It is conventional wisdom that in any election, there will be winners and losers. So where does Canada’s oil & gas industry – and the millions of people relying on it – stand in the aftermath of the Liberals’ landslide?
Win or lose is a matter of perspective. The oil & gas industry needs pipelines. In the person of Prime Minister Harper, the industry had an unequivocal supporter. While every serious contender to some varying extent touted their support for Canada’s resource sector, it was only Mr. Harper whose support was not qualified with an iteration of “but.” Seen this way, the Conservative relegation to the Official Opposition is a loss.
So the question is what happens now that Mr. Trudeau will be asked to form Canada’s next government?
There is some silver lining. With a strong majority, there is reason to hope that Mr. Trudeau’s party will adopt a moderate course, rather than pander to leftist legislators as likely would have been the case if the NDP were in a position to make or break liberal legislation.
Indeed, the election returned the NDP to the political wilderness, with the party having lost its prized Official Opposition status. Considering that, up until a few weeks ago, polls showed that there was a real chance of the federal NDP repeating its Alberta counterpart’s success, its severe reversal of fortune is striking.
Alberta Premier Notley, while putting a brave face on Mr. Mulcair’s loss, will no doubt take stock of this popular rebuff to her party’s ambitions. From its first days, her government campaigned for Mr. Mulcair. With that campaign failed, job creators will not have to face an ideologically emboldened provincial NDP, backed by its fellow travellers in Ottawa.
Additionally, the electoral results in overwhelmingly blue Alberta proved that voters were unhappy with the provincial PCs, not adamant believers in the NDP. Premier Notley’s win reflects a protest vote coupled with vote splitting among the right. The results should signal a need for caution and restraint on her part.
Finally, the impetus behind electoral reform – a long-term political threat to the industry – has been severely eroded. Espoused currently by a section of the left, the argument goes that Canada’s First Past the Post (FPTP) system does not allocate seats in proportion to each party’s respective popular vote. Electoral reform is an attempt to change the rules of the game to favour less popular parties, like the NDP and the Greens, at the expense of more moderate popular parties, like the Conservatives and the Liberals. Neither the industry nor Canada’s interests lie in anti-business and anti-capitalist rhetoric being given the means to become anti-business and anti-capitalist action.
In practice, proponents of electoral reform would often buttress their position with a variation of “60% of Canada voted for someone other than Mr. Harper” while ignoring that this 60% could not agree on an alternative. The Liberals are now in the same position, with more seats than their proportion of the popular vote; the respective results put them at 54% and ~40%. It hardly seems likely that Mr. Trudeau will be in a hurry to undermine the very same system that enabled his landslide win.
So there are factors indicative of moderation. Nevertheless, uncertainty remains.
An outside observer might view this neutrally, but from a business perspective, such uncertainty is troubling. It abounds as to bottom commodity prices, the timing of pipelines, and the cost of carbon-pricing.
Another uncertainty is Mr. Trudeau’s intentions. His Liberal Party’s nebulous centrism won it wide appeal throughout Canada, but it also serves to cloud the Party’s plans.
Thus far, Mr. Trudeau appears a qualified supporter of the oil & gas industry. The scope and degree of that qualification depends ultimately on his actions, not his words. To be sure, Mr. Trudeau claims that his policies are necessary for the industry to prosper in the 21st century. That is a hopeful spin.
Moreover, the Liberals made a lot of promises to an exceptionally diverse voter base in this election campaign. It is conceivable that Mr. Trudeau could gain political capital in some places at the expense of the industry, particularly in regards to the timing of a presidential veto on Keystone XL. Contrariwise, he could gain legacy points by disproving opponents who claim that Mr. Trudeau is a repeat of his late-father, who is chiefly remembered in western Canada for his alienating energy policies.
And that is exactly the problem. Mr. Trudeau is positioned in such a way that he can and perhaps will have to back down on some promises. Put differently, his interests are all over the place, in some circumstances potentially in alignment with those of the resource sector, and in some circumstances running against those interests.
In short, Mr. Trudeau remains an enigma. That leaves the industry with a wholly unsatisfying “time will tell” regarding Mr. Trudeau’s intentions.