Burnaby, BC and the “line 3” pipeline which runs from Alberta to Wisconsin. Trudeau rejected the Northern Gateway pipeline which would have stretched through the Great Bear Rainforest and announced a ban on oil tankers on the northern BC coast.
So, who are the winners and losers and what is the fallout?
Obviously Trudeau will take a hit with hard core environmentalists. Given his current popularity though that is a hit he can afford to take.
He will also take a hit with many indigenous groups and that is an area the government needs to work on. Trudeau received overwhelming support from First Nations people in the last election and so far the payback has been slim. It is not all Trudeau’s fault that the Canadian government has a historically terrible relationship with indigenous people but it is something that he should strive to improve. The Prime Minister must address Canada's relationship with indigenous people, and the economic and public health challenges they face and soon. Failure in this area will do more political damage than a pipeline announcement.
One of the most important winners in today’s announcement was Alberta Premier Rachel Notley. The NDP’s win in 2015 was a minor miracle and with Alberta’s current 7.9% unemployment rate and a 31% approval rating, she remains an underdog in the next election. The approval of two pipelines gives Notley some cover - something the federal NDP has failed to do.
A serious rift over the Leap Manifesto at the NDP convention in April, 2016 caused Notley’s party to consider splitting from the national party and put Notley in the uncomfortable position of having to choose between showing loyalty to her party or the people who elected her.
Alberta is still Alberta and the premier of the province cannot simply introduce new taxes and environmental regulations and then say “and we’re getting out of the oil business” and expect to hold power for long. The new pipeline projects will provide jobs, economic activity, increase provincial government revenue and hopefully give Notley a popularity boost.
Of course, in the long term, fossil fuels are a bad bet. They are on their way out globally. China and Europe among others are moving rapidly to phase them out. Many developing countries are starting with clean energy and will never see a serious increase in demand for fossil fuels. As demand decreases, the expense to produce fuel from Canada’s tar sands will eventually become unprofitable. Additionally, the cost of future environmental cleanup, health care and disability costs related to the tar sands will likely exceed all provincial revenue derived from it. However, in a democracy, you can’t move too much faster than the voters. Once the transition to clean energy is fully underway and Albertans see that it does in fact produce jobs and generate revenue, it will be easier to wean them off of the fossil fuel industry.
For now Trudeau knows that he is unlikely to see a Liberal government in Alberta in this century and an NDP government is easier for Trudeau to work with on environmental issues than a conservative one.
That is why Trudeau went out of his way to praise Notley in today's announement "Let me say this definitively, we could not have approved this project without the leadership of Premier Notley and Alberta's climate leadership plan," and Notley responded by committing to Trudeau’s carbon pricing plan. From the outside, the two now seem to have a better relationship than Notley does with Thomas Mulcair.
As for the protests planned in BC, the Liberals may be counting on them. The Trans Mountain pipeline will lead to many lawsuits, prolonged protests and other efforts to slow or halt its progress. There is a decent chance that the pipeline will never actually be completed. That means that there is a decent chance that in a future election Trudeau will be able to say to Albertans “I approved the pipeline” and to British Columbians “there is no pipeline” without lying to either group.
On a final note, Canada is getting ready for the holidays and winter. A rejection of all three pipelines would have caused a spike in global energy prices just as Canadians are starting to crank up the furnace. Rising energy prices in the winter would have cost Trudeau, Notley and every other government in Canada some points politically.
In the end, there could be some political cost to today’s announcement by Trudeau but by 2019 the United States will be in year 3 of the Trump administration. Among other things, if the Orange One makes good on half of his promises, the US will find itself in a deep recession with soaring unemployment. How Canada fares economically and the PMs response to Trump's bullying and bluster will ultimately have far more to do with his re-election chances than a pipeline that may never pump oil.
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