Resource World Magazine

Resource World - Dec-Jan 2020- Vol 18 Issue 1

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78 www.resourceworld.com D E C E M B E R / J A N U A R Y 2 0 2 0 Epilogue by David Duval I t was almost a forgone conclusion that Canada would end up with a minority Liberal government given the strong Liberal support in Québec and southern Ontario (read Toronto). Prime Minister Trudeau promised repeatedly and unequivocally that he would end the current first-past-the-post voting system before the 2019 election which, in fact, might have cost him the election. Whatever criticism you can direct at the Liberal government, a lack of strate- gic thinking isn't one of them. Not so for BC's NDP government which promised the same thing and held a ref- erendum on the subject that was broadly rejected by the general public. The NDP seemed blind to the fact that the Liberals won the majority of votes in BC in the last election as did the Conservatives federally. So here we are nationally with a minor- ity, climate change obsessed government dependent on support from a separatist party in Québec along with two extreme left-leaning parties, the NDP and the Greens. What could go wrong? What could go wrong is an escalating exit from Canada of major resource com- panies which is happening right now, driven by the government's ill-conceived Bill C-69 among other retrograde policies. More than US $30 billion of foreign-com- pany divestitures is estimated to have left Canada in the past three years – hardly a paltry sum. The largest pension fund in Norway has removed four Canadian energy names from its investment list and says it will no longer put money in companies that derive more than 5% of their revenue from oil sands. One of Canada's oldest and largest energy companies, Encana Corp., is dropping Canada from its name and moving to the United States to attract more investors. The drumbeat of exits, rare for such a stable oil-producing country, adds an extra layer of gloom for an industry that accounts for about a fifth of Canada's exports. In Canada, major infrastructure projects such as the building of an interprovin- cial pipeline, a nuclear energy facility or large-scale mine, are subject to federal review. For energy projects, that review is governed by two pieces of legislation: the National Energy Board Act (NEBA) and the Canadian Environmental Assessment Agency Act (CEAA). Bill C-69, passed by Parliament in June 2019 and was intended to overhaul both the NEBA and CEAA, changes how major infrastructure projects are reviewed and approved in Canada. Changes would include replacing the National Energy Board with a new "Canadian Energy Regulator" and an altered federal environ- mental assessments process to include a broad range of impacts to be reviewed by a new "Impact Assessment Agency." "The impacts of a flawed Bill C-69 go well beyond hurting Canada's oil and natural gas industry. Every Canadian will be hurt by driving investment out of the country and preventing important nation- building projects from being developed," said Canadian Association of Petroleum Producers (CAPP) president and CEO Tim McMillan. According to CAPP, the bill will "make an already complex sys- tem more complicated while ultimately raising uncertainty and the potential for litigation." Despite the fact many feel the negative reaction to bill C-69 is overblown, Canada's resource industries have reason to be con- cerned about the Liberal government's agenda. More often than not, perception is a far stronger factor in any business deci- sion than reality. Perhaps indicative of a hidden green energy agenda, earlier this year the gov- ernment passed Bill-C48 which bans ships holding over 12,500 tonnes of oil from waters off the north BC coast. Some federal legislators have argued that the bill would be economically crippling for Alberta and Saskatchewan whose access to the coast for their oil and gas production through pipe- lines has faced increasing and effective foreign-supported resistance from environ- mental groups. Lending hypocrisy to the ban is the fact there's plenty of Alaskan crude being transported off the BC coast and through the Strait of Juan de Fuca to Washington State refineries. According to Washington's Department of Ecology, up to 70% of oil imported by sea originated in Alaska with no protests from US-funded environmental groups. All of this oil industry-directed legis- lation speaks to the liberal government's green agenda including its electoral emphasis on climate change which poll- ing indicated was high on the list of voter concerns. It will be interesting to see just how bold the government will be in the implementation of these policies includ- ing carbon taxes. Most Canadians support green initiatives until they have to pay for them. Germany spent hundreds of billions in its disastrous emphasis on green energy, including solar and wind, both of which remain minor contributors to overall generating capacity. Right leaning par- ties plan to shut all nuclear power plants by 2022, while continuing to rely on coal power to offset the phase-out of nuclear energy. n Liberal government green energy policies could spell doom for Canada's energy sector

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