This week, Canadian Senators passed two controversial energy bills as it prepared to adjourn for the summer and the upcoming fall election. Bill C-69, the Impact Assessment Act, sets up a new authority to assess industrial projects including pipelines, mines, and inter-provincial highways, for their effects on public health, the environment and the economy. Bill C-48, the Oil Tanker Moratorium Act, formalizes a moratorium on oil tanker traffic of a certain size in waters from the northern tip of Vancouver Island to the province’s border with Alaska.
CEO of the Canadian Energy Pipeline Association (CEPA) Chris Bloomer welcomed the earlier approval of the Trans Mountain pipeline expansion but said the industry is facing broader problems and “The potential for new major pipeline development in Canada is bleak with the Senate’s passing of Bill C-69. Canada is sending mixed messages that will send critical investment capital elsewhere.”
Both bills passed on Thursday and were given Royal Assent to become law on Friday. Bill C-69 passed by a vote of 57 to 37. Bill C-48 passed by a vote of 49 to 46, with one abstaining.
On June 12, Energy Ministers from Alberta, Saskatchewan, and Ontario said many of the amendments that were struck down would have made Bill C-69 more palatable for the resource sector. They wanted the amendments taken as a complete package. Conservative Senator Richard Neufeld called C-69 “one of the most toxic, polarizing and divisive bills” he has encountered in his ten years as a Senator. Alberta Premier Jason Kenney tweeted, "This means the No More Pipelines Law will become law. A bad day for our economy, and the Canadian federation."
Prime Minister Justin Trudeau responded by saying the legislation is necessary to get energy projects built in Canada. “The conservatives still seem to think that the way to get big projects built is to ignore Indigenous peoples and ignore environmental concerns. That didn’t work for 10 years under Stephen Harper, and it’s certainly not going to work now. That’s why we had to change the process.”
At the Bloomberg Canadian Capital Markets conference in London, co-founder of Grafton Asset Management Geeta Sankappanavar said Canada risks becoming a “banana republic” for its restrictive energy policy and failure to attract new investment into the sector. She said, “We have had basically signs on our energy industry that Canada is closed for business. Today we are in danger of becoming unfortunately a little bit like a banana republic on the energy side.”
Ms. Sankappanavar’s firm has raised and deployed CAD $1 billion in the Alberta oil patch and blames carbon taxes, falling oil prices, and increased regulatory scrutiny under new federal government rules for contributing to what she calls an “awful” malaise in the sector. She added, “It is a very, very dark and bleak place. We have had significant regulatory and political challenges in our industry. We are wasting our time” and at risk of becoming “violinists on the Titanic.” Additionally, Ms. Sankappanavar said, “Canada has a brand issue,” and the industry also needs to do a better job promoting the progress it’s made in reducing relative emissions and investing in renewable energy.