Trudeau lends sympathetic ear to oil patch’s plight during Alberta visit
Prime Minister Justin Trudeau solidified a congenial relationship with Alberta Premier Rachel Notley and sought to reassure an energy industry deflated by the oil-price plunge – and intent on building new pipelines to help with a rebound.
On Thursday in Calgary, the Prime Minister met with some of the country’s most powerful oil-sands executives, as well as the owners of smaller energy-sector companies. Industry members in the room said he listened intently as they told of having to lay off dozens, or sometimes hundreds, of their employees.
Since mid-2014, the price of oil has dropped by about 70 per cent, creating a cascade of bad news for Alberta’s once-powerful economy. The province shed about 51,000 full-time jobs last year, and the job losses are expected to continue this year.
“I’m going to continually highlight that we’re all in this together as Canadians – that Alberta contributed tremendously to Canada’s growth over the past decade. And now that we’re facing challenging times here in Alberta, Canada will be there for them,” Mr. Trudeau told reporters.
But, while praising the province’s ambitious climate-change policy and some energy-sector innovations, the Prime Minister made no clear promises about the building of pipelines – projects seen as crucial infrastructure by Alberta’s downtrodden energy industry, but as environmental concerns to political leaders and activists in other regions of the country.
Mr. Trudeau has said he wants pipelines to be built, but his government will play the role of a referee for projects rather than cheerleader. On Thursday, Suncor Energy Inc. chief executive Steve Williams said a meeting with Mr. Trudeau was productive but not definitive on the issue of pipelines.
“The key message was we clarified some of the challenges in front of us with the price cycle, with market access, and we talked about some potential solutions,” Mr. Williams told reporters following a private meeting with Mr. Trudeau, Ms. Notley, PMO advisers, federal Natural Resources Minister Jim Carr, Veterans Affairs Minister Kent Hehr, and other oil-sands leaders.
“I think ‘assurances’ is too strong a word. I think what we agreed was that we understood the need for them [pipelines] and we were all going to go away and work towards that end,” Mr. Williams said. Suncor – Canada’s largest oil company – now faces a funding deficit estimated at $4-billion in 2016 as it grapples with lower-than-expected crude prices.
Mark Salkeld, chief executive of Petroleum Services Association of Canada, said the Prime Minister asked good questions during his meeting, and understands the industry’s push for more market access. “He’s got a lot of challenges ahead to make this work,” he said. “It’s about aligning the country. It’s about going in and seeing these mayors who are raising a stink … and having those conversations beyond provincial bickering and parochialism.”
New pipelines to get Alberta oil to the East or West coast for export to foreign markets won’t change the low price of oil. However, growing production will eventually need increased pipeline capacity, and the industry said investors need the certainty of new pipeline projects to continue to put money into the country’s oil and gas sector.
Canada is also largely dependent on the United States for its export market, and the country’s heavy oil sells at a significant discount – or differential – to lighter varieties of North American crude. The Canadian industry, centred in Calgary, wants the option of selling to markets around the world, and potentially fetching a better price.
But Mr. Trudeau must balance interest in getting crude resources to new markets with the environmental concerns of municipal leaders and premiers from outside Alberta. TransCanada’s Corp.’s Energy East project faces stiff opposition from Montreal Mayor Denis Coderre and mayors in the surrounding area, who have argued that the environmental and safety risks outweigh the economic benefits. Kinder Morgan Canada’s proposed expansion of its Trans Mountain oil pipeline is being fiercely opposed by some B.C. Lower Mainland mayors.
Mr. Trudeau’s two-day trip was also a public-relations exercise to reach out to a province that both has experienced a dramatic drop in its economic fortunes, and hasn’t been inclined to vote for his party in recent decades. In Edmonton on Wednesday, the federal government confirmed it is prepared give Alberta a $250-million fiscal lifeline from the seldom-used, little-known fiscal stabilization program, and will fast-track up to $700-million in infrastructure funding. In a photo op at Calgary’s YWCA on Thursday, he helped pack hygiene kits for women experiencing abuse and homelessness.
There was little in the way of news in a push to make it easier for Alberta workers to qualify for Employment Insurance, or to extend benefits, as the Prime Minister said his government is still examining the ways it can strengthen the program.
But the visit showed the substantive changes in tone between Ottawa and Alberta. In contrast to the sometimes adversarial relationship between former prime minister Stephen Harper and Ms. Notley, Mr. Trudeau and the Alberta premier appeared together a number of times throughout the visit. The Prime Minister praised the province’s climate-change plan, which will increase carbon taxes, limit the growth of greenhouse-gas emissions from the oil sands and see the phasing out of coal-fired power plants.
Mr. Trudeau also called the Alberta Premier “Rachel,” and as the Prime Minister adjusted a microphone for her at a news conference, Ms. Notley described him as “a pretty awesome roadie.”
In Ottawa on Thursday, British Columbia Premier Christy Clark sought to make a distinction between her province’s stance on pipelines, and those of other politicians and activists who oppose proposed projects..
British Columbia five conditions for approval are broadly supported, including by Kinder Morgan Canada, which has said it intends to meet them, said Ms. Clark, who meets Mr. Trudeau in Ottawa on Friday.
With a report from Shawn McCarthy
Courtesy: The Globe And Mail