Justin Trudeau’s Liberal government is scrapping years’ worth of Harper-era strategy on getting pipeline deals done. Will it work?
Published in Canadian Business by Markham Hislop
When Justin Trudeau’s Liberals won an unexpected majority government last October, Canadian First Nations and environmentalists cheered, while oil and gas executives groaned. The new prime minister banned oil tankers off the northern coast of British Columbia just nine days after assuming office. But what a difference seven months make.
Trudeau has emerged as a pipeline champion, with a good shot at seeing construction on two projects, Energy East and Trans Mountain, start during his first term in power—something his Conservative predecessor, Stephen Harper, didn’t achieve in nine years.
The Winnipeg MP points to the prime minister’s March speech at a Vancouver clean tech conference as the turning point. “[W]e must continue to generate wealth from our abundant natural resources to fund this transition to a low-carbon economy,” Trudeau told the audience. “The choice between pipelines and wind turbines is a false one. We need both to reach our goal.”
How will Trudeau get pipelines built? Political scientist Keith Brownsey of Mount Royal University argues the Liberals paid close attention to the many fumbles made by Harper’s Tories on the energy file: failing to build solid relationships with First Nations, allowing environmental groups to seize the public-relations initiative, not asserting federal authority and handing provinces like B.C. and Quebec control of the political agenda, keeping Canada outside of the international consensus on climate change, and ignoring legitimate criticisms of the federal review process.
In contrast, Carr says the Liberals have a three-part strategy for pipeline success. First up: Fix Canada’s relationship with First Nations. Enbridge’s Northern Gateway project, in the works since 2005, was likely dealt a fatal blow on June 30th when the Federal Court of Appeal threw out its 2014 conditional approval because the Crown (read: Harper government) failed in its “duty to consult” aboriginals as required by the Constitution.
Brownsey says the court’s decision encapsulated everything the Tories and industry did wrong in B.C. “It was very old-school thinking,” he says. “One pipeline company bought the local [aboriginal] community a hundred iPads. They are just so socially dim.”
Carr says the Liberals intend to have more “meaningful conversations with indigenous communities,” whose principles of land and water stewardship will be embedded in new policies and processes. “The reality in 2016 is that proponents will have to take very seriously building trusting relationships with indigenous communities,” he says.
The second part of the Liberal plan is tweaking pipeline reviews, which has taken heavy fire from environmental groups and First Nations critics. The Trudeau government promised to “modernize” the National Energy Board during last year’s election. However, Environment Minister Catherine McKenna said in January that a complete overhaul of the NEB is still years away.
Top of the list will be consulting provincial governments, something Harper refused to do. (He never met with the premiers after 2009.) “The Conservatives were so constrained by their ideology that they couldn’t imagine any sort of direct interference with the market. They had such a strict view of the federal-provincial division of power that they wouldn’t touch natural resources.
They left everything up to the provinces and the oil and gas sector,” Brownsey says. Into that political vacuum stepped B.C. Premier Christy Clark with her “five conditions” for oil pipeline support, a strategy the wily former talk radio jock used against Harper whenever it was convenient, and a Quebec government eager to assert its environmental review authority over Energy East.
Carr says the Liberals are returning to “co-operative federalism” and a hands-on approach: “It’s not possible to consider major national projects and a nation building policy if you don’t have all levels of governments talking to each other.”
Speaking of the provinces, Brownsey says Trudeau is busy building a coalition of pipeline supporters. For instance, when Ontario Premier Kathleen Wynne emerged from a January meeting with Alberta’s Rachel Notley to say warm, fuzzy things about Alberta’s new climate strategy and the quest for pipelines, the prime minister quickly praised their efforts from Switzerland, where he was attending the World Economic Forum: “I am very much in the camp of both premiers, Wynne and Notley, who demonstrated that Canada can and should work together on economic issues for all of us.” Trudeau also backs the Alberta premier’s work on forging a national energy strategy, which he hopes will bring more reluctant premiers on side with new pipelines.
At the centre of pipeline politics is climate change. The Trudeau government believes accepting the scientific evidence for human-caused climate change and reducing greenhouse gas emissions are critical to gaining social licence for pipelines, Carr says. He points to the recent sweeping agreement on energy, climate and the environment with the United States and Mexico as evidence that Canada is “moving toward a more sustainable energy sector.”
Eventually, after everyone has been consulted and all regulatory conditions have been met, the crunch time will come for Trans Mountain and Energy East. Then, according to Brownsey, the Liberals will pull out the Canadian government’s big chequebook and accommodate those groups and interests that need accommodating. The rest will watch as the prime minister marches “out onto the stage at the National Press [Theatre] with half a dozen representatives of First Nations and environmental groups by his side. He’ll say, ‘I have the support of these people, the project is approved, thank you very much.’ Then the argument is over,” he says. And if opponents like Burnaby, B.C., Mayor Derek Corrigan follow through with threats to throw themselves in front of the bulldozers, Trudeau will show no sympathy when the RCMP throws protestors into the clink, says Brownsey.
Despite proclaiming Canada an “energy superpower,” prime minister Stephen Harper never came close to getting a new export pipeline built. What are the odds that Justin Trudeau enjoys more success? Pretty good, argues Brownsey, who handicaps the three existing projects like this: Energy East at 95%, Trans Mountain at 75% and Northern Gateway at 15%.
Carr makes it clear that the government he serves is determined to get the job done: “The prime minister has said many times that it’s a major responsibility of the government of Canada to move our natural resources to market sustainably. That’s our objective.”