Commentary – Liberal Win: Possibility for Constructive Change in the Canadian Oil Patch
Canadians have spoken for change. After nearly ten years of Conservative rule under Alberta’s Stephen Harper, Canadians voted in a majority rule Liberal government last night, headed by Justin Trudeau.
Of course, this is not Canada’s first Liberal government headed by a Trudeau. Justin’s father, Pierre, led the Canadian government throughout most of the 1970s, and the early 1980s. Memories run long in the west, and any mention of the former Trudeau’s National Energy Program can still generate a heated discussion in Alberta.
The good news is that Justin Trudeau’s energy policies do not appear to look anything like his father’s. Here are some of the Liberal Party’s energy-related campaign pillars, and how they could impact the oil patch:
Making environmental assessments credible again. The Liberals choice to pick winners (KXL) and losers (Northern Gateway) in the pipeline debate got the lion’s share of the media attention. However, the Liberals have other policies that could impact future pipelines and large energy projects. The party has promised to immediately review environmental assessment procedures by introducing new processes that build trust. They have pledged to modernize the National Energy Board (NEB), include upstream GHG emissions in project evaluations, and do more to protect endangered species. At first read, these changes look like they could add delays and complications to the regulatory process. However, I believe any oil patch executive would acknowledge that a lack of trust in the current system is at the heart of the industry’s “social license” issues. If the Liberal review of the NEB results in a more credible process then that would be a win for Canadians and industry.
Pledge to increase communication with the Provinces. It has been six years since a First Ministers’ meeting was held—a session with provincial leaders that is chaired by the Prime Minister. Since then, the provincial leaders have met amongst themselves, without the Prime Minister, in order to discuss energy and environmental policies. As an outcome of these meetings, provincial leaders issued a Canadian Energy Strategy in July of this year. But the effectiveness of the strategy is limited without Federal participation. Also, there is the other issue of the process for pipeline approvals, where some provinces – BC, Ontario, and Quebec – have put forward their own project conditions outside of the NEB process. While it is not guaranteed, involvement from the Federal government could help to address provincial pipeline concerns.
Provide national leadership on climate policy. Trudeau promises to work closely with the provinces and territories in developing a plan to reduce GHG emissions and meet international obligations. More participation in carbon policy by the Federal government can be positive, especially since they are responsible for international commitments. Plus, it is possible that Federal participation could enable a wider policy, one that ensures the lowest cost reductions in the Canadian economy are made first.
Increased focus on First Nations. Trudeau has pledged increased engagement with Canada’s First Nations, Inuit, and the Métis people, including a plan to ensure that the Crown meets its consultation obligations. Most in the oil patch would agree that increased Federal clarity on consultation obligations is a good thing.
No doubt the Trudeau Liberals have lots to do. The platform page on their website has over 100 unique initiatives, ranging from senate reform to fighting poverty, providing greener communities and investing in the military. It is still uncertain which of these initiatives will rise to the top of the priority list. One thing is for certain, change is on its way with this new government. And for the energy industry, although it is still early-days, the Liberal platform offers the possibility for some constructive change.