Local business community vows to keep backing pipeline
Ottawa will be pressed to take swift action, says city chamber of commerce president
Calgary’s business community reacted with a mixture of dismay and resolve Thursday as a federal court ruling put the future of the Trans Mountain pipeline expansion in doubt and cast a shadow over the city’s still-fragile economic recovery.
“This is a frustrating decision, but there’s a lot of fight in the Calgary business community,” Sandip Lalli, president and CEO of the Calgary Chamber of Commerce, said after the Federal Court of Appeal ruled the government of Canada had not fulfilled its duty to consult First Nations on the project. “It’s going to rally everybody.”
Lalli said the decision — which means the government will have to redo part of its consultations with Indigenous groups before the pipeline can go ahead — leaves Alberta’s oil and gas industry at a continued competitive disadvantage.
She said the Calgary business community will be pressing the federal government to take swift action to remedy the problems and push ahead with the project.
“This is going to unify all of us with one voice around competitiveness in Calgary and Canada and all that entails,” she said.
“The other option is just not a palatable option for the Canadian economy.”
The judicial blow to Trans Mountain comes at a time when Calgary ’s economy, and the Alberta economy as a whole, is still recovering from a bruising recession.
Oil prices are up, and Alberta’s economy grew faster than any other province in 2017.
Calgary saw GDP growth of 6.9 per cent in 2017.
However, Alberta has not yet recouped the losses experienced after the oil price collapse in 2014.
The province’s unemployment rate of 6.7 per cent is still higher than the national average and the vacancy rate in the downtown core is sky-high, at 26 per cent.
Richard Truscott, vice-president for Alberta and B.C. for the Canadian Federation of Independent Business, said small business owners across Alberta have been “hoping and praying” that the Trans Mountain pipeline expansion goes through.
“The vast majority of small business owners in Alberta realize the oil and gas industry is still the fuel that primes the pump of the economy,” Truscott said. “They will no doubt be dismayed by the decision that was rendered today.”
Alberta is sitting at a “critical time,” Truscott added, where the economy appears to be showing signs of life but is vulnerable to anything that negatively impacts confidence.
“If the business community doesn’t have confidence that responsible resource development will be moving forward in this country, that sends a pretty strong signal that Canada may not be open for business,” he said.
Earlier this spring, after Kinder Morgan Canada balked at moving ahead with construction, the federal Liberal government announced plans to buy the Trans Mountain pipeline and expansion project for $4.5 billion.
Shortly after the court ruling Thursday, Kinder Morgan Canada shareholders voted more than 99 per cent in favour of the sale.
On Thursday afternoon, Finance Minister Bill Morneau said the project is in the national interest and said the federal government is committed to pushing ahead with it. In a statement, Calgary Mayor Naheed Nenshi said he will be very supportive of all future actions to move the Trans Mountain project forward.
“To say I’m disappointed in this decision and related delay to the Trans Mountain pipeline expansion is an understatement,” Nenshi said.
“Important, nation-building projects like this deserve a fair, consistent and transparent process and I expect the advancement of the Trans Mountain pipeline expansion will continue to follow such a process.”
Bob Schulz, professor of strategic management at the University of Calgary’s Haskayne School of Business, said it’s unclear exactly what the next steps will be for Trans Mountain, but added Thursday ’s ruling is a kick in the teeth for all Albertans.
“The blow to the psyche is not about oil. It’s about whether we have a Canadian spirit anymore that can figure out how to get things done,” Schulz said.
“I fear Canada is going to become like a lot of other countries around the world where there may be boundary lines around what we call a country, but inside those boundary lines there are just a lot of fights going on.”
Calgary Economic Development said in a statement that it respects the “institutions of our democracy ” but is disappointed that another critical energy infrastructure project has faced a setback.
“In light of the decision by the Federal Court we need the government of Canada to recognize the significant economic challenges that Calgary is facing and do much more to support this city and worthy projects that create enduring prosperity for the entire country,” said CED executive chair Steve Allan.