipelines through British Columbia; or Montreal-area mayors like Denis Coderre, who on Thursday rejected the Energy East project, supposedly because the risks far outweigh the economic benefits, as if the risks of importing oil from abroad are any better.
It took Alberta Wildrose Leader Brian Jean to point out the obvious: “You can’t dump raw sewage, accept foreign tankers, benefit from equalization and then reject our pipelines,” Jean said on Twitter.
Meanwhile, Trudeau keeps encouraging pipeline opposition by banning oil tankers from the northern B.C. coast, is insisting on “modernizing” the perfectly competent National Energy Board even if that means more pipeline delays, and is offering sunshine while Canada’s energy economy is sinking.