The Cenovus-Husky merger officially marks the decline of energy exceptionalism in Canada
In 1986, a lavish cocktail party in Calgary rolled out a red carpet to welcome Hong Kong's most successful entrepreneur, Li Ka-shing, after he took control of Alberta oil giant Husky Energy.
In an interview I did with him at the time, he praised Canada and said both his sons would become Canadian citizens. They did. Unfortunately, in the past decade, Husky's shares have fallen by 80 per cent, and on the weekend the company announced it would merge with Calgary-based oilsands producer Cenovus Inc.
This is a smart move that will create a more resilient oil giant, and a spokesman for Li said he will retain a 27-per-cent interest in the new enterprise.
But Husky's trajectory is a metaphor for Canada's existential challenge: How can a country with great assets and entrepreneurs recover from the pandemic recession given the decline in foreign investment and the fact the federal government has declared war on its resource sector?
Of course, the pandemic has led to a wave of consolidations sweeping the oilpatch and other sectors. Everything from retail to hospitality, transportation, manufacturing, real estate and financial services will be more heavily concentrated as smaller, weaker rivals are snapped up or disappear.
But the Cenovus-Husky deal is driven by another damaging factor: the deliberate stranding and sabotage of Canada's most valuable commodity by the Liberal government.
The oil industry has not received the pandemic stimulus that was afforded to others, and now we see another example of this full-blown, nation-busting mentality.
Cenovus will close Husky's head office in Calgary, costing many jobs, and has also said that construction of the offshore White Rose project in Newfoundland will not resume in 2021, as originally planned. Without an infusion of tax money, White Rose, which supports an estimated 2,000 direct and indirect jobs, is a goner and another disastrous blow to Newfoundland on top of its hydroelectric fiasco.
But don't cry for Argentia (the centre of White Rose's project), because the federal minister of natural resources is Seamus O'Regan, a pal of Prime Minister Justin Trudeau's.
They're so close that O'Regan accompanied Trudeau on the notorious Aga Khan holiday freebie a few years ago.
So my guess is that Trudeau will throw copious amounts of tax dollars into the questionable Newfoundland oil project to prop up his pal and Liberal cronies with contracts there, while continuing to spite the West's struggling oil industry because they are Tories. The only good news is that Western Canada's oil sector is not a sunset industry. Its prospects may be lousy in the short term, but not in the medium to long term.
Oil will continue to dominate the world's energy mix for several more decades to come, according to the International Energy Agency. This means prices will increase again and some analysts predict that they will likely jump upwards of 115 per cent from where they are by the end of the year.
Alberta is also blessed with brilliant entrepreneurs, innovators and an enviable work ethic.
Yet a recent Statistics Canada report blames the federal government's damaging energy policies for contributing to the 35-per-cent decline in oil and gas investment over the past five years and massive job losses.
It forecasts that investment could shrink by another 40 per cent this year and another 220,000 jobs could be lost.
If that happens, then all bets are off in terms of national unity.
This weekend, when I read about the merger, I recalled the promise of the past.
It's been 34 years since Li Ka-shing was welcomed and feted in Calgary for investing, and believing, in Canada.
Oh how times have changed.