From Petro-Canada to Pipero-Canada

Justin Trudeau’s Liberals are about to undertake their first significant piece of energy nationalization in three decades, and it’s going to be ugly. Their imminent $4.5-billion takeover of the Trans Mountain pipeline and its $7-billion-plus expansion proposal, has its nearest historical counterpart in the acquisitions made by Pierre Trudeau’s state oil company, Petro-Canada, in the 1970s and 1980s.

But the attitude of the second Trudeau regime to nationalization could not be more different from the first. The good news is that the acquisition of Trans Mountain is attached to no grand xenophobic industrial strategies (in fact it goes in the opposite direction, to Ottawa’s commitment to a low-carbon “transition.”) The bad news is that it is an act of sheer desperation by a government that finds itself up climate-policy creek in a barbed wire canoe.

In fact, the lessons of Petrocan appear entirely forgotten, if indeed they were ever widely known. Petrocan was taken over by Suncor almost 10 years ago and is now known by most people merely as a gas station brand that sponsors sports on the CBC. Suncor runs Petro-Canada now as a respectable business, but given its history, it is remarkable that the brand should exist at all. Anybody who kept around “Titanic,” “Edsel” or “Enron” as a brand name might be thought deranged, but it’s in the same category that Petrocan belongs.

The state oil company’s very expensive lesson was that government can’t run things (it never made a cent of profit), can’t compete with the private sector (it was comprehensively outmanoeuvered when it tried to take over Husky), can’t resist using such instruments for political reasons (It grossly overpaid for Petrofina to “show the flag” in Quebec), and is inevitably bamboozled by its own creations (chairman and CEO Bill Hopper kept the board in the dark, but was brilliant at persuading Ottawa to fund the expansion of his empire). It did however run a very successful Olympic torch relay to Calgary in 1988.

Then again, do we need any more lessons in government incompetence? The federal Liberals’ announcement in May that they would buy Trans Mountain coincided with an auditor general’s report that Canada has a “broken government system.” Among the many other things it can’t do is build bridges (Champlain), or organize payroll systems (Phoenix).

Bizarrely, however, the fact that the government can’t run anything in particular has transmogrified — thanks to the manufactured climate crisis — into a claim that it must “sustainably” regulate everything in general. This megalomanic aspiration is just one part of a program of global governance co-ordinated by the utterly corrupted and incompetent United Nations. Predictably, that system is crashing the world over, and not just because of President Donald Trump’s denialist deplorables.

When Finance Minister Bill Morneau announced the Trans Mountain deal a couple of months ago, he couldn’t stress too strongly how the government had no intention of being in the pipeline business long term. Part of the deal was that the project’s parent, Kinder Morgan, would help the government look for another private investor to whom to pass the parcel. The period for Kinder’s assistance ran out last weekend, just after the cabinet reshuffle that saw Edmonton MP Amarjeet Sohi take over the Natural Resources portfolio, and with it responsibility for Trans Mountain. Sohi politely declared that he had “big shoes to fill,” but the more important feature of the ministerial footwear previously worn by Jim Carr, his predecessor, is that it is nailed to the floor.

As the former minister for infrastructure, Sohi knows something about handing out government money, but Trans Mountain is not a problem that can be solved by throwing taxpayers’ cash at it, although that was inevitably the government’s first resort (Albertans should be doubly appalled that Rachel Notley is also willing to kick in up to $2 billion).

Meanwhile the Liberals’ infrastructure plans have been treading water. Ironically, in their desire to shovel money out the door, the Liberals abandoned a provision that projects should be checked out for their potential as public-private partnerships; governments were considered far more efficient at spending money. The Liberals would love a P3 now.

Ottawa has been peddling the notion that lots of companies have been looking at Trans Mountain, and that it may have snapped up “a bargain,” but despite the offer of government indemnities against political risk, nobody has stepped in. Any investor that did so would be rash indeed, for the more funds the government had to pay out to cover all costs caused by court delays and civil disobedience, the more the investor would be pilloried as an incompetent corporate-welfare bum. Certainly all sorts of investors would be interested in buying the system once — or rather if — the expansion were completed.

It is difficult to imagine how Trans Mountain will not remain a political albatross until the next election, although the Liberals obviously made the political calculation that buying it was better than simply having the project die immediately due to their startlingly muddled policies on energy and the environment.

It is hardly good news for the Liberals that Trans Mountain is likely to be overshadowed by the even larger — but very much related — fight over carbon taxes, as current and imminent provincial premiers, reflecting the belated awakening of their electorates, fight these economically destructive and environmentally pointless burdens.

Under government ownership, pressure is bound to increase for Indigenous interests to be given an equity interest. That in fact may be inevitable. But there are also other pressing issues, such as how many women there will be on the Trans Mountain board, and whether the company’s procurement is suitably supportive of racial, gender and every other diversity.

While it should be of concern that the “learnings” of Petrocan have never been absorbed, Trans Mountain is about to provide a whole new set of lessons about the contradictions of pretentious green progressivism.