For three years now we have heard energy industry, economists and the investment community warning ad nauseam that government regulation and lack of action is going to force much needed foreign investment out of Canada. They complained that major global businesses were leaving because of politics, not economics. They complained that foreign capital was going to flow out instead of into the country if we kept letting environmentalists hijack the country. The PM and his energy/environment/finance ministers amongst others in the Liberal government insisted it was suddenly economics that was killing major infrastructure projects. Well last Sunday Kinder Morgan finally called them out. The first company with a significant influence on our economic future to call it like it is. It is politics destroying our economy and that is undisputed now.
But why did we know and yet the entire Liberal government didn’t know this crisis would develop? Because they knew and ignored its importance. Because supporting the energy industry undermined their environmental initiatives. But as long as there was no significant escalation, the Liberals could sneak their way through to the next election without accomplishing this weak assurance that the pipe would be built. I mean in the next election, who would vote against them for that? Alberta and Saskatchewan? No problem!
Well not so fast Butts, sorry I mean Trudeau. Now there is an opposition to your plan. The conservative minded across Canada do have a voice. You have not heard from this group much as yet. It does not just blurt out at any chance it gets. It quietly sits by and lets ideas around social advancements be forwarded and even implemented. Many times it goes along regardless of disagreement. It sits quietly by and lets actors, musicians and drama teachers redefine social license. It assumes that ‘rule of law’ is not just three random words in a sentence. Well the problem is that now your plan is on the verge of destroying the Canadian economy. It has got to a point where this quiet voice is speaking out. Calling you out.
So the growing discontent is too great to ignore. Our fearless leader has decided to call a meeting with Notley and Horgan. But why was Notley at the meeting? Shouldn’t Trudeau be demanding a meeting with his dissident little child Horgan alone to explain the nasty punishment he will get from the Federation if he doesn’t come around?
Instead he is coming home from another of his ‘excellent adventures’ (against his desire as recent as Friday) to meet with both Alberta and BC premiers. But what could Notley possibly contribute here? Isn’t her position well documented now? It is pretty black and white. According to Trudeau, his governmentt stance is aligned with Alberta. So why Notley?
Were any of them really qualified to be having this ‘meeting’ anyway?
None of these individuals in this ‘meeting’ have given the public any confidence around negotiating in the countries best interest around business or economics. I’m not just referring to the energy industry when I say ‘business’. Just look at the egregious, desperate vote getting bailouts for Bombardier. I won’t even talk about the hypocrisy associated with that vs. the clear opposition for the energy industry.
Even Notley is not excused from being blamed for this disaster. One of her more recent blunders is how she blurted out the idea of government investing in the pipe. Wait a minute? Is that really the best tactic of negotiation with Kinder to get them back on side in this time of crisis? Are we not basically saying ‘Don’t worry Kinder, if we can’t figure something out to satisfy you, we will make sure it happens by investing in it ourselves.’ So then Kinder can go to their global investors and say that regulation became so onerous in Canada that they could not make the pipe work. But the government still went ahead and built it and nationalized it. Nice! That puts us somewhere between Argentina and Venezuela as places to invest in the future.
To quote my six year old here…duh.
Come to think about it, maybe Notley needs to be there to be the closest thing to a supporter for the pipeline and the energy industry. Is she the one that will call out Horgan? He is clinging to a concept that is not even accepted by multiple chambers in BC! He is clinging to a job that will end abruptly if he loses his battle. It reeks of an entrenched management team fearful of having to look for another job if they sell. Horgan is blowing in the wind alone here yet our federal government is going to let this single tree in a field bring our entire Federation to its knees.
Ultimately there is only one outcome that will satisfy foreign capital. It needs to see that we have started to rebuild our unstable and brittle economy. It needs to see that our federal government stepped in and used all means to give Kinder complete confidence that they can get back to building the pipeline expansion without any interference from dissident provinces or illegally funded and misguided environmentalists. They have to do this by May 31. So Trudeau I suggest you cancel any other hob knobbing and globetrotting for the next 45 days because the country is about to come apart on your watch. Something we have not had to deal with since…well since your dad was in office. Huh.
Rafi G. Tahmazian has more than 27 years of oil & gas, energy banking and investment management experience. He is currently a Director and Senior Portfolio Manager with Canoe Financial.