NDP treads cautiously with the Alberta oilpatch
It’s been two weeks since Albertans elected an NDP government and the big blue sky has yet to fall.
Not that there aren’t a lot of chicken littles predicting the worst, especially for the oilpatch, which since the days of Ralph Klein always got what it wanted from the Tory government.
Mostly the industry wanted to be left alone to do what it thought best without much interference from pesky regulators. And then have government (taxpayers) spend millions of dollars promoting their various projects such as the Keystone XL and Northern Gateway pipelines.
That will change with an NDP government. Although at this point it’s not clear how much change the NDP are willing to risk.
It can poke the bear, but too much poking may produce an angry backlash from both the industry and the thousands of Albertans who depend on it for their livelihood.
So far, NDP Leader Rachel Notley has trod a cautious path. Publicly, she has only encouraging words for the industry. And according to Doug Suttles, CEO of Encana, Notley called to express the hope that the industry and the government could work collaboratively.
Big Oil executives are treading cautiously in public as well.
It’s annual report season and most of the companies who held shareholder meetings in the wake of the NDP win made a point of proclaiming that they will wait and see what unfolds before they jump into the fray.
Not that there wasn’t a lot of private griping. Two directors of Canadian Natural Resources Limited, one of the big oilsands players, were overheard at its annual meeting scoffing about Bob Rae’s NDP government in Ontario and the disasters that ensued.
During the election campaign Notley promised to raise corporate taxes by 2 per cent. And in the last few days she has restated her pledge to hold a royalty review to determine if Albertans as the owner of the resources are getting their fare share. The NDP would also like to see more bitumen upgraded and refined in Alberta rather than exporting it as a raw resource.
Given the current low price of oil, the industry will likely mount stiff resistance to all those moves. But it should remember that even though Ed Stelmach backed down from royalty increases when he was premier, they were popular with Albertans. It was only when the industry threw its weight around and threatened to pull up stakes that the tide turned and Stelmach found himself out of favour.
There is also a certain amount of resentment in Alberta against energy companies that made substantial profits in the past few years, but when the oil price plunged immediately started cutting employees and contractors in an effort to impress shareholders
When the Canada West Foundation conducted a survey of attitudes toward resource industries in the western provinces last year, it found that only 20 per cent of respondents trusted the energy industry. Most respondents saw it as motivated solely by profit and not environmentally and socially responsible enough.
Jim Prentice, the unlucky leader who led the PCs to defeat, understood the inner machinations of the oil industry better than any premier since Peter Lougheed. He was so much a part of that world that he single-handedly raised thousands of dollars from the industry before he even won the leadership race.
But unlike Lougheed, he wouldn’t stand up to the industry. He pandered to it instead and refused to raise corporate taxes even though the provincial treasury was facing a $7-billion shortfall.
But where did that get him? Even in Calgary where thousands of people work in oil industry head offices, 14 out of 25 ridings went to the NDP. The Liberal and Alberta parties picked up one each. The PC line that only they could ensure a prosperous economy didn’t work.
In the end, voters didn’t seem to care that Prentice had such solid connections with the industry. So perhaps Big Oil should regroup and figure out how to best connect with a government that isn’t so beholden to it.