With the recent introduction of Erin O’Toole’s new shadow cabinet, there has been a change of Energy Critics in Ottawa. Transitioning MP Shannon Stubbs, who served as the official opposition Shadow Minister for Natural Resources since her election in 2015, shared her comments with The BOE Report on the challenges to the Canadian energy industry over the last five years.
When the world’s largest sovereign wealth fund divested from four Canadian oilsands companies in May 2020 over concerns about carbon emissions, the industry was quick to respond and stated the exclusion did not account for the industry’s efforts to reduce emissions in recent years. There was a strong statement from Cenovus president and CEO Alex Pourbaix that “pulling investments from the oilsands and claiming it’s for climate change reasons is more about publicity than fact.” At about the same time, a few European banks had also pulled back from lending to the industry. Commenting on the divestment, Prime Minister Justin Trudeau disappointed the industry with his tacit support of the move saying “We’ve seen investors around the world looking at the risks associated with climate change as an integral part of investment decisions they make…There is a need for clear leadership and clear targets to reach on fighting climate change to draw on global capital.”
Not all the voices in Ottawa were behind the PM’s pronouncement and many of those voices did not get wide media coverage, including then Energy Critic, MP Shannon Stubbs. She recently commented on those pronouncements in an interview with The BOE Report:
“ My frustration with those announcements is that they don’t reflect the reality of the work that is being done in the oil sands and the energy sector in Canada. Progress is being made from water use to emissions control and reductions, to energy intensity & efficiency, to the whole suite of respecting labor and human rights and partnerships with indigenous people and communities & companies as owners in the resource. In every measure, Canada – led by the oil sands- is the best in the world. I am often perplexed at the mismatch between those opinions versus the comprehensive benchmark analyses done by organizations like Worley Parsons. Three separate times, they compared Canadian energy development to the other top oil and gas producing countries around the world. They concluded substantively and repeatedly that on every measure, from regulatory analysis through performance and outcome that Canada is best in class”(as reported in CAPP’s 2017 Report )
Many working in a financial capacity in the energy industry have shared an opinion that the exclusion of Canadian oilsands by the large global investment funds is merely a public rationale for a decision that is based on a lack of regulatory certainty for investment in Canadian projects. Stubbs says some have voiced this sentiment to her. As the Canadian Energy Pipeline Association stated in 2018 “CEPA does not see anything … that will attract energy investment to Canada” due to the regulatory “poison” enacted by Canadian governments -Bill C-69 and Bill C-48 -the tanker ban off the British Columbia coast, proposed methane emissions regulations, provincial greenhouse gas emissions regulations, and lack of clarity on Indigenous rights to name a few. The assertion is that Canada has an ROI-return on investment issue and after examination, the conclusion is that investing in Canadian companies and projects lacks certainty. This leads to the question- Can we normalize the energy discussion in Ottawa- to recognize the importance of reliable project approvals and the importance of energy security and affordability? Shannon Stubbs explains she has made these points a guiding priority in her work on the natural resources file since she was first elected.
‘It is so key for people to know that big multinational companies or even mid-sized companies and homegrown Canadian companies who are making significant long-term investments need certainty, predictability, fairness, and clarity in the regulatory system. They are choosing other jurisdictions where their investment is welcomed- where they know the measures that they need to make, the timeline is going to take, the money it’s going to cost, the resources that will be required, and know that once the analysis and measurement of their project proposal is approved that they will be able to go ahead build it and get it done. They will cancel their project and move their investments and create jobs in other jurisdictions where project review and approval is done efficiently and effectively. Repeatedly, cancellation of projects over the last five years indicates a lack of confidence in the Canadian regulatory system.”
Stubbs sees even more uncertainty developing in the Canadian policy framework- the regulations for C-69 are still under development. The new Clean Fuel Standard which the Montreal Economic Institute reports is “a major economic and ecological mistake in the time of COVID-19” is unprecedented globally and due this fall. She thinks these new developments combined with existing legislation demonstrate a government hostile to industry. She cites an example-the offshore drilling ban in the North, Bill C-48 which allows foreign tankers but prohibits tankers that would export Canadian oil out of a port which would necessitate a pipeline to be built to the corresponding coast. She feels it is obvious that barring pipelines to the coast is the intent of C-48. As a result, the industry and investors take note and are going to other jurisdictions where they can find predictability, fairness, and certainty in the regulatory system. Stubbs notes that Canada has performed well in the past– both under the Harper government and under previous governments, because analyses were done comparing Canada at all levels of the regulatory system- everything from expertise, environmental regulations, standards, rigour and vigour of regulatory analysis incorporation of traditional knowledge, indigenous engagement and community engagement. She states that on every measure, Canada was ranked as at the top of the class in the top ten oil-producing countries in the world. Canada, to an extent, has already proven that you can have an effective, efficient regulatory regime and maintain the highest standards in the world according to Stubbs.
“Another part of the evidence about Canada’s regulatory track record is that the NEB was an expert authority and renowned as an energy regulator in terms of its knowledge base, institutional knowledge, and technical knowledge. I worry about the scope and scale of walking back the damage that has been done to its reputation over the last five years. I was dismayed that every time the Liberals made statements like “Over the last ten years the Harper government gutted environmental regulations or water regulations”- they were attacking the regulator. The Prime Minister and his ministers repeatedly asserted that the NEB was “broken” and in need of “modernization” and intimated that Canadians didn’t have confidence in the NEB.” I would argue that there was no evidence for that claim”
Indeed, immediately after the election in 2015, Prime Minister Justin Trudeau instructed his natural resources minister Jim Carr to “modernize” the NEB, supposedly “to restore public trust in federal oversight of major energy projects” and created a panel to consult with Canadians. References to “confidence “and a lack thereof seem to have had origins with environmental and activist groups. Indeed, over fifty activist groups started media, social media, and letter-writing campaigns to shut down the NEB claiming the “federal review process of energy projects needs to be shut down and overhauled immediately.”
The messaging certainly was amplified by media outlets such as CBC News who commissioned a poll to prove “ most people have little or no confidence in the National Energy Board (NEB).” Over a year later the Trudeau government-appointed panel made recommendations to scrap the NEB. which oddly enough was reported to be based on “feedback from nearly 200 people” – an extremely small sampling and hardly a thorough consultation with Canadians as promised in November 2015. With scant evidence to support the claim, it was repeated and restated so often in media and social media that Stubbs feels it would be hard to reverse the damage done to Canada’s reputation and to the regulator.
Stubbs commented on the further damage created by Bill C-69- that stakeholders and the local communities directly impacted by a project were not given greater consideration in the project review process and that funded activists living outside of the country would have the ability to drown out the voices of Canadians living next door to development- a sentiment echoed in a 2018 CAPP report.
“That was one of the most damaging changes in C-69, they opened up interference in the regulatory process to anybody. Previously, either you had to be local and directly impacted by the project, or you had a certain specific skill set or knowledge that would aid the board in making their decision. People should be concerned about the effect on the voices of locally impacted Indigenous communities. Communities that worked so hard for years and years with companies (like Kinder Morgan) to come up with mutual benefit agreements to create training, jobs, commitments, and financial agreements, and now we’ve got a regulatory process where potentially groups 5,000 km away from the community are just as important as the voice of the community directly impacted by the project.”
As Shannon Stubbs reflects on her experiences of the last five years, she calls for serious work to welcome natural resources and oil gas investments in Canada, saying there will be no reliable path for economic recovery without the natural resources sector being a destination of choice for businesses and jobs. She now has a key pandemic position in O’Toole shadow cabinet as the critic for public safety and emergency preparedness, which includes the decisions on how to reopen Canada’s border with the United States and manage travellers from other countries with MP Greg McLean taking on the Energy Critic role as the Shadow Minister for Natural Resources and Canadian Northern Economic Development Agency (CanNor).
Maureen McCall is an energy professional who writes on issues affecting the energy industry.