After months of talking points, innuendo, hints and vague promises, we have finally heard at least some of the terms of the so-called Grand Bargain between Alberta and the federal Liberal government. This bargain is supposedly a trade off where Alberta gets its coveted oil pipeline and the federal government gets a number of commitments from Alberta to reduce the carbon footprint of the oil and gas industry in that province.
This week in a joint press conference, Alberta Premier Danielle Smith and Prime Minister Mark Carney signed a Memorandum of Understanding (MOU), in which both parties have agreed on a path forward for a new oil pipeline to the B.C. Coast. In any sane country, this would not be a big deal, as the notion of making the most of Canada’s incredible resource potential should be a no-brainer. But in current Liberal Canada, still occupied by politicians that put costly and ineffective climate policies above the well-being of Canadians, it qualifies as big news.
Before popping the champagne corks, some facts are in order. First of all, despite Carney’s promises during the election to speed along important major projects at rates never seen before, the best guess is that shovels may hit the ground on this pipeline in 2029. If we’re lucky. Considering that B.C. remains opposed, First Nations must be extensively consulted and environmental groups – most being heavily subsidized by our tax dollars – are chomping at the bit to oppose the pipeline, 2029 is immensely optimistic. Indeed, there is a very good chance this pipeline will never see the light of day under a Liberal government that doesn’t have the courage to exercise its federal jurisdiction over an inter-provincial project that is clearly in the national interest.
Conditions on Alberta to be permitted to develop this pipeline are very onerous. The province must agree to impose an even more punitive industrial carbon tax on the oil and gas sector than currently exists, and that our competitor nations do not impose on their businesses. Details on exactly what this would look like are still unclear. As well, Alberta must proceed with a mammoth carbon capture utilization and storage (CCUS) initiative to supposedly reduce sector emissions. Many experts believe CCUS is a useless pursuit to supposedly get rid of carbon emissions that are not a problem for the climate. CCUS is also enormously expensive and will be sure to increase the cost of energy to Canadians and businesses. Canada’s energy costs are already uncompetitively high, and further hikes can hardly be seen as a good economic strategy.
It’s also worth keeping in mind that Carney has to date shown himself to be far more concerned about partisan political issues than actually boosting the economy to the benefit of Canadians. It’s well known that Carney covets a majority government intensely, which should worry most Canadians as his authoritarian style to date would be very problematic if there were no opposition party influence. Word on the street is that Carney is still hoping to have another federal election next spring, in the hope of obtaining a majority government. Having a supposed agreement with Alberta – with no actual results to show for it – could be seen as an advantage to Carney in that he doesn’t appear as obstructionist as Trudeau while not actually accomplishing anything concrete.
Another important consideration is that Canada’s economy has been in the doldrums for some time, and our standard of living continues to decline. Long term projects such as pipelines are very important, but we also need some short-term measures to kick-start our economy sooner rather than later. The fastest way to do this is for the Canadian government to reach a trade agreement with the U.S. The fact that Carney recently dismissed the importance of this by saying “who cares” if he had recently spoken to U.S. President Donald Trump, indicates that Carney continues to want to keep Trump as the bad guy holding Canada back so he can profit from that politically. Sadly, by taking that unconstructive stance he is betraying the many Canadian businesses and individuals who actually care a lot about our trade relationship with the U.S. as they are being harmed by the current lack of certainty with our most vital trading partner.
As for the Ottawa-Alberta deal, an MOU is a baby step at best. It’s hard to blame Smith for being pleased about this, as her province has been starved for any hope of oil development for years under the Trudeau Liberals. For the last decade, those Liberals presided over a serious decline in Canada’s economy and standard of living, in part because of the kneecapping of our vital oil and gas sector. However, when all the caveats around the pipeline deal are taken into account, it is hard to be too optimistic.
The bottom line is that any other country would not be tiptoeing around the possibility of building a mere one pipeline but would be going gangbusters to develop a number of pipelines to take advantage of the resource wealth Canada enjoys and boost the fortunes of its citizens. Other countries such as the U.S. have developed multiple pipelines over the past few years to satisfy booming global demand while Canada has sat on the sidelines and suffered the negative economic consequences. It’s always great to be optimistic, and all Canadians should hope this pipeline does indeed come into being, but at this stage the negatives look far more compelling than the positives.
She has published numerous articles in journals, magazines & other media on issues such as free trade, finance, entrepreneurship & women business owners. Ms. Swift is a past President of the Empire Club of Canada, a former Director of the CD Howe Institute, the Canadian Youth Business Foundation, SOS Children’s Villages, past President of the International Small Business Congress and current Director of the Fraser Institute. She was cited in 2003 & 2012 as one of the most powerful women in Canada by the Women’s Executive Network & is a recipient of the Queen’s Silver & Gold Jubilee medals.
