It’s Time to Build Canada Into an Energy Superpower
Canadians voted for Mark Carney and the Liberal government on April 28th, 2025. In his victory speech, Prime Minister Carney asserted, “It’s time to build Canada into an energy superpower in both clean and conventional energy.”
This week’s podcast delves into the election results and its potential impact on Canadian energy with guest Greg Lyle, the founder and President of Innovative Research Group, a full-service market research firm with offices in Vancouver and Toronto.
Peter and Jackie discussed several topics with Greg, including surprises in the election results, how the Liberal minority government could collaborate with other parties to pass legislation, and the potential future direction of energy policy based on the Liberal platform and Prime Minister Carney’s post-election statements. They also explored possible support for LNG export facilities, clean energy initiatives, and carbon capture and storage (CCS) projects like the Oil Sands Pathways Alliance project. Additionally, they considered proposals from the Liberals and industry to amend the Impact Assessment Act (Bill C-69), aiming to expedite decision timelines for project approvals.
Content referenced in this podcast:
- Letter from Canadian energy CEO’s to Mark Carney (April 30, 2025) “Build Canada Now: Energy CEOS to the Prime Minster of Canada: An Urgent Action Plan to Strengthen Economic Sovereignty”
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Episode 283 transcript
Disclosure:
The information and opinions presented in this ARC Energy Ideas podcast are provided for informational purposes only and are subject to the disclaimer link in the show notes.
Announcer:
This is the ARC Energy Ideas podcast, with Peter Tertzakian and Jackie Forrest, exploring trends that influence the energy business.
Jackie Forrest:
Welcome to the Arc Energy Ideas podcast. I’m Jackie Forrest.
Peter Tertzakian:
And I’m Peter Tertzakian. Welcome back post-election. So, we now know who the new Prime Minister of Canada is.
Jackie Forrest:
That’s right.
Peter Tertzakian:
It’s Mark Carney, unless you’ve been asleep. Not a majority, a near majority. So, we want to talk about that here in a few moments, but first of all, there’s some key dates that are coming up, Jackie, right?
Jackie Forrest:
Yeah, so we’re recording on Monday, May 5th, and tomorrow Prime Minister Mark Carney is going to meet with Trump in the Oval Office. So, I think that will be very important to understand what goes on there. We’ve been told that there was a press conference on last Friday that a new cabinet will be picked on May 12th. We’ll talk about what we’ll be looking for at that, and Parliament will be recalled on May 21st. King Charles will be there delivering a speech. So, lots of important dates coming over the next month.
Peter Tertzakian:
If it wasn’t difficult enough to decode the political situation, which we’re going to attempt to do, but as if that wasn’t difficult enough, we also now have to contend with news out of the oil world where OPEC plus group of countries are upping their production yet again, and the price of oil has fallen yet again. Well, on the latest news, it’s a few dollars, but we are now definitively under $60 a barrel, so we want to talk about that as well.
Jackie Forrest:
Yeah, so OPEC surprised… Well, I think it was a lot of people expected even late last week that this might happen, and that’s part of why I think price started falling even before the news. But just to put in perspective, they had this plan to bring back 2.2 million barrels a day over the course of a year, but now they’ve decided to accelerate that. So, if I looked at their original plan for May and June cumulatively, they would have added back about 360,000 barrels a day. With this new announcement, it’s more like they’re adding back a million barrels a day in that timeframe.
So, this is not helpful news in a market that is concerned by recession, outlooks for demand are being scaled back, and there was already an outlook for oversupply in the market. So, this is obviously a big topic, and even just the changing strategy here of OPEC. We will talk about this in a lot of detail. Next week, we’re going to have an oil-focused podcast.
Peter Tertzakian:
We’re going to have an oil… It’s consequential even to the discussion about the political situation and the new Prime Minister and his government’s desire to build out energy infrastructure. This has consequence because somebody has to pay for it all. The impact of going from $70 a barrel to the high $50s is not billions, but it’s tens of billions of dollars. It’s that consequential. So, we want to talk about not only the global dynamics of oil and oil prices and then bring it back home to Canada and what it means to our local economy.
We’re going to have some good numbers in terms of that. But for now, as I said, trying to decode the day-by-day things that are going on is still difficult. So, I feel like it’s… What was that TV show where you phone a friend to try and get answers? What was that?
Jackie Forrest:
I don’t remember.
Peter Tertzakian:
I don’t remember either. Anyway, whatever it was, we are phoning a friend and we want to welcome back Greg Lyle, founder and president of Innovative Research Group, Inc. Greg hails to us from Vancouver. If you don’t remember from the last time we had him, Greg’s a pollster, an analyst, political analyst, and just overall uber expert on the Canadian political scene. So, welcome back, Greg.
Greg Lyle:
Thanks so much.
Jackie Forrest:
Great. Greg, are you from Vancouver or was it Vancouver Island?
Greg Lyle:
I’m from Vancouver, but I live actually in Gibsons now. So, anyone that’s listening that remembers The Beachcombers, I live about three minutes away from Molly’s Reach.
Jackie Forrest:
Okay. I knew there was something unique about that-
Peter Tertzakian:
Is Molly’s Reach actually still there?
Greg Lyle:
Yeah. Ironically, it was not a restaurant when the show was shot, but it is now a restaurant.
Peter Tertzakian:
Right. Well, unfortunately, Bruno Gerussi and I think Relic have both passed since those days, and we’re probably talking beyond the memory of most people on this podcast audience.
Greg Lyle:
Yeah, exactly. Anyone under 60 is like, “What are you talking about?”
Peter Tertzakian:
Yeah, what are you talking about? Anyway.
Jackie Forrest:
Including me. No, I did watch the show, but I wouldn’t know the character names. That’s impressive. Okay, so we want to talk about two things quickly. Election results, lots has been said in the last week, so I don’t think we need to spend too much time, but we really want to focus more on energy policy and what it may look like under the new liberal Mark Carney government. So, let’s just start a bit with the election results. So, we got a minority government. It keeps changing a little bit. I think the last numbers were 168 seats when they need 172. So, they will still need some help to get legislation passed in the House of Commons. But let’s start off, Greg, based on your expectations from polling, were there some surprises in the actual results?
Greg Lyle:
Yeah, at the end of the day, I don’t think that there were any big shocks. So, we had talked before the election that we thought that the liberal vote efficiency that we’d seen in previous elections probably wasn’t going to be seen this time for a variety of reasons. That was not expected. I think the one thing that took everyone a little bit by surprise was how deep the NDP fall was. Everyone knew the NDP was going to be down, everyone knew they were going to be at a historic low, but I don’t think anyone predicted the winning 6% of the vote. That was a shock pretty much to everybody. But ironically, even though they are the fourth party in the house, they are actually the swing vote. So, actually right now, it’s 169 for the liberals, and if you put the Block and the Tories together, it’s 166.
So, the NDP basically get to decide if the government’s in power. Now, it’s not that the government has no other options. So, if the NDP wanted to defeat the government, but the government could convince either the Block or the conservatives to sit this one out, then there wouldn’t be any way of stopping the liberals either. The indication right now is that they’re not going to repeat the deal that they did in the past with the NDP that they will manage this issue by issue. There’s lots of precedent for that to work. Certainly, so long as the Trump issue is alive, it’s not very likely any of the parties are going to want an election anytime soon. Certainly not the Block or the NDP.
Peter Tertzakian:
Yeah, I mean the NDP really don’t have a lot of leverage even though they have technically the balance of power, but they can ill afford to call another election lest they go fewer than seven seats. Is that the thinking?
Greg Lyle:
It is hard to imagine it could get worse, but clearly, they’re going to want to have their leadership race because their leader has resigned and they need to get that in order. So, no one’s expecting an election anytime soon.
Peter Tertzakian:
On that note, did it surprise you that Jagmeet Singh actually came in third, I think not even second in his riding?
Greg Lyle:
No, it was a tough riding from the beginning and it wasn’t really a surprise that he got taken out there. It had a large Chinese vote in our polling prior to the election. The BC Chinese vote was moving to the conservatives. It was never an easy seat. He won it for the NDP in the by-election, and last election, he only won it by 10 points.
Peter Tertzakian:
Actually, while we’re on the subject of BC, I don’t want to leave it because one of the things that I noticed as I looked at the electoral map post-election was the swing of BC to the conservatives. Now you may say that’s not a surprise because the provincial vote also went dramatically conservative. They almost won a majority. But what I noticed, even on ridings like Vancouver Island, they didn’t go from orange NDP to liberal red. It went from orange NDP all the way straight through to conservative.
Greg Lyle:
Sure. Although we’ve seen that before on the island, right? So if you go back to the ’90s, those seats that are blue in this election tended to be reformed green in the 1990s. There is that reform NDP swing voter, and there was also some good vote splits for the conservatives. So, the NDP didn’t completely disappear up there and the liberals couldn’t catch up to the conservatives. So, it’s not like the conservatives have become a dominant force out there. One of the worries for the conservatives is if the election were relatively soon and those people that had kept voting NDP thinking the NDP was the best hope to beat the conservatives and those people swing over to the liberals, they may be harder to keep than they were to win.
Jackie Forrest:
Okay. Well, you talked about it’s unlikely an election anytime soon and I think from the NDP perspective, but also from the Conservative Party of Canada, because although they did win more seats, their leader didn’t win his seat. So, now there’s some uncertainty in terms of leadership there. Now I want to talk about this minority government. I think it’s really important to think about how this could work. May 2nd, last Friday, Mark Carney held a press conference, his first press conference, and he said he would not create a pact to govern with the NDP, as you alluded to already, Greg. He also said he’ll have no games with the conservatives and quickly run a by-election if Pierre Poilievre would like to run.
We just learned over the weekend that it looks like there’ll be a riding in Alberta that opens up for him. There was plenty of overlap, not only in his May 2nd speech, but even in the platforms of the two parties, things like fighting crime, reducing middle class taxes, slowing the growth of the public sector, boosting the military. It got me thinking, could we actually see some cooperation between the conservatives and liberals instead of the NDP being the swing vote? Do you think there’s many prospects for that? I mean, they had a lot of good things to say I thought on last Friday.
Greg Lyle:
Yeah, I would be surprised. It would be a pretty big shift in tone from Poilievre to start cooperating with the liberal government. Although on things like let’s say that Carney was going to make a move on something, the IAA, the act that governs major project reviews in Canada, you could imagine a scenario in which the conservatives might support that move, but it would depend on what the alternative looks like.
Jackie Forrest:
Right, and that’s the Impact Assessment Act or sometimes called the Bill C-69, it’s more famously known as.
Greg Lyle:
Some have been known to call it the No More Pipelines Act.
Peter Tertzakian:
Greg, are you surprised that whereas Mr. Singh immediately resigned his seat upon losing his riding and of course, whatever it was, 14 seats or something down to seven from the 24 that Mr. Poilievre did not and in fact is determined to continue running?
Greg Lyle:
Well, there hasn’t been a conservative since Brian Mulroney who won a larger share of the vote than Pierre Poilievre. If you look at underlying party brands, both the liberal brand and the conservative brand are stronger now than they were in the last election. Essentially, it came down to Poilievre did one big thing wrong, which in an election in which we were essentially interviewing someone to be the person to stand up against Donald Trump, he went around sounding like and acting like Donald Trump. By the end of the campaign, he had changed that tone. If you watched the debate, the Pierre Poilievre that showed up for that debate was very different than the Pierre Poilievre that had the back and forth with Laura Stone talking about the size of his rally turnouts.
Peter Tertzakian:
I guess I’ll be blunt, because politics is a blunt and brutal sport, there’s a saying, second place is first place for losers. So, I don’t get it honestly.
Greg Lyle:
I get that but don’t forget that the Conservative Party signed up 600,000 members in their last leadership race, and the vast majority of those people voted for Pierre Poilievre. So, he still has that relationship with those people. Arguably, he paid for it with his seat over his position in the convoy. So, his position on the convoy may have helped him win the leadership, but then had him lose his seat. But lots of leaders have lost seats and gone on. I mean, go back to Sir John A. Macdonald. I mean he’s in fine company in terms of leaders that have lost seats and gone on to bigger and better things.
I’m not arguing for or against him because I think the big question is going to be, “Does he convince the people that will have a vote in this matter that he learned the lessons he should learn, that he will build on the best and fix the rest in terms of his style and approach to leadership?” But when you look at the numbers, it is stark how both the liberals and the conservatives have greatly improved their brand with the public. The average Canadian is a lot more likely to like both of those parties now than they were in any election we’ve looked at for a long time.
Peter Tertzakian:
And to what extent was the vote splitting? I mean, how many candidates were basically artificially put on his riding ballot? It was so many that I couldn’t-
Greg Lyle:
Yeah, I don’t think that fundamentally made a difference. I mean, the number of candidates were put on a ballot could have hurt the liberals as much as him. I think the problem there was that there were a lot of people angry over in particular the convoy protests. This is an Ottawa seat for weeks and weeks. He stood with the people that were disrupting everyday life in Ottawa, and this was a chance for people to make him pay for that. There were army of people that went out to convince their fellow Ottawa residents that they should send Poilievre a message and they won the day.
I don’t think it had a lot to do with how many names were on the ballot. There’s also an underlying issue if you’re a conservative in Ottawa, there’s always a fear that you are going to cut the size of the civil service. So, that was probably a small contributing factor, but that threat had been there for years and years. The thing that was different was the convoy.
Jackie Forrest:
Okay. Well, let’s switch to energy policy. It seems that we are going to have a Mark Carney government for a while. Minority governments don’t always last the full four years, although the last one did, but at least probably for the next year based on the situation in terms of the other parties. Now, I wanted to talk a bit about some of the things Mark Carney has said in his victory speech and on this May 2nd press conference, just some of the quotes because some of them sound actually pretty constructive for energy, although the details are missing. So, he says things like, “It’s time to build Canada into an energy superpower in both clean and conventional energy. We will do things previously thought impossible at speeds we haven’t seen in generations. We’re going to build, baby, build. We’re going to build new trade and energy corridors.”
He spoke actually on May 2nd of this being the biggest transformation of our economy since the end of World War II. So, I want to have a discussion. Are these positive signals for the oil and gas sector? I mean, he doesn’t have the details on what these nation building projects are. That’s one thing that’s really missing for me.
Greg Lyle:
I think there’s lots of reason to be nervous and some reason to be hopeful. So, I think the single biggest reason to be hopeful is that his stated goal is he wants Canada to have the strongest economy, strongest growing economy in the G7. Peter is the economist in the room here. Mark Carney has been a central banker in two G7 countries and has had to live in the real world. This is not a theoretical exercise. He understands what drives GDP. He understands what drives growth, and he’s someone that knows the numbers to look at here. If you look at the last time the Canadian economy was really growing, oil and gas was a key driver of that growth, in particular, capital investment to expand our exports was a key driver.
Although I’m always open to being educated by Peter on the details of that. It is hard to imagine any other sector that can come close to being able to create the GDP per job of the oil and gas sector in Canada today. I don’t see how he can reach his goal without the help of the sector. That being said, his team continues to include people like Steven Guilbeault. He’s added to his team Gregor Robertson, who your listeners may recall, was the mayor of Vancouver who fought the Trans Mountain Pipeline tooth and nail when honestly it didn’t even go over his land, spent probably hundreds of thousands on legal costs fighting that thing. He’s very likely to be a minister. There isn’t a minister from Vancouver right now.
They’ve elected four MPs and it’s a fairly important place. So, when you look across the team, there are people that are not fans of oil and gas, particularly oil. Of the two, I would be more bullish on natural gas. Whoever came up with the term natural gas in the first place should be getting a royalty forever because just that brand of natural gas leaves it in a much better position than oil per se. But the bottom line is that there’s a lot of wealth sitting there waiting to be tapped in the oil sands that could benefit the country as a whole. If Carney wants the growth that he’s looking for, he’s crazy to leave that sitting there and not take advantage of it.
Jackie Forrest:
Greg, I appreciate those points. I mean, there’s a lot of discussion here in Calgary obviously in the last week and a lot of skepticism I think because of the last 10 years of the liberals here and the fact that there hasn’t been a lot of support for the industry and things like the oil and gas emissions cap, which are going to constrain production. But I’m optimistic that around natural gas, we’ll see something because there is an argument in terms of the greenhouse gas benefits that provides if you look beyond our borders and possibly maybe even support things like the CCS. He talked about CCS in the platform wanting Canada to be a leader in carbon capture storage. We already are. So, I think that could bring some benefits to Alberta as well.
Peter Tertzakian:
So when are we expecting the cabinet announcements that are coming up here?
Jackie Forrest:
At the 12th of May?
Peter Tertzakian:
Twelfth of May. So, a week from now. So, Greg, what are you thinking in terms of cabinet composition?
Greg Lyle:
Well, again, I’m watching to see where Gregor Robertson shows up and I’m hoping at someplace like housing or transit as opposed to energy or natural resources. You were talking about CCS and I heard Wilkinson on CBC radio during the election aggressively supporting CCS. Someone was saying it was an unproven technology and he just shot them down, just stopped them midstream and said he was from the energy technology sector and there was no question in his mind that it worked. So, even though Wilkinson has not always been oil and gas best ally, on that particular file, his heart seems to be fully committed to it. There are some new players that I’m keeping an eye on.
So, Tim Hodgson, Tim worked with the Prime Minister in the past when he was the governor of the Bank of Canada. He’s been chair of [inaudible 00:19:37] for the past few years. He works with some of the pension funds. He has a pretty good understanding of the energy sector and I wouldn’t be surprised to see him show up. There’s a former CAC finance minister out of Quebec that I wouldn’t be surprised to see moved up. I mean, he has the ability to build a very strong economic team. Arguably, the existing cabinet of people that he’s inherited have done a reasonably good job of managing the tariff file so far.
I mean, it’s very difficult when you’re on the other side of the table from Donald Trump, but Trump will do something like say he’s going to put the tariff on car parts and then they’re able to get him to edge back from that and say, “Well, no, if the car parts are covered under USMCA, then that’s okay.” So we’ve been fairly effective at damage control. It’s very hard to win with Trump, but we’ve been fairly effective at damage control. So, I expect to see a fair number of the people that we currently see in cabinet like Champagne and others continue to be there in the future.
Peter Tertzakian:
And what about Alberta? So we have two newcomers. George Chahal was defeated I believe in Calgary and Boissonnault didn’t run again in Edmonton. Now we have Corey Hogan in Calgary and I believe it’s Eleanor Olszewski in Edmonton.
Greg Lyle:
But Hogan, he’s been around, right? He’s a pretty well-known political operative. He has had his own podcast, The Strategist. I would be surprised if he wasn’t the person that got the nod, unless there’s a really strong reason to go another way just because he has the political smarts and he will likely be effective defending the government’s position in Alberta. The other thing that’s interesting is that when you look at the almost one, right, there’s actually several more competitive seats for the liberals in Alberta. I think they’re going to hopes for that as they think about how to get to majority. It is reasonable to hope that you could add three or four more Alberta seats if you had a policy that was defensible in Alberta.
Peter Tertzakian:
What do you mean, people crossing the floor?
Greg Lyle:
No, no. I mean just like in the next election.
Peter Tertzakian:
Oh, right.
Jackie Forrest:
Yeah. So, that maybe they have some incentive to actually do some good things for Alberta. That would be good.
Peter Tertzakian:
I’m thinking about next week, not the next election.
Greg Lyle:
But the nature of politics is that you start thinking about the next election as soon as the other election is over. Now the other point that you raised, and we should just note, is that the government is close enough three seats away from a majority. That one of the things that could well happen in the next couple of weeks is a couple of opposition members being wooed over to join the liberals. Well, the first big moment for that is the cabinet, right? Because the best thing you have to offer someone who’s crossing the floor is a cabinet position. It doesn’t necessarily stop them.
For instance, let’s say that the conservatives end up having a tussle and Poilievre remains in charge, but unrepentant and continues to do the things that people mourn towards the center within the conservative ranks. Don’t appreciate the idea that a couple of them might at the end of the day say, “Screw this, I’m not putting up with this anymore. I’m going to go over to the liberals.” It’s a real possibility. Then you’ve got a four-year government.
Jackie Forrest:
So lots of surprises may be still on the horizon, although it is not that common to see that crossing of-
Greg Lyle:
Yeah, it doesn’t happen all that often, but it does happen.
Jackie Forrest:
Yeah. Okay, let’s talk a bit about clean energy. That’s one area where they have been quite clear that they support it. So, I’d like to have seen more clear support for oil and gas other than using the term conventional energy. So, we all have to wonder exactly what they mean by that. But clean energy was actually mentioned seven times in the liberal platform. They were very specific that they’re going to keep and strengthen many of our clean energy policies, whether they be the investment tax credits or keep the Canadian Growth Fund and even make our manufacturing incentives more competitive with the Americans. It was noteworthy actually that Mark Carney mentioned the Pathways Alliance project during the debate specifically.
So, just a bit of a discussion. I was looking at the situation, Peter, on the US side of the border, we’ve really had been behind. It’s been hard for us to compete for clean energy investment because the investment tax credits were so generous, it made it tough to get the same return here in Canada. Could we see a turning of the tide here where it might look better to invest in clean energy in Canada because we’ve got a bit more policy certainty now? I know it’s a minority government, but the policies are mostly in place. In America, while they still have the IRA, there’s a lot of belief that that’s going to change here over the course of the next year.
Peter Tertzakian:
Whereas I think we have a little more certainty with the election behind us and some of the policies to be more clean energy focused, maintained. I still think we’ve got a long way to go before it cleans up. What I mean by clean up, I said it in prior podcasts, we need to address this issue of the fractured carbon markets, the layering pancaking chaining of policies at a federal provincial level. It’s still too confusing for enough capital to come in to make a big difference in my opinion. Now, as I said, it’s nice to get the election out of the way, but I think there’s a lot of work to be done with Mr. Carney’s new cabinet to figure out how we can stimulate the investment not only in things like infrastructure, like pipes and wires, but in the clean energy technologies that are adjunct to those.
Jackie Forrest:
He has talked about strengthening the industrial carbon tax, but also creating more linkages amongst the various carbon markets that we have and getting rid of the volatility and the oversupply. So, hey, maybe there’s something to come there. Let’s talk about the project approval process. He is talking about shortening approvals on major projects from five years to two years and moving to one project, one review, which he has talked about targeting six months to get this one window set up with the provinces. So, that a project proponent can come and have one process and not have to go through various layers of government. Now going from five years to two years, we talked about this on our last podcast. That sounds good.
However, the Conservative Party of Canada talked about six months and that sounds even better. What does the industry think? Well, we don’t have to wonder because shortly after the election, almost 40 CEOs from the energy industry wrote a letter to Mark Carney that said it had five points of things he needs to do to get money flowing back into the sector. In fact, the title of the letter was Build It Now: An Urgent Action Plan to Strengthen Economic Sovereignty. They wanted to kill the oil and gas emissions cap, which was importantly was not mentioned in the liberal platform. But Carney has told the press he would put it in. They want to repeal the federal carbon tax.
They also said that two years is positive but insufficient and they need the six-month timeframe to get the capital flowing back into Canada. So, what are your thoughts on that? Do you think that Mark Carney is going to be flexible to make some adjustments to what he put out in his platform?
Peter Tertzakian:
Well, I think we’re going to have to also wait and see Danielle Smith’s response, which is again, we have to timestamp our podcast. We’re recording early afternoon on May the fifth, and she’s going to give an address at 3:00 and see what she has to say as well in this regard because it’s not just what the industry says. It’s really what the province has to say. Greg, maybe over to you, what do you make of the federal government as it relates to government of Canada versus province of Alberta relationship?
Greg Lyle:
Well, I think that that’s a podcast in and of itself. Bringing in the separatist rhetoric is definitely taking the whole issue and putting it on boil. That doesn’t always play well for Alberta and the rest of the country. It can come across as a bit petulant, which isn’t necessarily helpful. So, we’ll have to see how that plays out. I think one of the issues that I would just flag in this whole discussion about the two levels of government working together and making cleaner approval processes, I think that you can do a lot of that without necessarily rewriting laws. So, through cabinet order, you can change criteria for project to get review. You can have agreements on a project by project basis to have certain projects dealt with at one level of government rather than the other level of government.
If you think about the many incremental pipeline projects, put aside an Energy East like proposal for a moment that clearly would require federal government approval because it goes across multiple provinces, there are lots of smaller pipeline projects that could just be delegated to Alberta to approve that would increase transportation capacity within the sector. So, there’s potential to expand even more the Trans Mountain Pipeline, although at the moment it’s not even at capacity. So, I would come back to the issue of the emissions cap. I mean, how do you go to shareholders and say, “We want to invest more in oil and gas production,” when you don’t know if you’re going to be able to actually fully implement it because you may be limited by the emissions cap?
So I think that issue is going to have to be dealt with pretty quickly. I think it’s going to be a hard one for the Prime Minister because he has such a broad coalition. So, we break Canada into six different value groups and there’s only one value cluster he didn’t win in. That was the populist conservatives. Even among deferential conservatives, like the old PC party, the Brian Mulroney type conservatives. The liberals did very well and he was seen as the better prime minister than Poilievre. Then right across though he got twice as many votes among people that have social democratic values as the NDP. Those people are deeply committed to things like energy transition and fighting climate change. So, that emissions cap issue becomes challenging for him.
One of the reasons why I’m relatively bullish on clean energy is having a strong clean energy agenda provides some insulation, the counterbalance to being able to do things like say we’re not going to proceed with the emissions cap, which I think is going to be pretty important to convince markets that it’s a safe bet to bet on Canadian oil and gas.
Jackie Forrest:
I have one grand compromise, which is pretty obvious to me is if they go ahead with the Oil Sands Pathways project, that will really reduce the damage of the oil and gas cap. I wouldn’t say we’d still want it, but it will be less of a problem in terms of reducing production levels overall because that will take a lot of emissions out of the system. So, maybe that could be something where the Pathways is supported by the federal government and that allows the oil and gas cap to have less impact.
Greg Lyle:
Well, I think the other thing that’s frustrating is I can’t ever recall hearing someone from Ottawa acknowledge Alberta’s success in moving off of coal well ahead of schedule with the reduction of emissions that came from that and the success of the industry in reducing the methane emissions, which has been very significant. I think it would go a long way if the Prime Minister were to recognize that Alberta has actually done quite a bit. If you look at where emissions have been reduced in Canada in the past five years, most of the major emissions reductions have come from Alberta.
Jackie Forrest:
Well, if you look at the oil and gas cap, if you just reduce methane in line with this goal of 75% reduction by 2030, which is another policy and you do the Oil Sands Pathways, you pretty much achieve what the oil and gas cap was trying to achieve. So, you don’t need it if you go ahead with both of those-
Peter Tertzakian:
The thing is that most people don’t understand. This is I think a challenge to the Prime Minister is how to tell the story that the emissions cap is actually layered on top of an alphabet soup of policies, GGPPA, CER, CFR, and the list goes on at the provincial levels and then the methane regs. It’s just like one thing on top of another, on top of another, on top of another that just complicates matters.
Greg Lyle:
I mean, what I love about this is that you could now have a conversation with people like Tim Hodgson and the Prime Minister of Canada, and they would understand what you’re saying. Actually, they have done due diligence on people making energy investments. They understand pancaking. They understand you can describe the problem and they will immediately understand it. If he is serious about reaching his goal of economic growth and if he’s serious about being seen to make big changes, then that is an obvious area where the average person really has no idea what’s going on.
There’s very little stickiness to that issue in terms of public. So, he could clean house in that area. He could re-engineer the whole thing and the public would not really know the difference and it could make a big difference for the sector.
Peter Tertzakian:
I think you’re right. I think that is the challenge is to do that because there’s a lot of cleaning up to do.
Greg Lyle:
Well, just the one thing I would watch for is that he’s talking about three different priorities in terms of dealing with the United States, fight, protect, and build. So, protect is basically programs that we do to help auto workers that are laid off, whatever. We have an infrastructure for that. We have an understanding how to deal with that from COVID. That’s something that the existing ministerial team can deal with. The fight, we’ve been doing okay with that. He’s got lots of ideas of his own. We have a pretty good team for that. What I’m looking for is who’s his build team?
If you think about fighting and responding to Trump as today’s issue, building a stronger Canada is tomorrow’s issue. If you have the same people dealing with today’s issue and tomorrow’s issue, today always wins. But if you have a team focused on tomorrow and a team focused on today, then you have a real chance of making a difference. That’s where I think who gets into the economic portfolios. I hate to keep coming back to Tim Hodgson, but he’s just like unique among elected people.
Peter Tertzakian:
Can you just for our audience who don’t know Tim Hodgson, give us the thumbnail of who he is?
Greg Lyle:
Sure. So, he’s trained as an accountant. He spent the past few years as chair of Hydro One in Ontario, which is a partially privatized electricity utility that runs almost all the transmission in Ontario and also runs a quarter of the distribution. I think he’s on the board of teachers, if I recall, on one of the big pension funds in Canada. So, he’s basically a capital markets guy who is very familiar with at least the electricity side of energy.
Jackie Forrest:
Okay, and understands how all of these overlapping policies could be a barrier. Well, let’s talk about this LNG. You said natural gas might be more interesting, but we didn’t even see LNG mentioned in the liberal platform. I’m not sure I’ve heard Mark Carney even mention the word LNG or natural gas. He’s talked about conventional energy. We all have to wonder what that is, but I actually think there’s a good argument why he would support LNG. I think there’s greater public support in general for energy infrastructure.
I’d like to get your opinion on that, Greg, but also there’s this argument about natural gas being cleaner than other sources and our gas being cleaner than American gas and reducing the use of coal in China. So, just some thoughts, Greg, on would those two arguments help win the day so that he could navigate concerns around climate with trying to grow the economy?
Greg Lyle:
Well, I mean, even the David Eby government has become more bullish on natural gas development and they’ve been open to the incremental projects that are on deck in BC. It’s hard to imagine that the federal liberal government wouldn’t go arm in arm with the Eby NDP government to take advantage of that opportunity, especially when your goal is to grow the economy and to diversify our exports offshore. To that regard, I think that the recent trips that Danielle Smith did could be helpful in that regard. I’m curious to what degree, and I guess we’re going to hear very shortly that that came up in her conversation with the Prime Minister and that she’s encouraged by that. But I think the door’s wide open to more of that work.
I know that there’s going to be resistance from environmental groups who are concerned. One of the things I’m wondering about is the Prime Minister has talked about federal budgeting as a capital budget and an operations budgeting. It’s going to be tough on the operating budget, but he’s going to increase spending in the capital budget. I’m wondering to what degree he’s prepared to take a similar framework to emissions and say, “If we look at domestic emissions, Canada’s committed to be a leader and continue to bring those domestic emissions down.”
But when you think about energy exports, we want to look at the impact of our exports in the world and ask ourselves, if we don’t meet that need, is the alternative going to create more harm than our supply would? I think for most cases, the answer is 100%. If we don’t supply our natural gas to the world, if we don’t supply our oil to the world, the alternatives are very likely to be worse for the environment and quite possibly end up generating funding that supports oppressive governments or actually aggressive governments that are creating national security issues around the world.
Peter Tertzakian:
So what does the latest polling say on that? As I understand, you’ve done some recent-
Greg Lyle:
Yeah, the polling on infrastructure is up on everything. A really good example of this is support for oil pipelines. So, across the country as a whole, there’s now more than 20% more people that support than oppose oil pipelines. If you think about times like the Kalamazoo spill, support for oil pipelines was negative, but it’s never been higher than we’ve seen right now. Even in Quebec, there’s 10% more people that support building more pipelines, more oil pipelines in Quebec today than there are Quebecers opposed to it. Arguably, there have been times in the past where Quebec residents have been open to the argument, but the leadership in Quebec has had the point of view that it’s a no go. So, they wouldn’t go there regardless of the polls that they saw.
We now see that the elites in Quebec are willing to talk about it. That doesn’t necessarily mean that at the end of the day, there’ll be a business case for it, but the fact they’re open to it now. One thing that I’m watching for is when will the elites in Ontario and Quebec understand that the vast majority of the oil they get, almost all the oil in Ontario comes through the United States, and that if we want to play silly beggars with the Americans cutting off our supply of oil to them, they can shut down the Ontario economy within weeks by shutting off the oil. You just have to look at a map. That’s like not a state secret. You can see where the oil goes. So, for some reason, the rest of Canada hasn’t totally woken up to that. We’ll see if and when they do. But I still think when you look across the board, it’s never been a better time to propose a fossil fuel energy project in Canada.
Peter Tertzakian:
Can you just expand on elite? Who are they? What do you mean by elites?
Greg Lyle:
Media commentators, elected officials, think tank people. You see more and more comments now in the media panels, all the rest of that about the idea that Quebec might be willing to accept new pipelines. In the past, they would just say that it was a no-go, that you couldn’t talk about. It wasn’t doable. Even the premier of Quebec has opened the door to that discussion, although he’s not embraced it.
Jackie Forrest:
Well, Greg, well, it’s good that they’re open to infrastructure. I would just say I don’t even think we have to worry too much about building pipelines through Quebec. I think we should focus on these LNG projects. By my count, when you look at the projects that are being developed by private capital, Carney made a comment on Friday about for this big building thing, biggest since World War II, there’s going to be some public spending here. You don’t need public spending. You just need to show these proponents of these projects that Canada’s, as you were saying, Peter, open for business, that Mark Carney will support these projects and help pave the way, speed things up, get it done.
Four BCF per day of potential exports of LNG that we don’t have on our map today, that’s incredible. We only produce about 18 BCF per day of gas. So, an additional four BCF per day, that would be tens of billions of dollars of investment. I think that could be done well before 2030 and we should get it done.
Greg Lyle:
Well, and if you had made that same point to the previous Prime Minister, I’m not sure we would’ve understood the value of leveraging private capital over public capital and how that frees up the public capital to do other things. But I don’t have any doubt at all that Mark Carney would be all ears to that. If he knew that he could get closer to his goal of being the fastest growing economy in the G7 just by getting out of the way of the private capital that wants to deploy and you’ve got a provincial government in BC that is more open to that than they’ve been for several years.
Again, not counting our chickens before the hatch, but it’s all lining up quite well. I mean, the one thing I would just flag for everyone is that none of these projects happen without working with indigenous communities and the six-month deadlines, things like that when you’re talking about indigenous communities, if they’re on the proponent side, well, then that’s a doable thing. But if they’re not on the proponent side, I don’t think we’re getting six-month approvals. I would just flag though that on the referendum file earlier in the past couple of days, there was some initial pushback from indigenous communities. I thought the Premier was very quick to make the case that they have their own relationship with the federal government and that she is not challenging that in any way.
I think that’ll be a good refresher for her that when she’s talking about deadlines and processes, that we’ll likely get ourselves into a process fight if we start trying to put deadlines on the indigenous exercise of constitutionally protected rights. That’s just not a productive place to go. The right place to go is try and find a win-win deal that works for everyone, do it with projects that are well-engineered, well-considered, with appropriate mitigation and make sure that governments in their processes proceed speedily.
Jackie Forrest:
I think there’s a compromise there too though, Greg, I think one of the biggest issues with the industry is this political decision that comes at the end of the process. So, maybe you could have that political decision upfront and then the consultation could take a bit longer, take the time it needs to take to ensure that all of the consultation is done in the right way. So, hey, maybe there’s a way we can do it.
Greg Lyle:
I 100% agree that if you look at, for instance, how the theory of electricity planning in Ontario is that the provincial government sets up a plan that says, we’re going to build these types of things, and then the regulatory bodies determine which of those types of things get done, so the regulatory decision and the political decision are separate. So, the issue here is that the government has a fiduciary duty to First Nations on these infrastructure projects.
If the government can simply say, we have an export goal, for instance, that we want to increase the amount of natural gas exports by X amount and so pipelines that enable that, that have been approved by the CER will be approved by us, that type of policy, that all works. They just have to be very clear that they don’t do something that is interpreted the wrong way in terms of their responsibility to protect the constitutional rights of indigenous people.
Peter Tertzakian:
Well, Greg, it’s always a delight talking with you. I think we need to wrap up here very quickly, but maybe we can just ask you one more question about CCS, carbon capture, and is there any polling or what are any insights you have on that?
Greg Lyle:
Yeah, CCS is a very popular thing. I mean, you could see it in frankly, the conservative platform, right? The conservatives said technology, not taxes. That is what Canadians are looking for. They take the issue of climate change seriously. That hasn’t gone away. It’s just that they put priority right now on economic security. So, if there’s a trade-off and they have to choose, they choose economic security, but they would like both. They see technology as a way to deliver that. Again, as I mentioned before, you even have ministers that have been skeptical in the past, like Jonathan Wilkinson saying, “This is a proven technology. It will work. This is a good thing for us.”
Peter Tertzakian:
Well, wonderful talking with you. Thanks a lot, Greg. At the beginning of the podcast, we said we needed to phone a friend to try and decode our political fortunes in this country. So, thanks for helping us. I learned a lot as I always do talking with you. So, Jackie, I think we’ve decoded some of the election, energy policy, and what to watch for going forward. Thanks very much, Greg.
Greg Lyle:
Thank you.
Jackie Forrest:
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Announcer:
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