Article originally published in the Fall 2015 version of CAGC's quarterly magazine, The Source. Entire magazine and original article can be found here: https://www.cagc.ca/resources/source_magazine/1503/
As I write this we have seen twelve (12) months of a downturn caused mostly by the price of oil however the price of natural gas has languished for more than five (5) years so with both down our Canadian Industry is very much challenged to survive. Supply of oil continues to outpace demand and in some sense the Saudis feel they can outlast Non-OPEC producers (Canada included) and maintain their market share going forward. In the past when they have lowered output to keep the price of oil up it has encourage Non-OPEC producers to increase output.
Canada is the world’s fifth largest combined oil and gas producer. Of all major hydrocarbon producing jurisdictions, Canada is the only one facing active and vocal domestic and international opposition to gaining international market access for its crude, for the sole purpose of lowering global emissions.
(Bloomberg- August 3, 2015) — Canadians head to the polls on Oct. 19 for the 42nd time in the country’s history.
Prime Minister Stephen Harper faces the fight of his political life, with his Conservatives deadlocked in the polls against the left-leaning New Democrats and the centrist Liberals.
On the world stage, Harper champions budget austerity within the Group of Seven, often pitted against the U.S., and is one of the fiercest critics among western leaders of Russian President Vladimir Putin.
Opponents say Harper’s fractious relationship with President Barack Obama has hindered the approval of TransCanada Corp.’s Keystone XL pipeline project, with environmentalists accusing him of moving Canada in the wrong direction.
A victory in October would make Harper, 56, the first Canadian prime minister in more than a century to win four consecutive elections, and would entrench his agenda of cutting taxes, promoting the commodity sector and reducing the reach of the federal government.
Harper’s chief rival is Tom Mulcair, a 60-year-old lawyer who leads the New Democrats, a party with socialist roots that broke through in the 2011 election and now has a chance to take power nationally for the first time.
Mulcair became leader in 2012 and spent much of the previous parliament as Harper’s interrogator, with his cross examinations of the prime minister earning him accolades and a nickname: “Angry Tom.”
The party’s Achilles heel is economic credibility. The Conservatives will attack Mulcair as hostile to the nation’s oil industry and a free-spending, risky leader at a time when the country needs Harper-style fiscal discipline.
The NDP promises to:
· continue opposing the Northern Gateway pipeline; it initially supported the concept of a west-east pipeline, but said Energy East can’t be approved without a stringent environmental review process; opposes the Keystone XL pipeline.
· create a cap-and-trade system with a market price on carbon emissions; revenue from cap-and-trade would be invested in a greener energy sector in regions where dollars are generated.
· work with provinces to create a fund to help Canadians retrofit their homes and offices to save energy and money.
· redirect $1 billion a year from fossil fuel subsidies to investment in the clean energy sector.
· invest in Sustainable Development Technology Canada including wind, hydro, solar and geothermal technologies to create thousands of new jobs for Canadians.
For more than a century, Canada’s Liberals were the party to beat. Harper has chipped away at that dominance since he took power in 2006, reducing the Liberals to just 34 seats in 2011, the least ever. For salvation, the party turned to Justin Trudeau, 43, the son of one of the country’s iconic prime ministers, Pierre Trudeau. His support has whipsawed, soaring soon after he became party leader in 2013 before plunging this year to third place. Harper has attacked Trudeau — the youngest party leader by more than a decade — as unqualified. Now Trudeau faces a daunting task: He must counter the attacks, revive his poll numbers and win back ground from the NDP. Some fear failure would marginalize the centrist party for good and fuel American-style polarization of the political system between the right and the left.
The Liberals promise to:
· continue to oppose the proposed Northern Gateway pipeline; support Energy East and Keystone XL pipelines.
· put a price on carbon pollution that allows provinces to design their own carbon pricing policies.
· partner with provinces and territories to establish national emissions reduction targets.
· invest millions in clean technologies and enhance tax measures to create more green jobs.
· introduce an environmental review process with more “teeth.”
· hold a First Ministers’ meeting with premiers within 90 days of the Paris UN climate change conference in December to establish a framework for reducing Canada’s carbon footprint.
· increase the amount of Canada’s protected marine and coastal areas to five per cent by 2017 and 10 per cent by 2020.
· phase out subsidies for the fossil fuel industry.
· along with the U.S. and Mexico, develop a North American clean energy and environmental agreement.
The Alberta election suggested an “Anything But Conservatives” response with a shift to the left in voter demographics. This may play into Federal thinking as well that brings in a more activist government in terms of files that effect our industry. Change always comes with a cost on the economy (a carbon tax lowers GDP by way of example) that may or may not be recouped in the future.
From The Thursday File
Even the darkest night will end and the sun will rise.
Victor Hugo, Les Misérables