Advocacy

Canadian Energy Issues During and After the Pandemic

The pending conclusion of the COVID-19 crisis has initiated an escalating volume of analysis around prospects for prominent Canadian business sectors. The end of the pandemic is however unlikely to solve any major issues related to Canadian energy policy. Since last year the Canadian pipeline industry has been the object of highly controversial actions originating from south of the border. The decision in January by the newly inaugurated Biden administration to revoke a permit on the Keystone XL pipeline during their first day in office is quite bluntly a serious blow to Canada and future relationships with Washington. In late March, the Attorneys General of 21 American states initiated legal action arguing the President does not have unilateral authority to cancel policy established by Congress on a pipeline that would traverse multiple states carrying 830,000 barrels of crude daily from western Canada to Steele City, Nebraska and subsequent connections to major Gulf Coast oil refineries.

The impact of Keystone has been well documented across Canada in relation to lost jobs and economic opportunities. The legal actions initiated at the state level across 20 plus jurisdictions verify President Biden’s decision is not exclusively a Canadian problem. Shortly after this cancellation, bilateral controversy shifted to the imminent closure of Enbridge Line 5, a pipeline which transports western Canada oil and natural gas liquids from Superior, Wisconsin into Sarnia, Ontario. Michigan Governor Gretchen Whitmer has commenced proceedings to revoke a 1953 permit that allows a Line 5 crossing under the Straits of Mackinac, providing notice to Calgary-based Enbridge for termination of operations by May of 2021. The current structure has been targeted by pipeline opponents for many years despite no spills or other environmental issues.

This is a massive issue for Ontario as Line 5 carries 45 percent of provincial energy requirements, including 100 percent of the aviation fuel used at Pearson International Airport. Ironically, the Michigan propane supply is highly dependent on Enbridge and frustration over a pending closure is mounting through the industrial bases of Ohio and Pennsylvania. In late March 2021 energy ministers from Alberta, Ontario and Saskatchewan appeared at a House of Commons Committee where Sonya Savage from Edmonton indicated that a Line 5 interruption would be above all other issues a dangerous precedent impacting future cross-border infrastructure projects between Canada and the United States. A recent Calgary Herald article by Danielle Smith noted that Line 5 is emerging as a larger issue in Alberta than Ontario when eastern Canadian energy supplies are seriously threatened – a statement that provides volumes of analysis around Canadian regional and political attitudes. Prominent Canadian business journalist Diane Francis wrote in the National Post recently that Line 5 represents a serious “flash point” between the United States and Canada. The oil transportation controversy has reached unprecedented levels and Canada is at fault for not constructing a national pipeline for moving products to the east. Alternatively oil is flowing through northern states and initiating costly legal and political action on both sides of the border. In late March the Supreme Court of Canada tabled a 6-3 decision that upheld the federal government’s authority to level carbon charges. Alberta, Saskatchewan and Ontario, all united against Michigan Governor Whitmer on Enbridge Line 5, initiated action against the Canadian government claiming Ottawa was intruding on provincial authority over taxes and natural resource development. In Ontario, many political analysts and strategists have observed that opposition to the federal carbon tax was a major contributor to the Progressive Conservative electoral victory in 2018. Premier Ford, with Scott Moe and Jason Kenney, have appealed to voters that some environmental initiatives directly impact taxpayers and produce marginal results.

Canadian and American energy policy is central to the debate around provincial and state capabilities to govern. In the Canadian context, Alberta, Saskatchewan and Ontario have vehemently argued against the federal government extending their jurisdiction into resource development and taxation. South of the border states are using a similar argument against the Biden administration’s actions on Keystone. In the final analysis decisions as always are made by the voters. Any candidates on the wrong side of the electorate will be held accountable.

ABOUT THE AUTHOR Art Sinclair

Art is Vice President Policy and Advocacy for the Greater Kitchener Waterloo Chamber of Commerce.