Thank you for finally getting to the meat of the issue. We cannot succeed as a country if we operate as 10 provincial countries and 200 indigenous countries. Not only can we not succeed in that environment, we aren't even really a country at all in that environment.
Genuine question: Do you think Canada can roll back the clock on Indigenous co-sovereignty without blockades or worse? We don’t normally contemplate an actual violent insurgency in peaceful Canada but is it really so unthinkable? Oka, Caledonia, and Idle No More weren’t that long ago. We also had separatist violence here with the FLQ and Europe has obviously seen far worse (IRA, Basques).
This is the single biggest issue that will make or break Carney’s government, and maybe the very survival of Canada. Dealing with Donald Trump is easy in comparison.
Not unthinkable at all. All the recognition and ransom payments didn’t start until after the Mohawk warriors held the Canadian army to a stalemate at OKA. Prior to that the Canadian government attitude to its “Indian” population was one of benign neglect. My suspicious mind has always wondered why band chiefs can recommend band members for firearms licenses while the Government is busily disarming the rest of the Canadian population.
The Mohawks didn't hold the Canadian Forces to a stalemate at all. If anything, it was the Surete de Quebec that was stymied. The Canadian Forces set up a line opposing the barricades, left time for negotiations to take place, and when they decided to, they rolled forward and took out the barricades. No shots fired, nobody harmed.
You are correct. There was no stalemate or climbdown by the Army. After a decent respectful interval for the politicians to finish doing their thing, the soldiers moved in and dismantled the barricades.
The photo John is referring to is not one of stalemate. Odd that it would be remembered that way. A young professional soldier holding his ground calmly while the disheveled American Mohawk who used the nom de guerre “Lasagna” was in his face jumping up and down whooping at him trying to rattle him. The thug just looked like a goof. That was all theatre. My Dad and I were watching on TV. He said, “If there’s going to be any shooting it’ll be today.” The Army moved not long after. Hold my beer.
Thanks for the clarification. This diverges from my interpretation of media reports at the and but these reports may have been less factual and more editorial. The overwhelming image was a Canadian soldier head to head with a Mohawk warrior. The only pearl I remember from the Quebec police role was the undenied media reports that the Quebec police fatality was from friendly fire.
Great question Geoff. I think Canada needs to roll back the co-sovereignty approach to reconciliation. But it must double down on reconciliation in other ways. I think the pain and injustice that first nations people experience is real. The history is real. And it's not even just history. Many people alive today are still experiencing the impacts from this history. But co-sovereignty is wrong on several levels. It not only makes us ungovernable as a country, but it also builds a governance and rights framework based on ethnicity. If the inability to govern doesn't tear us apart, an ethnically based society enshrined in our constitution will one day turn us into the Balkans. Its not the right path. I believe reconciliation would be better served by focusing on outcomes not building division. How about instead of all the platitudes and endless pandering and apologies, the government simple sets some targets and builds action plans around education, access to healthcare, employment and income per capita, so that first nations people achieve similar outcomes to non first nations people.
"Roll back" implies going to a more racist framework, where a white majority made decisions without consideration of minorities. That's bad and we shouldn't do it.
At the same time, "I have these rights because I'm [race x] and [race x] has special powers to determine what Canada does and does not do" doesn't work and is morally wrong.
This is obvious to all if [race x] is "WHITE PEOPLE".
It needs to become obvious that it's similarly unacceptable and workable if [race x] is "Indigenous people".
Where have we endorsed co-sovereignty that we would be rolling back? Or does Sean Fraser’s hasty retreat from “not a complete veto” when the Chiefs shouted, “Oh yes we do so have one!” count as endorsement?
I guess we’ll have to find out. But we may never. Industry is watching. No one is going to invest in a resource project where the regulator doesn’t actually have the power to approve a project — some other sovereign entity does and it might change its mind if a new gang of caudillos takes over. Fuck that action.
So we might enter a long period of inter-racial calm. No resource projects, no new subdivisions, no nuclear power plants, no high-speed rail...no conflicts.
Leslie, you say, in part, "... No one is going to invest in a resource project where the regulator doesn't actually have the power to approve ..."
I very respectfully think that understates the reluctance of industry. Previous pipeline proponents have invested billions - a plural figure - to see the various proposed projects fail. If you go back to the 60s and 70s you see that the proposed Mackenzie River project fail due to widespread opposition and doubts about the environmental affects, right up to the last decade where Northern Gateway and Energy East, etc. failed, primarily due to governments giving in to the agitprop industry.
Clearly, the most recent projects needed to work on the "consultation" aspect but please recognize that the latter two, i.e. Northern Gateway and Energy East, did a great deal of consultation. The courts decided that the consultation that was done was insufficient although it met the existing standards of the time. Simply put, the courts made up new standards and/or interpreted the old standards in a new way. Fair enough. That is what courts often do. And the feds had the legal right to consider those court decisions and to agree or disagree with them.
In those two cases, however, the political actors, primarily the federal government but also provincial governments, ran scared from the enviro / aboriginal / political movements and either withdrew previously (at least inferred) support. In the case of the latter two projects, the feds actually banned tankers from the BC coast and made statements about the "social license" (Energy East). The proponents (Enbridge and TransCanada, respectively) saw the writing on the wall and realized that there was no "economic case." Hah! No economic case! Sure, build a pipeline but you cannot pump oil to tankers that cannot take on that oil! Sure, build a pipeline but you cannot pump oil if the province across which the pipeline crosses wants to stop you! No revenue, no economic case.
So, all this is a long way of saying that, no there isn't anyone putting forth a pipeline proposal. No sane corporation will expend the money to develop a proposal when the tanker ban is in place and neither will any sane corporation expend monies when the feds are afraid to take on - particularly! - La Belle Province. So, no proponent exists or are likely to exist without the feds taking actual concrete steps to encourage such a proposal.
At some point if national quality of life continues to decline Canadians will elect a populist government that runs on a platform of directly confronting First Nations on this stuff.
I really hope we can get to a grand bargain before that. A test of Carney as a statesman.
Try 634 recognized indigenous bands. Plus the Inuit and Métis. Some bands have hereditary chiefs, some have elected chiefs, and some have both. Plus 3 territories. Are we a country yet?
It’s interesting that the federal government can’t approve or support any pipeline without provincial or aboriginal agreement, yet the federal government have raised (passed?) legislation to ban the sale of ICE automobiles within 10 years. I can’t imagine in any reality that the Ontario provincial government agrees with this policy. The results of this mandate will encourage the auto manufacturers to move elsewhere, where governments aren’t trying to control what they produce or sell. Yet - here we are 🤔
In the years since TMX was approved over the objections of one indigenous band (and over the objections of the then-Premier of BC) as Mr. Breakenridge (edited to correct spelling) describes, Parliament has passed legislation to “enshrine” UNDRIP. Retired lawyer Andrew Roman says it doesn’t change any individual law until that law is amended by Parliament to take UNDRIP’s implications into account. No law has been so amended.
However, nothing stops the Supreme Court from deciding a case *as if* UNDRIP modifies the relevant law being cited in the case before it. It could simply say, “Yes, the plaintiff — it might be just one band, or even just one guy—can block this project from happening without its/his consent because this is how we interpret Parliament’s intent when it legislated to enshrine UNDRIP.”
The progressive activist Supreme Court loves to discover group rights and Parliament’s passage of UNDRIP might offer it a golden opportunity to discover a (huge) new one. Effectively Parliament and Cabinet could be made subordinate to an unelected, race-restricted oligopoly that can veto anything that “affects” them.
And short of amending the Constitution to emasculate the Supreme Court, there won’t be a damn thing Canadians can do about it. You can see why Prime Minister Carney is hoping for consensus on everything....or rather why he wants to do nothing where he can’t get consensus.
Since in most cases indigenous vetoes could be bought off with enough money, projects could still get built but much of the return on investment would be siphoned off as rents to every band who wanted to play.
Carney employs many weasel words in significant parts of his grand announcements which while giving the appearance of support for infrastructure programs actually leave him room to quash any projects which don’t agree with his ideology. In other words we continue on with the Trudeau led Liberal programs of the past 10 years.
If the Trudeau legacy continues Canada is screwed. There is almost no one on the Liberal voting base that will support any sort of traditional energy project. The only possible savior is the Sovereign bond rating community that Carney listens to. If Carney is advised that Canada will be swimming in the same financial toilet as Greece, Spain, Argentina and the like, he might stand up on his hind legs and cause some stuff to get done.
I'm one. I voted Carney, support Energy East, and pumping every barrel and cubic metre we can. I'd like to ship all of it by rail until an eastern pipeline is built to get the product moving now. Max out TMX volume too. We need the revenue. But let's use it for something useful.
1) Not sure how much revenue "we" will get to spend on "useful" things, by which I assume you mean public funding of social justice programs. The profits, if any, from a pipeline or any other big project other than a nuclear power plant will go to the investors, not to spendthrift governments. Yes the corporation and its contractors will pay corporate income tax and their employees will pay personal income taxes on their wages and salaries -- that ain't nothing -- but the main reason for building pipelines is to help the larger economy achieve its potential, not to create a direct cash cow for governments. If you want the government to reap profits directly, you need to create a profitable Crown corporation like, let's see.....Canada Post? VIA Rail? The CBC? TMX?
2) After Lac Mégantic I doubt there is much enthusiasm for shipping petroleum over rickety corner-cutting short-line railways from Montréal to Saint John. The refinery in St. John handles light volatile crude (as from Saudi and the Bakken Shale) which is why the town got incinerated so thoroughly. Is Irving interested in re-tooling it to take heavy crude from Alberta? To its credit, CP is making some investments in Maine and the Maritimes after abandoning its entire system east of Montreal 35 years ago. But if there was going to be a plan to ship Alberta oil by rail it would seem most sensible to ship it down the Mississippi to refineries on the Gulf of America where both CN and CPKC now have seamless through routes on their own Class 1 track from Winnipeg. (This also makes both railways blockade-proof.) They don't really need the East anymore. And maybe Alberta doesn't, either.
Shipping oil by rail is not something the railways are going to be interested in investing in unless it's for the long term. A stopgap it definitely isn't, unless you can do it on the cheap with junk track, junk locomotives, and junk rolling stock you have lying around rusting....and that road led to Lac Mégantic. A hell of a thing that was.
Leslie, just a quick point. You point out that "... The refinery in St. John handles light volatile crude .."
I concede your point - can't argue with accuracy - but was not Energy East to bring heavier Alberta grades to the east for shipping but also that Irving was going to retool to be able to process that new stream? That is my recollection; I have not gone back and researched the old news stories.
Could be. I suppose that must have been the plan. At the time of the disaster it was taking Bakken Shale oil (that train originated in North Dakota.) It does show how many moving parts Energy East involved.
I would love it if just one leader in Canada would take a proper (and defensible) position, and then defend it rather than cave in the face of public backlash. If you're factually correct - bring the people onside. It's not undoing years of reconciliation work to accurately talk about the duty to consult. That is just drama from people who don't understand how the duty to consult works - so give them a mini law lesson. Provide links. Help them understand that no - rolling over and giving groups EVERYTHING they ask for is not going to further reconciliation, it will just impoverish the rest of the country.
At some point if we don't get productive, we will lose corporate interests, and the resulting taxes that come from projects. If the government lacks money, those indigenous groups suddenly aren't going to be getting much for treaty rights and many social programs would suffer. What takes hundreds of years to be built, can actually be destroyed fairly quickly through incompetence.
Indigenous groups take the position that their funding and court awards are a first call on the the Canadian economy and the primary function of the Canadian state is to make sure this funding flows forever, with periodic increases as the Reserve populations increase. That we will have a harder time affording it if our economy sputters is just not relevant to them. Find it somehow. Cut health care, education, and OAS and don’t buy F-35s. Borrow it if you have to.
Think of it as like alimony. You don’t get a break if you have to take a lower-paying job. Pay me first, says your ex. How you pay your rent with what’s left is not her concern.
As always, it will come down to the fact that the LPC believes that whatever is good for the Liberals is therefore good for Canada. So expect that the lack of western Canadian LPC votes will provide the decision on this.
I’m going to say something that might sound crazy - but if Carney approves a Western or Eastern pipeline under his “National Interest” exemption, he will win the Liberals 20+ additional seats West of Winnipeg, and they will romp to a majority 18 months from now.
We forget that Carney won the election running on basically the Conservatives platform. If he hadn’t run on this, we’d be discussing Prime Minister Pierre right now. For him to not come through on that platform would be political suicide. The Conservatives would eat up the very large part of his centrist coalition that balked due to Trump, and the NDP would tear him up on the left.
The Liberals can win seats in the West… if they govern like Conservatives. And there are more and more seats out that way all the time.
We should be under no illusions that Carney will waste any political capital to endanger reelection chances. After all, he is a Liberal leading a minority government and Liberal politics are always paramount to the national interest.
Brian Mulroney bet his political farm to get a free trade agreement with Reagan, upsetting a lot of central Canada voters in the process. In a modern context, would Carney risk his Laurentian base on the alter of another pipeline to the west coast or from Alberta right through Quebec because it was in the national interest? I highly doubt it and western Canadians who think that there is a glimmer of hope are going to be on the outside looking in. Again.
I don’t agree Darcy. The Liberals Laurentian base was cracked by the Conservatives in the 906 this last election. They lost seats in Ontario. The Liberals path to a majority does not lie in their traditional base - but rather runs through the West. We forget the nation overwhelmingly supports a National pipeline - and this includes Quebec, he would not be expending political capital, but rather building it by coming through. If Carney gets a pipeline approved either East or West under his National Interest Act. We will see a Liberal majority government with very strong Western representation
Thanks for publishing this and addressing the elephant in the room head on.
Dealing with Donald Trump is easy compared to this.
This issue of having 634 veto points for projects, and the broader question of co-sovereignty with Indigenous Nations vs. a sovereign Canadian Crown that has a Duty to Consult, is **the** make-or-break issue for Carney’s government, and maybe for the very survival of Canada.
The fundamental premise of environmental assessments is that there is an acceptable trade-off between environmental impacts and the potential benefits delivered by projects, and that risks can be mitigated to an acceptable level. The problem is an environmentalist movement that tends to reject both premises: no amount of environmental impact is acceptable, and any risk is intolerable. The protracted approval process and court reviews are simply a tactic by the environmentalists to rag the puck, increase the costs for project proponents, and hopefully defeat the project. It's not actually about achieving compromise.
Politicians have been using the environmental assessment process to provide cover, much as they hid behind public health officials during the COVID pandemic. Instead of making decisions, they point to the outcome of process and recommendations of experts. When they still find they're criticized, they add more process in attempt to appease their critics.
The approach that's needed is to simply define the objectives and boundaries of the environmental assessment process in law, follow the process, and then support the outcome of the process as the final decision. A clear law minimizes the potential for a protracted legal process. Setting clear terms for the process limits scope creep. Making it clear that the process and its outcome *is* how consensus is achieved clips the wings of the malcontents who try to relitigate losing arguments over and over again.
This is the issue which will bring Carney down and expose him as the Trudeau Liberal (DEI, climate crisis, shut down the oil and gas producers) he really is. The Poilievre will have be clever, adopting a more statesman like tone and manner. Poilievre lost the election in large measure because he alienated too many liberal voters by being perceived as nasty and always on the attack. He lost them emotionally, on their feelings, not on what needs to be done. The demographic he has to sway are solidly middle-class, university educated, older women who are largely lifelong Liberals. Carney has already stolen most of the important Conservative proposals without upsetting this group through very careful and ambiguous language. This cannot last for long. He needs to be backed into a corner, but "nicely", with reason not personal attacks.
This is EXACTLY what I've been fuming about (and constantly commenting-about online) ... ever since it became so painfully/publicly obvious. Weasel words!
I read today that this bill has also now excluded the ability to ignore the Indian Act when in pursuit of projects deemed to be critical to the country. So this puts us back on square one as to my knowledge the 'requirement' to consult with FN scuttled all of the projects in the past. We need someone in the government to actually challenge this Supreme Court decision to clarify that yes, we need to let the FN's know what is going to happen but that is all. Is there anyone in the federal government who is on the side of citizens with this opinion (there are a lot of us).
You can’t challenge a Supreme Court decision. They have the last word. You have to amend the Constitution but the First Nations effectively have a veto there, too.
Leslie, in a limited sense you CAN challenge the Supremes.
When the Supremes have bloviated on something that is asserted to be a particular way because of "rights" asserted to exist due to the Charter of Rights and Freedoms you can actually use the Charter in response. Specifically, the notwithstanding clause is an integral part of the Charter so that can be used and is, oh, so to say, Charter-proof.
Oh, but the courage to do so? Not in this lifetime, not with this government.
Ken, only if the right being asserted is found in the Charter of Rights and Freedoms, like freedom of expression or a right to privacy, for instance. Aboriginal rights are contained in Section 25 of the main text and in the "Honour of the Crown" in the Preamble. Those are part of the basic Constitution and can't be over-ridden by invoking the NWC. If the Supreme Court says a law is unconstitutional because it infringes some right it invented from Sec. 25, (which is pretty vague and allows almost anything), that's it.
(A long time ago you could appeal a Supreme Court decision to the British Privy Council in London. I *think* the western provinces won their control of resources through that route -- and you might have been the one who told me about it.)
Leslie, that is why I said it is a limited sense that you can challenge the Supremes.
As for Section 92A which gives the provinces rights over resources that is in the Constitution Act which replaced the original British North America Act. The rights to resources were allocated to the original provinces under the BNA Act but when Alberta and Saskatchewan were created in 1905 (and Manitoba, which was created in 1870) the feds took the position that that allocation did not apply to the new provinces. [No one had any idea about oil and gas but the feds dearly wanted to control coal and any other minerals.] Alberta was pissed off and sued. It took many, many years to wind it's way through Canadian courts, appeals, counter appeals, etc., etc. and then, yes, it did end up with the Law Lords in the UK. The result was that in 1930 the feds and the provinces executed an agreement pursuant to the federal Natural Resources Transfer Act wherein the feds agreed to back off.
You may (or may not - I do) recall the energy wars of the 1970s and 1980s which culminated with the National Energy Program. Prior to the NEP being brought in T1 wanted to re-patriate the Constitution and initiated talks with provinces to do so. The result was the current Constitution Act of 1982. That document includes Section 92A which EXPLICITLY allocated responsibility for resources and development (very broadly defined) to the provinces. Peter Lougheed would not sign off on re-patriating unless and until that section was included simply because of the bad faith from the feds starting in 1870, continued in 1905 and further continued in the 1970s and 1980s energy wars.
Incidentally, one of the very, very consequential items of the energy wars was a provision from (memory here) about 1974 wherein the feds changed how resource companies accounted for crown royalties: they made them absolutely non-deductible. It is a principle of income tax law that a business can deduct an expense that is incurred to gain or produce income; that applies to any business in Canada, the US, etc. The feds simply said that henceforth (from 1974) no deductions for crown royalties; royalties paid to freehold landholders or to other oil companies continue to this day to be deductible but not crown royalties. The feds did that to ensure that taxable income upon which income tax deducted is calculated was higher so the federal tax take was much, much higher. Simply put, the feds felt that Alberta was becoming too wealthy and they wanted to stop that - they admitted it publicly.
Why do I speak about that tax issue? Well, it fits in with the federal attitude that resources are theirs but it also shows that the feds use all sorts of laws to ignore the constitutional allocation of responsibilities. Which, again, is why Peter Lougheed wanted Section 92A in the Constitution Act. No 92A, no signature from Alberta. Unfortunately, the feds continue to use the Income Tax Act to ignore the allocation of responsibilities. And that history is why I don't and won't trust the federal government.
One final thing. You could appeal your legal case to the Law Lords in the US until 1949 when the Supreme Court of Canada became the highest court of appeal. From the date, I presume that the required amendment to the original BNA Act to make the Supreme court, well, supreme was also the same amendment which admitted Newfoundland to Confederation.
Determined opposition to a project adds risk. Building consensus, i.e. making sure the major organized groups are invested in the project’s success, helps ensure a win. It’s the best way to execute a project. It’s way too early to be talking about forcing projects down people’s throats. We should make a solid effort on consensus first.
I wonder how much these early remarks about vetos are about setting expectations. “You can’t stop us….but yes of course, let’s talk about your concerns! How can we get you onboard?”
I have no qualms with the political analysis on display here but I fail to see how further development of O&G reserves does anything remotely close to "diversifying our markets".
Honestly, have we learned nothing from the sunk costs and abject failings of TMX? And don't even get started on the abject ludicrousness of carbon capture proposals (hint: those only work with incredibly high levels of public funds, to the extent that they even work at all, which they don't).
"I fail to see how further development of O&G reserves does anything remotely close to 'diversifying our markets'."
TMX means that Alberta can export oil to customers in Asia, like Japan, South Korea, and China, not just to the US. Given Trump's surprise trade war, TMX turns out to have been up and running in the nick of time.
If Albertans decide that they want to diversify their economy away from oil and gas, fine. But it has to be their own decision, not a decision that the rest of Canada imposes on them. https://russilwvong.com/blog/alberta-and-national-unity/
I won't fight Tombe's analysis on economic grounds (we subsidize fossil fuels to a ridiculous degree in this country), I'd rather point out that he did his analysis before Trump was re-elected and we were thrown into more volatility (which doesn't bode well for finding a future sucker-er buyer of the TMX pipeline) and that looking ahead to 2040 may be a bit optimistic https://oilprice.com/Energy/Crude-Oil/IEA-Doubles-Down-On-Peak-Oil-Demand-Forecast.html
Yes, I admit to prognosticating, but hey, that's also economic forecasting writ large, particularly as climate change unravels the entire future.
Lastly, I have no argument against Alberta's right to decide its own destiny (insert dead-eyed-thousand-yard-stare here), but only because that's a value judgment, and we're all entitled to those (mine being that the incineration of Fort MacMurray should have been a clear enough warning about all of this). That said, I appreciate that your writing acknowledges the realities imposed by climate change and the volatility of oil prices.
Just a shame that so few others are willing to do the same.
"I appreciate that your writing acknowledges the realities imposed by climate change and the volatility of oil prices."
Thanks. I follow Andrew Leach pretty closely - I really appreciate his perspective as someone who takes climate policy seriously while supporting continued oil and gas production.
An observation from Matthew Yglesias that seems relevant when thinking about Alberta and national unity:
"I think the broader 'rural rage' issue is that communities have real and perceived collective economic interests. You don’t need to work in a car factory to understand that the automobile industry is important to the entire ecosystem of Michigan. Rural communities tend to have natural resource extraction of various kinds — fishing, logging, mining, ranching, farming — at the core of their economic model. In a rural community, like any other community, most people work in local service industries. But the natural resource extraction is the export, it’s the thing that brings money into the community, it’s the reason the community exists. So when you adopt a regulatory posture that is hostile to the interests of natural resource extraction, people don’t want to vote for you." https://www.slowboring.com/p/voters-care-about-issues-even-lobstermen
I definitely find it easy to have sympathy when this kind of argument is invoked: I read Matt Huber's "Climate Change as Class War" a few years back, and while I didn't really enjoy it or find its central thesis compelling, it does add to the convincing case that broad and ambitious climate action needs to include the interests of the working class.
Sadly, it seems that this case tends to be commonly stolen and twisted to mean "continue to dig up as much oil as we can, but allocate 10% more for the PR budget and lobbyists" rather than "massive public investment in non-fossil fuel infrastructure coupled with ample support for retraining and social security to support people through difficult but necessary economic transitions".
I definitely know where I would have preferred the government to allocate 30-plus billion dollars, but alas, it remains a persistent failing of our elected leaders to exercise that kind of courage.
(I am appreciating this back and forth, let it be known!)
That analysis by Tombe is incredibly (as in, unbelievably) optimistic. It treats a financial filing as something you can take to the bank, when in reality a financial filing is something you wave at the bank to hold it off from taking you to bankruptcy court. To be fair to TMX, the filing contains lots of cautions to the reader that their optimism is based on nothing else going wrong in future. Even then it doesn't expect the pipeline to turn a profit until the 2030s when debt has been paid down some and not so much of the optimistically predicted revenue has to go to interest. It's Tombe's interpretation of it that I object to. I would like to see a sensitivity analysis with a more realistic discount rate of 3% instead of 8%. 8% may be a reasonable figure for internal rate of return for alternative uses of the capital but it is way too high to be a discount rate, which is something else.
I think he's pulling a sleight of hand with the debt numbers. He seems to be saying that the debt won't be on the balance sheet of whoever buys it. No way will the government get anywhere close to $34 billion for it. The tolls are too high. The shippers are going to be demanding a subsidy even if the tolls are cheaper than rail. If the government sells it, it will leave the debt for us to pay. No one will buy it with the mortgage on it. Will it be good for the economy as a whole? Well, probably, but other uses of $34 billion might have been even better, like leaving it in the pockets of us taxpayers.
Victor Davis Hanson I think nailed it. He says Canada probably can't get a better price by selling oil abroad by shipping it halfway around the world. The cost of that shipping is going to figure in the price, either us or the foreign customer will have to pay it. It is cheaper to ship oil next door and both buyer and seller share in that savings with a lower price.
it's all fine and good to hammer Carney and for Smith to go on and on about the need for a pipeline (esp to East coast). but until actually Corps step up and say we financially back this proposal, none of this means anything. this isn't "field of dreams"/build it and they shall come - you need guarantees of product and capacity before under taking this process. Should the Gov of Can get started on negotiating a pre approved "utility/resource transfer corridor" - sure that makes sense. but there shouldn't be any shovels in ground until there's 100 percent guarantees by corps.
Also seriously fuck Alberta - I live here and Smith constantly says that othe jurisdictions should just rollover for whatever pipelines and projects she wants - but she can't even hold accountable companies in her own province for their environmental liabilities/abandoned and orphaned wells and refuses to enforce or enact legislation to do so. Any more pipeline originating in AB under her support should be mandated for Alberta to
carry full liability for any failures and cleanup.
John, you want corporations to "... step up and say we financially back this proposal ..."
Corporations did precisely that in the last two decades with TMX, Northern Gateway, Energy East, etc. and look where that got them. TMX got the proponents bought out (at too high a price by an incompetent government) when the feds et al put up so many roadblocks that the proponents (KM) simply walked away and the feds panicked. Northern Gateway and Energy East cost the proponents billions. For that matter, KXL similarly cost well over a billion to the proponent, TC, but that was stopped - again, due to politics - in the US, not Canada.
So, the lesson learned by any intelligent C-suite is that unless the laws and processes are crystal clear there is nothing to be gained and everything to be lost in Canada.
I don't disagree w any of this. the uncertainty and delays kill projects and I also feel the "duty to consult" doesn't give any party an effective veto and those parties being consulted have to get their shit together: otherwise I have no probs w their objections being overridden. I also believe we need to a pre approved corridor to assist the momentum in corporate capital flowing to said projects. I'm just angry more as an Albertan when we have a premier saying we have to do thesee things as if the onus is on the gov to fund them.
Great piece. I have read author Nassim Taleb's many thoughts on the "Tyranny of the Minority". Canada is exhibit "A". Thanks to the embrace of Identity Politics by Carney's predecessor, Canadians have been sliced and diced into a post-nation state. How to put this "Humpty Dumpty" back together again after ten years of demoralization will be a challenge. Carney may be the anti-Trudeau but the debris field left by his predecessor is loaded with landmines.
So now we get to find out who Mark Carney really is. Is he the smooth-talking elbows-up nationalist who's prepared to take whatever measures are necessary to get things done, or is he the climate-saving, UN-backed, globalist central banker who is nothing more than a mealy-mouth diplomat. The rubber is about to meet the road.
Thank you for finally getting to the meat of the issue. We cannot succeed as a country if we operate as 10 provincial countries and 200 indigenous countries. Not only can we not succeed in that environment, we aren't even really a country at all in that environment.
Genuine question: Do you think Canada can roll back the clock on Indigenous co-sovereignty without blockades or worse? We don’t normally contemplate an actual violent insurgency in peaceful Canada but is it really so unthinkable? Oka, Caledonia, and Idle No More weren’t that long ago. We also had separatist violence here with the FLQ and Europe has obviously seen far worse (IRA, Basques).
This is the single biggest issue that will make or break Carney’s government, and maybe the very survival of Canada. Dealing with Donald Trump is easy in comparison.
Not unthinkable at all. All the recognition and ransom payments didn’t start until after the Mohawk warriors held the Canadian army to a stalemate at OKA. Prior to that the Canadian government attitude to its “Indian” population was one of benign neglect. My suspicious mind has always wondered why band chiefs can recommend band members for firearms licenses while the Government is busily disarming the rest of the Canadian population.
The Mohawks didn't hold the Canadian Forces to a stalemate at all. If anything, it was the Surete de Quebec that was stymied. The Canadian Forces set up a line opposing the barricades, left time for negotiations to take place, and when they decided to, they rolled forward and took out the barricades. No shots fired, nobody harmed.
You are correct. There was no stalemate or climbdown by the Army. After a decent respectful interval for the politicians to finish doing their thing, the soldiers moved in and dismantled the barricades.
The photo John is referring to is not one of stalemate. Odd that it would be remembered that way. A young professional soldier holding his ground calmly while the disheveled American Mohawk who used the nom de guerre “Lasagna” was in his face jumping up and down whooping at him trying to rattle him. The thug just looked like a goof. That was all theatre. My Dad and I were watching on TV. He said, “If there’s going to be any shooting it’ll be today.” The Army moved not long after. Hold my beer.
Thanks for the clarification. This diverges from my interpretation of media reports at the and but these reports may have been less factual and more editorial. The overwhelming image was a Canadian soldier head to head with a Mohawk warrior. The only pearl I remember from the Quebec police role was the undenied media reports that the Quebec police fatality was from friendly fire.
Great question Geoff. I think Canada needs to roll back the co-sovereignty approach to reconciliation. But it must double down on reconciliation in other ways. I think the pain and injustice that first nations people experience is real. The history is real. And it's not even just history. Many people alive today are still experiencing the impacts from this history. But co-sovereignty is wrong on several levels. It not only makes us ungovernable as a country, but it also builds a governance and rights framework based on ethnicity. If the inability to govern doesn't tear us apart, an ethnically based society enshrined in our constitution will one day turn us into the Balkans. Its not the right path. I believe reconciliation would be better served by focusing on outcomes not building division. How about instead of all the platitudes and endless pandering and apologies, the government simple sets some targets and builds action plans around education, access to healthcare, employment and income per capita, so that first nations people achieve similar outcomes to non first nations people.
A third way needs to be found.
"Roll back" implies going to a more racist framework, where a white majority made decisions without consideration of minorities. That's bad and we shouldn't do it.
At the same time, "I have these rights because I'm [race x] and [race x] has special powers to determine what Canada does and does not do" doesn't work and is morally wrong.
This is obvious to all if [race x] is "WHITE PEOPLE".
It needs to become obvious that it's similarly unacceptable and workable if [race x] is "Indigenous people".
Where have we endorsed co-sovereignty that we would be rolling back? Or does Sean Fraser’s hasty retreat from “not a complete veto” when the Chiefs shouted, “Oh yes we do so have one!” count as endorsement?
I guess we’ll have to find out. But we may never. Industry is watching. No one is going to invest in a resource project where the regulator doesn’t actually have the power to approve a project — some other sovereign entity does and it might change its mind if a new gang of caudillos takes over. Fuck that action.
So we might enter a long period of inter-racial calm. No resource projects, no new subdivisions, no nuclear power plants, no high-speed rail...no conflicts.
Leslie, you say, in part, "... No one is going to invest in a resource project where the regulator doesn't actually have the power to approve ..."
I very respectfully think that understates the reluctance of industry. Previous pipeline proponents have invested billions - a plural figure - to see the various proposed projects fail. If you go back to the 60s and 70s you see that the proposed Mackenzie River project fail due to widespread opposition and doubts about the environmental affects, right up to the last decade where Northern Gateway and Energy East, etc. failed, primarily due to governments giving in to the agitprop industry.
Clearly, the most recent projects needed to work on the "consultation" aspect but please recognize that the latter two, i.e. Northern Gateway and Energy East, did a great deal of consultation. The courts decided that the consultation that was done was insufficient although it met the existing standards of the time. Simply put, the courts made up new standards and/or interpreted the old standards in a new way. Fair enough. That is what courts often do. And the feds had the legal right to consider those court decisions and to agree or disagree with them.
In those two cases, however, the political actors, primarily the federal government but also provincial governments, ran scared from the enviro / aboriginal / political movements and either withdrew previously (at least inferred) support. In the case of the latter two projects, the feds actually banned tankers from the BC coast and made statements about the "social license" (Energy East). The proponents (Enbridge and TransCanada, respectively) saw the writing on the wall and realized that there was no "economic case." Hah! No economic case! Sure, build a pipeline but you cannot pump oil to tankers that cannot take on that oil! Sure, build a pipeline but you cannot pump oil if the province across which the pipeline crosses wants to stop you! No revenue, no economic case.
So, all this is a long way of saying that, no there isn't anyone putting forth a pipeline proposal. No sane corporation will expend the money to develop a proposal when the tanker ban is in place and neither will any sane corporation expend monies when the feds are afraid to take on - particularly! - La Belle Province. So, no proponent exists or are likely to exist without the feds taking actual concrete steps to encourage such a proposal.
> "I very respectfully think that understates the reluctance of industry."
Ha. Well, I do try to be an optimist.....
At some point if national quality of life continues to decline Canadians will elect a populist government that runs on a platform of directly confronting First Nations on this stuff.
I really hope we can get to a grand bargain before that. A test of Carney as a statesman.
Try 634 recognized indigenous bands. Plus the Inuit and Métis. Some bands have hereditary chiefs, some have elected chiefs, and some have both. Plus 3 territories. Are we a country yet?
It’s interesting that the federal government can’t approve or support any pipeline without provincial or aboriginal agreement, yet the federal government have raised (passed?) legislation to ban the sale of ICE automobiles within 10 years. I can’t imagine in any reality that the Ontario provincial government agrees with this policy. The results of this mandate will encourage the auto manufacturers to move elsewhere, where governments aren’t trying to control what they produce or sell. Yet - here we are 🤔
In the years since TMX was approved over the objections of one indigenous band (and over the objections of the then-Premier of BC) as Mr. Breakenridge (edited to correct spelling) describes, Parliament has passed legislation to “enshrine” UNDRIP. Retired lawyer Andrew Roman says it doesn’t change any individual law until that law is amended by Parliament to take UNDRIP’s implications into account. No law has been so amended.
However, nothing stops the Supreme Court from deciding a case *as if* UNDRIP modifies the relevant law being cited in the case before it. It could simply say, “Yes, the plaintiff — it might be just one band, or even just one guy—can block this project from happening without its/his consent because this is how we interpret Parliament’s intent when it legislated to enshrine UNDRIP.”
The progressive activist Supreme Court loves to discover group rights and Parliament’s passage of UNDRIP might offer it a golden opportunity to discover a (huge) new one. Effectively Parliament and Cabinet could be made subordinate to an unelected, race-restricted oligopoly that can veto anything that “affects” them.
And short of amending the Constitution to emasculate the Supreme Court, there won’t be a damn thing Canadians can do about it. You can see why Prime Minister Carney is hoping for consensus on everything....or rather why he wants to do nothing where he can’t get consensus.
Since in most cases indigenous vetoes could be bought off with enough money, projects could still get built but much of the return on investment would be siphoned off as rents to every band who wanted to play.
Carney employs many weasel words in significant parts of his grand announcements which while giving the appearance of support for infrastructure programs actually leave him room to quash any projects which don’t agree with his ideology. In other words we continue on with the Trudeau led Liberal programs of the past 10 years.
If the Trudeau legacy continues Canada is screwed. There is almost no one on the Liberal voting base that will support any sort of traditional energy project. The only possible savior is the Sovereign bond rating community that Carney listens to. If Carney is advised that Canada will be swimming in the same financial toilet as Greece, Spain, Argentina and the like, he might stand up on his hind legs and cause some stuff to get done.
I'm one. I voted Carney, support Energy East, and pumping every barrel and cubic metre we can. I'd like to ship all of it by rail until an eastern pipeline is built to get the product moving now. Max out TMX volume too. We need the revenue. But let's use it for something useful.
Yup. Best of all, ship it through Lac Magantic.
Poetry, you know.
1) Not sure how much revenue "we" will get to spend on "useful" things, by which I assume you mean public funding of social justice programs. The profits, if any, from a pipeline or any other big project other than a nuclear power plant will go to the investors, not to spendthrift governments. Yes the corporation and its contractors will pay corporate income tax and their employees will pay personal income taxes on their wages and salaries -- that ain't nothing -- but the main reason for building pipelines is to help the larger economy achieve its potential, not to create a direct cash cow for governments. If you want the government to reap profits directly, you need to create a profitable Crown corporation like, let's see.....Canada Post? VIA Rail? The CBC? TMX?
2) After Lac Mégantic I doubt there is much enthusiasm for shipping petroleum over rickety corner-cutting short-line railways from Montréal to Saint John. The refinery in St. John handles light volatile crude (as from Saudi and the Bakken Shale) which is why the town got incinerated so thoroughly. Is Irving interested in re-tooling it to take heavy crude from Alberta? To its credit, CP is making some investments in Maine and the Maritimes after abandoning its entire system east of Montreal 35 years ago. But if there was going to be a plan to ship Alberta oil by rail it would seem most sensible to ship it down the Mississippi to refineries on the Gulf of America where both CN and CPKC now have seamless through routes on their own Class 1 track from Winnipeg. (This also makes both railways blockade-proof.) They don't really need the East anymore. And maybe Alberta doesn't, either.
Shipping oil by rail is not something the railways are going to be interested in investing in unless it's for the long term. A stopgap it definitely isn't, unless you can do it on the cheap with junk track, junk locomotives, and junk rolling stock you have lying around rusting....and that road led to Lac Mégantic. A hell of a thing that was.
Leslie, just a quick point. You point out that "... The refinery in St. John handles light volatile crude .."
I concede your point - can't argue with accuracy - but was not Energy East to bring heavier Alberta grades to the east for shipping but also that Irving was going to retool to be able to process that new stream? That is my recollection; I have not gone back and researched the old news stories.
Could be. I suppose that must have been the plan. At the time of the disaster it was taking Bakken Shale oil (that train originated in North Dakota.) It does show how many moving parts Energy East involved.
You are correct on your recollection Ken. Irving was a material part of the proposal and was going to re-tool to handle AB heavy crude.
Yep. Hopefully there are more of you!
Exactly. I posted this comment in the Mop and Pail yesterday ...
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Ummm ... Buddy is still fine with this ...
"At the heart is not just respect for, but full embrace of, free, prior and informed consent ... "
Dang ... he's still not "walking this back"!
Basically ... that is an Indigenous veto ...
It's still weasel words ... he thinks it's his "Ace up the Sleeve" ... to continue his (and Justin Trudeau's) clearly expressed hopes.
I would love it if just one leader in Canada would take a proper (and defensible) position, and then defend it rather than cave in the face of public backlash. If you're factually correct - bring the people onside. It's not undoing years of reconciliation work to accurately talk about the duty to consult. That is just drama from people who don't understand how the duty to consult works - so give them a mini law lesson. Provide links. Help them understand that no - rolling over and giving groups EVERYTHING they ask for is not going to further reconciliation, it will just impoverish the rest of the country.
At some point if we don't get productive, we will lose corporate interests, and the resulting taxes that come from projects. If the government lacks money, those indigenous groups suddenly aren't going to be getting much for treaty rights and many social programs would suffer. What takes hundreds of years to be built, can actually be destroyed fairly quickly through incompetence.
Indigenous groups take the position that their funding and court awards are a first call on the the Canadian economy and the primary function of the Canadian state is to make sure this funding flows forever, with periodic increases as the Reserve populations increase. That we will have a harder time affording it if our economy sputters is just not relevant to them. Find it somehow. Cut health care, education, and OAS and don’t buy F-35s. Borrow it if you have to.
Think of it as like alimony. You don’t get a break if you have to take a lower-paying job. Pay me first, says your ex. How you pay your rent with what’s left is not her concern.
As always, it will come down to the fact that the LPC believes that whatever is good for the Liberals is therefore good for Canada. So expect that the lack of western Canadian LPC votes will provide the decision on this.
I’m going to say something that might sound crazy - but if Carney approves a Western or Eastern pipeline under his “National Interest” exemption, he will win the Liberals 20+ additional seats West of Winnipeg, and they will romp to a majority 18 months from now.
We forget that Carney won the election running on basically the Conservatives platform. If he hadn’t run on this, we’d be discussing Prime Minister Pierre right now. For him to not come through on that platform would be political suicide. The Conservatives would eat up the very large part of his centrist coalition that balked due to Trump, and the NDP would tear him up on the left.
The Liberals can win seats in the West… if they govern like Conservatives. And there are more and more seats out that way all the time.
We should be under no illusions that Carney will waste any political capital to endanger reelection chances. After all, he is a Liberal leading a minority government and Liberal politics are always paramount to the national interest.
Brian Mulroney bet his political farm to get a free trade agreement with Reagan, upsetting a lot of central Canada voters in the process. In a modern context, would Carney risk his Laurentian base on the alter of another pipeline to the west coast or from Alberta right through Quebec because it was in the national interest? I highly doubt it and western Canadians who think that there is a glimmer of hope are going to be on the outside looking in. Again.
I don’t agree Darcy. The Liberals Laurentian base was cracked by the Conservatives in the 906 this last election. They lost seats in Ontario. The Liberals path to a majority does not lie in their traditional base - but rather runs through the West. We forget the nation overwhelmingly supports a National pipeline - and this includes Quebec, he would not be expending political capital, but rather building it by coming through. If Carney gets a pipeline approved either East or West under his National Interest Act. We will see a Liberal majority government with very strong Western representation
Darcy, you conclude with, "... western Canadians ... are going to be on the outside looking in. Again."
Until perhaps we are actually on the outside?
Just asking.
Thanks for publishing this and addressing the elephant in the room head on.
Dealing with Donald Trump is easy compared to this.
This issue of having 634 veto points for projects, and the broader question of co-sovereignty with Indigenous Nations vs. a sovereign Canadian Crown that has a Duty to Consult, is **the** make-or-break issue for Carney’s government, and maybe for the very survival of Canada.
The fundamental premise of environmental assessments is that there is an acceptable trade-off between environmental impacts and the potential benefits delivered by projects, and that risks can be mitigated to an acceptable level. The problem is an environmentalist movement that tends to reject both premises: no amount of environmental impact is acceptable, and any risk is intolerable. The protracted approval process and court reviews are simply a tactic by the environmentalists to rag the puck, increase the costs for project proponents, and hopefully defeat the project. It's not actually about achieving compromise.
Politicians have been using the environmental assessment process to provide cover, much as they hid behind public health officials during the COVID pandemic. Instead of making decisions, they point to the outcome of process and recommendations of experts. When they still find they're criticized, they add more process in attempt to appease their critics.
The approach that's needed is to simply define the objectives and boundaries of the environmental assessment process in law, follow the process, and then support the outcome of the process as the final decision. A clear law minimizes the potential for a protracted legal process. Setting clear terms for the process limits scope creep. Making it clear that the process and its outcome *is* how consensus is achieved clips the wings of the malcontents who try to relitigate losing arguments over and over again.
This is the issue which will bring Carney down and expose him as the Trudeau Liberal (DEI, climate crisis, shut down the oil and gas producers) he really is. The Poilievre will have be clever, adopting a more statesman like tone and manner. Poilievre lost the election in large measure because he alienated too many liberal voters by being perceived as nasty and always on the attack. He lost them emotionally, on their feelings, not on what needs to be done. The demographic he has to sway are solidly middle-class, university educated, older women who are largely lifelong Liberals. Carney has already stolen most of the important Conservative proposals without upsetting this group through very careful and ambiguous language. This cannot last for long. He needs to be backed into a corner, but "nicely", with reason not personal attacks.
This is EXACTLY what I've been fuming about (and constantly commenting-about online) ... ever since it became so painfully/publicly obvious. Weasel words!
I read today that this bill has also now excluded the ability to ignore the Indian Act when in pursuit of projects deemed to be critical to the country. So this puts us back on square one as to my knowledge the 'requirement' to consult with FN scuttled all of the projects in the past. We need someone in the government to actually challenge this Supreme Court decision to clarify that yes, we need to let the FN's know what is going to happen but that is all. Is there anyone in the federal government who is on the side of citizens with this opinion (there are a lot of us).
You can’t challenge a Supreme Court decision. They have the last word. You have to amend the Constitution but the First Nations effectively have a veto there, too.
Leslie, in a limited sense you CAN challenge the Supremes.
When the Supremes have bloviated on something that is asserted to be a particular way because of "rights" asserted to exist due to the Charter of Rights and Freedoms you can actually use the Charter in response. Specifically, the notwithstanding clause is an integral part of the Charter so that can be used and is, oh, so to say, Charter-proof.
Oh, but the courage to do so? Not in this lifetime, not with this government.
Ken, only if the right being asserted is found in the Charter of Rights and Freedoms, like freedom of expression or a right to privacy, for instance. Aboriginal rights are contained in Section 25 of the main text and in the "Honour of the Crown" in the Preamble. Those are part of the basic Constitution and can't be over-ridden by invoking the NWC. If the Supreme Court says a law is unconstitutional because it infringes some right it invented from Sec. 25, (which is pretty vague and allows almost anything), that's it.
(A long time ago you could appeal a Supreme Court decision to the British Privy Council in London. I *think* the western provinces won their control of resources through that route -- and you might have been the one who told me about it.)
Leslie, that is why I said it is a limited sense that you can challenge the Supremes.
As for Section 92A which gives the provinces rights over resources that is in the Constitution Act which replaced the original British North America Act. The rights to resources were allocated to the original provinces under the BNA Act but when Alberta and Saskatchewan were created in 1905 (and Manitoba, which was created in 1870) the feds took the position that that allocation did not apply to the new provinces. [No one had any idea about oil and gas but the feds dearly wanted to control coal and any other minerals.] Alberta was pissed off and sued. It took many, many years to wind it's way through Canadian courts, appeals, counter appeals, etc., etc. and then, yes, it did end up with the Law Lords in the UK. The result was that in 1930 the feds and the provinces executed an agreement pursuant to the federal Natural Resources Transfer Act wherein the feds agreed to back off.
You may (or may not - I do) recall the energy wars of the 1970s and 1980s which culminated with the National Energy Program. Prior to the NEP being brought in T1 wanted to re-patriate the Constitution and initiated talks with provinces to do so. The result was the current Constitution Act of 1982. That document includes Section 92A which EXPLICITLY allocated responsibility for resources and development (very broadly defined) to the provinces. Peter Lougheed would not sign off on re-patriating unless and until that section was included simply because of the bad faith from the feds starting in 1870, continued in 1905 and further continued in the 1970s and 1980s energy wars.
Incidentally, one of the very, very consequential items of the energy wars was a provision from (memory here) about 1974 wherein the feds changed how resource companies accounted for crown royalties: they made them absolutely non-deductible. It is a principle of income tax law that a business can deduct an expense that is incurred to gain or produce income; that applies to any business in Canada, the US, etc. The feds simply said that henceforth (from 1974) no deductions for crown royalties; royalties paid to freehold landholders or to other oil companies continue to this day to be deductible but not crown royalties. The feds did that to ensure that taxable income upon which income tax deducted is calculated was higher so the federal tax take was much, much higher. Simply put, the feds felt that Alberta was becoming too wealthy and they wanted to stop that - they admitted it publicly.
Why do I speak about that tax issue? Well, it fits in with the federal attitude that resources are theirs but it also shows that the feds use all sorts of laws to ignore the constitutional allocation of responsibilities. Which, again, is why Peter Lougheed wanted Section 92A in the Constitution Act. No 92A, no signature from Alberta. Unfortunately, the feds continue to use the Income Tax Act to ignore the allocation of responsibilities. And that history is why I don't and won't trust the federal government.
One final thing. You could appeal your legal case to the Law Lords in the US until 1949 when the Supreme Court of Canada became the highest court of appeal. From the date, I presume that the required amendment to the original BNA Act to make the Supreme court, well, supreme was also the same amendment which admitted Newfoundland to Confederation.
Determined opposition to a project adds risk. Building consensus, i.e. making sure the major organized groups are invested in the project’s success, helps ensure a win. It’s the best way to execute a project. It’s way too early to be talking about forcing projects down people’s throats. We should make a solid effort on consensus first.
I wonder how much these early remarks about vetos are about setting expectations. “You can’t stop us….but yes of course, let’s talk about your concerns! How can we get you onboard?”
That has been tried and is ineffective unless there is a huge cheque in hand. I am unwilling to continue to see this as a viable way forward.
I have no qualms with the political analysis on display here but I fail to see how further development of O&G reserves does anything remotely close to "diversifying our markets".
Honestly, have we learned nothing from the sunk costs and abject failings of TMX? And don't even get started on the abject ludicrousness of carbon capture proposals (hint: those only work with incredibly high levels of public funds, to the extent that they even work at all, which they don't).
"I fail to see how further development of O&G reserves does anything remotely close to 'diversifying our markets'."
TMX means that Alberta can export oil to customers in Asia, like Japan, South Korea, and China, not just to the US. Given Trump's surprise trade war, TMX turns out to have been up and running in the nick of time.
Trevor Tombe's assessment is that TMX was well worth it: https://thehub.ca/2024/04/30/trevor-tombe-the-trans-mountain-pipeline-was-worth-every-penny/
If Albertans decide that they want to diversify their economy away from oil and gas, fine. But it has to be their own decision, not a decision that the rest of Canada imposes on them. https://russilwvong.com/blog/alberta-and-national-unity/
I won't fight Tombe's analysis on economic grounds (we subsidize fossil fuels to a ridiculous degree in this country), I'd rather point out that he did his analysis before Trump was re-elected and we were thrown into more volatility (which doesn't bode well for finding a future sucker-er buyer of the TMX pipeline) and that looking ahead to 2040 may be a bit optimistic https://oilprice.com/Energy/Crude-Oil/IEA-Doubles-Down-On-Peak-Oil-Demand-Forecast.html
Yes, I admit to prognosticating, but hey, that's also economic forecasting writ large, particularly as climate change unravels the entire future.
Lastly, I have no argument against Alberta's right to decide its own destiny (insert dead-eyed-thousand-yard-stare here), but only because that's a value judgment, and we're all entitled to those (mine being that the incineration of Fort MacMurray should have been a clear enough warning about all of this). That said, I appreciate that your writing acknowledges the realities imposed by climate change and the volatility of oil prices.
Just a shame that so few others are willing to do the same.
"I appreciate that your writing acknowledges the realities imposed by climate change and the volatility of oil prices."
Thanks. I follow Andrew Leach pretty closely - I really appreciate his perspective as someone who takes climate policy seriously while supporting continued oil and gas production.
An observation from Matthew Yglesias that seems relevant when thinking about Alberta and national unity:
"I think the broader 'rural rage' issue is that communities have real and perceived collective economic interests. You don’t need to work in a car factory to understand that the automobile industry is important to the entire ecosystem of Michigan. Rural communities tend to have natural resource extraction of various kinds — fishing, logging, mining, ranching, farming — at the core of their economic model. In a rural community, like any other community, most people work in local service industries. But the natural resource extraction is the export, it’s the thing that brings money into the community, it’s the reason the community exists. So when you adopt a regulatory posture that is hostile to the interests of natural resource extraction, people don’t want to vote for you." https://www.slowboring.com/p/voters-care-about-issues-even-lobstermen
I definitely find it easy to have sympathy when this kind of argument is invoked: I read Matt Huber's "Climate Change as Class War" a few years back, and while I didn't really enjoy it or find its central thesis compelling, it does add to the convincing case that broad and ambitious climate action needs to include the interests of the working class.
Sadly, it seems that this case tends to be commonly stolen and twisted to mean "continue to dig up as much oil as we can, but allocate 10% more for the PR budget and lobbyists" rather than "massive public investment in non-fossil fuel infrastructure coupled with ample support for retraining and social security to support people through difficult but necessary economic transitions".
I definitely know where I would have preferred the government to allocate 30-plus billion dollars, but alas, it remains a persistent failing of our elected leaders to exercise that kind of courage.
(I am appreciating this back and forth, let it be known!)
That analysis by Tombe is incredibly (as in, unbelievably) optimistic. It treats a financial filing as something you can take to the bank, when in reality a financial filing is something you wave at the bank to hold it off from taking you to bankruptcy court. To be fair to TMX, the filing contains lots of cautions to the reader that their optimism is based on nothing else going wrong in future. Even then it doesn't expect the pipeline to turn a profit until the 2030s when debt has been paid down some and not so much of the optimistically predicted revenue has to go to interest. It's Tombe's interpretation of it that I object to. I would like to see a sensitivity analysis with a more realistic discount rate of 3% instead of 8%. 8% may be a reasonable figure for internal rate of return for alternative uses of the capital but it is way too high to be a discount rate, which is something else.
I think he's pulling a sleight of hand with the debt numbers. He seems to be saying that the debt won't be on the balance sheet of whoever buys it. No way will the government get anywhere close to $34 billion for it. The tolls are too high. The shippers are going to be demanding a subsidy even if the tolls are cheaper than rail. If the government sells it, it will leave the debt for us to pay. No one will buy it with the mortgage on it. Will it be good for the economy as a whole? Well, probably, but other uses of $34 billion might have been even better, like leaving it in the pockets of us taxpayers.
Victor Davis Hanson I think nailed it. He says Canada probably can't get a better price by selling oil abroad by shipping it halfway around the world. The cost of that shipping is going to figure in the price, either us or the foreign customer will have to pay it. It is cheaper to ship oil next door and both buyer and seller share in that savings with a lower price.
it's all fine and good to hammer Carney and for Smith to go on and on about the need for a pipeline (esp to East coast). but until actually Corps step up and say we financially back this proposal, none of this means anything. this isn't "field of dreams"/build it and they shall come - you need guarantees of product and capacity before under taking this process. Should the Gov of Can get started on negotiating a pre approved "utility/resource transfer corridor" - sure that makes sense. but there shouldn't be any shovels in ground until there's 100 percent guarantees by corps.
Also seriously fuck Alberta - I live here and Smith constantly says that othe jurisdictions should just rollover for whatever pipelines and projects she wants - but she can't even hold accountable companies in her own province for their environmental liabilities/abandoned and orphaned wells and refuses to enforce or enact legislation to do so. Any more pipeline originating in AB under her support should be mandated for Alberta to
carry full liability for any failures and cleanup.
John, you want corporations to "... step up and say we financially back this proposal ..."
Corporations did precisely that in the last two decades with TMX, Northern Gateway, Energy East, etc. and look where that got them. TMX got the proponents bought out (at too high a price by an incompetent government) when the feds et al put up so many roadblocks that the proponents (KM) simply walked away and the feds panicked. Northern Gateway and Energy East cost the proponents billions. For that matter, KXL similarly cost well over a billion to the proponent, TC, but that was stopped - again, due to politics - in the US, not Canada.
So, the lesson learned by any intelligent C-suite is that unless the laws and processes are crystal clear there is nothing to be gained and everything to be lost in Canada.
I don't disagree w any of this. the uncertainty and delays kill projects and I also feel the "duty to consult" doesn't give any party an effective veto and those parties being consulted have to get their shit together: otherwise I have no probs w their objections being overridden. I also believe we need to a pre approved corridor to assist the momentum in corporate capital flowing to said projects. I'm just angry more as an Albertan when we have a premier saying we have to do thesee things as if the onus is on the gov to fund them.
RE: Your opening sentence ... WTF are "corps"?
corporations I believe.
Thanks. After reading past that opening sentence, I was able to use the famous Principle of Context Clues to solve that initial mystery.
yes corporations/actual business interests.
Yes, we aren’t going to build empty pipelines to nowhere as public works.
Great piece. I have read author Nassim Taleb's many thoughts on the "Tyranny of the Minority". Canada is exhibit "A". Thanks to the embrace of Identity Politics by Carney's predecessor, Canadians have been sliced and diced into a post-nation state. How to put this "Humpty Dumpty" back together again after ten years of demoralization will be a challenge. Carney may be the anti-Trudeau but the debris field left by his predecessor is loaded with landmines.
So now we get to find out who Mark Carney really is. Is he the smooth-talking elbows-up nationalist who's prepared to take whatever measures are necessary to get things done, or is he the climate-saving, UN-backed, globalist central banker who is nothing more than a mealy-mouth diplomat. The rubber is about to meet the road.