Oil leaseholders get a short reprieve

The Saskatchewan Party government’s odd decision not to proceed with the new Surface Rights Act would seem counter-intuitive.

In fact, now would seem the time to implement the controversial legislation that many think will favour the oil industry — an industry Premier Brad Wall’s government has been long accused of favouring.

After all, it wasn’t so long ago that the Sask. Party was still travelling to Calgary to hit up well-heeled oil men for political donations — a bizarre potential conflict of interest that many might think should be outlawed.

Alas, Saskatchewan’s Election Act offers few meaningful restrictions on either large corporate or union donations — clearly one of the contributing factors to this province bouncing back and forth between very pro-business or pro-union governments.

We certainly saw political conflict in the days of the previous NDP government when it came to pro-union policies like the Crown Construction Tendering Agreement (CCTA) demanding union-level wages be paid on all government contracts, or the most-available hours regulations that would have required most employers to assign hours to part-timers based on seniority.

We’ve also heard the Sask. Party being accused of rewarding business for large donations in the form of favourable labour laws like Bill 5 (the Trade Union Act, making certifying a workplace tougher) or Bill 80 (the Construction Industry Labour Relations Act that made it tougher to hire tradespeople out of the union halls).

The latest perceived conflict to draw political fire is Cenovus (the Sask. Party’s largest political donor) benefiting from the $1.2-billion carbon capture project.

Clearly, it is in the oilpatch where there would be the most potential for conflict ... although sometimes that conflict has been within the Sask. Party’s philosophical ranks. This is where the Surface Rights Act — and the decision not to proceed with it — gets interesting.

The Surface Rights Act dictates the drilling regulations for oil or gas companies on private property — an especially contentious issue for the Sask. Party because farmers and ranchers, who are also its solid supporters, were expecting favourable changes when it comes to negotiating leases, distance of drilling from an occupied dwelling and damage from drilling.

However, many farmers and ranchers fear the Sask. Party government will favour the interests of the oil companies even more, given that former energy minister Tim McMillan — who sought input from farm and ranch leaseholders last spring — recently became president of the Canadian Association of Petroleum Producers (CAPP).

Prior to the session, Energy Minister Bill Boyd insisted the government would “make every effort to ensure this (change to the law) is as fair and balanced as we can.” Boyd added: “I don’t know if you can ever completely please everyone when there are two completely different views.”

That sent chills through the affected farm and ranch leaseholders — especially since Boyd also said the new legislation would be introduced this session, one way or the other.

Well, despite sitting on the legislative order paper for several days, it wasn’t introduced. The government may attempt to reintroduce it in the spring sitting as an “essential bill,” but that may not be a simple task. And given that the spring sitting could be the last to pass bills before the next election, this bill could be on hold for a while.

A victory for farm and ranch leaseholders? Maybe. It certainly seems wise for the Sask. Party government to put as much distance as possible between McMillan’s arrival at CAPP and the new law. But farmers and ranchers were also clamouring for changes because they see the current rules as unfair. So what happened? Well, falling oil prices are already claiming their first victim: Those landowners who argue an immediate need for tighter restrictions on drilling on their property.

While one might intuitively think a time of falling oil prices (below $64 US a barrel on Tuesday) would be the exact time the Wall government would do what it can to encourage costly exploration, it is more politically astute than that.

Notwithstanding its midyear budget optimism on both oil pricing and Crown land sales, there would seem little doubt low prices will reduce such project development in the oil sector. And about the last thing the Sask. Party government needs/wants is the industry blaming a decrease on production on government policy changes — what really did in former Alberta premier Ed Stelmach.

It may now be better for the Sask. Party government to simply wait until after the next election, in the hope that oil prices will rebound.

For now, it appears landowners have got at least a temporary reprieve from a law they fear may be more favourable to oil companies.