Jason Kenney and the KXL Deal

Posted on April 5, 2020 by

Last week Mr Kenney threw away (yet again) his belief in the sanctity of the free market by announcing his government (ie. us) would invest $1.5 billion in TC Energy (formerly TCPL) to complete Keystone XL and provide a $6 billion loan guarantee.

Saved by the Alberta government

Mr Kenney speech was peppered with comments about Saudi “predatory dumping” and “lawfare” waged by foreign funded interests, but his most disturbing comment was that if Alberta did not intervene, KXL “would not be built” or would not be built at “any time in the foreseeable because “there are no prospective private sector bidders for the KXL project at this time.”  

This raises two questions (1) was TC Energy looking for “private sector bidders” for KXL and (2) without such “private sector bidders” was KXL doomed to fail.

The answer these questions lies in TC Energy’s filings under Canadian and American securities laws. There TC Energy takes a sanguine position, simply saying KXL “continues to advance” and TC Energy will continue to manage various legal and regulatory matters before making its final decision to start construction.

Premier Kenney buys a pipeline

Unlike Teck who made it crystal clear it would not proceed with Frontier unless it had a partner, TC Energy has never said it would not proceed with KXL unless it found a “prospective private sector bidder” which I think is Jason Kenney’s convoluted way of saying, a partner.  

So unless Mr Kenney knows something TC Energy’s executives, Board of Directors, bankers, shareholders and investors do not know, one has to wonder why he said KXL was kaput without the intervention of the Alberta government.

But let’s assume for the sake of argument that Mr Kenney was correct when he said KXL could not proceed without billions of dollars from the Alberta taxpayer; is the risk of this investment worth the benefits?  

Risks?

Mr Kenney said while the risks are “obvious” this billion-dollar investment was a “solid bet” because it will deliver $30 billion in royalties and taxes over the next 20 years. However, he refused to provide the forecasts supporting his prediction and given how badly he miscalculated oil prices in Budget 2020 we will take Mr Kenney’s promise of a $30 billion upside with a grain of salt.

Mr Kenney told the House that Alberta taxpayers are protected because our $1.5 billion equity investment is “at the top of the capital stack” and this is a “preferred investment where we’ll sell the shares at a profit.”

Umm, no, this doesn’t allay our concerns.  

Firstly, while TC Energy has agreed to reacquire the Alberta government’s “preferred investment” after the project is completed and placed into service, TC Energy says there’s no agreement on the “sell back” price so how can Mr Kenney promise he’ll sell at a profit?  

Secondly, can someone nudge Mr Kenney’s Justice minister, a bankruptcy lawyer, and ask him to explain to Mr Kenney that equity investments whether they’re preferred or common, rank below debt, and creditors take priority over shareholders (that would be us).

Bottom line: not only are Alberta taxpayers bearing the risk of losing their $1.5 billion investment, they’re on the hook for $6 billion in loan guarantees. And they’re taking this risk on the strength of Mr Kenney’s fuzzy assurance they’ll reap $30 billion down the road.  

Benefits?

Mr Kenney listed other benefits of investing billions of taxpayer dollars in TC Energy, including:   

  • Kick-starting the oilsands. He did not explain how KXL will reverse the double whammy of rock bottom oil prices as a result of the Saudi-Russia price war and tepid demand due to the Covid crisis. Perhaps because KXL will have zero impact on either.
  • Creating 1,400 direct jobs in Alberta, 1,200 in Saskatchewan and 300 elsewhere in Canada and 5,400 indirect jobs in Alberta and 12,000 indirect jobs in Canada…oh wait, that’s not the whole story…KXL will also create 10,400 direct jobs and 42,000 indirect jobs in the United States. Listen, I have no problem with Americans going to work, but I question why Mr Kenney was satisfied with Albertans bearing all the risk while Americans reap eight times the benefit.  
  • Getting to work now. Mr Kenney and his energy minister insist Albertans are working on KXL right now (with “now” being Apr 1 or 2 depending on who’s speaking), however TC Energy’s CEO said in light of the Covid crisis “construction will advance only after every consideration for the health and safety of our people, their families and of those in the surrounding communities has been taken into account.” On Apr 3, TC Energy posted a video describing its Covid protocols which at this point appear to apply only to its construction site in Montana. We’re still waiting for a Covid protocol video relating to Alberta.  

?????   

At the same time Mr Kenney told Albertans our financial position was so dire we could no longer afford to pay our healthcare workers, teachers and other public servants properly, he was negotiating a deal which required him to borrow billions of dollars to support TC Energy’s KXL pipeline.

TC Energy posted record financial results in 2019. It says dividends will grow by 8% to 10% through 2021 and 5% to 7% thereafter. It prides itself on its ability to “access sizable amounts of competitively-priced capital” while preserving its financial flexibility to fund its capital program “in all market conditions.”

TC Energy’s securities filings do not paint a picture of a company under financial stress.

So why did Mr Kenney decide it was necessary for Alberta taxpayers to make a $1.5 billion equity investment in TC Energy and issue $6 billion in loan guarantees?

If, on the other hand, TC Energy is legitimately concerned that legal and regulatory challenges will sink the KXL pipeline why did Mr Kenney (who has no jurisdiction whatsoever over American federal and state legal/regulatory matters) make a $1.5 billion equity investment that is not repayable until after the completion of a pipeline that may never get built and further, agree to backstop $6 billion in loans.

Either way it looks like Mr Kenney made a questionable decision.

All we know for certain is Albertans will be living with the consequences of his decision for a very long time.

Posted in Economy, Energy & Natural Resources, Law, Politics and Government | Tagged , , , , | 62 Comments

The Leader and His Team

Posted on March 29, 2020 by

It’s been a tough week for everyone; especially that “young, energetic and diverse team with deep experience” that Jason Kenney (his words by the way) appointed to Cabinet.

Health Minister Shandro took it upon himself to turn up at a Calgary doctor’s house and yell at him for reposting a Facebook meme that suggested the health minister was in a conflict of interest position because he and his wife own a supplementary health benefits company called Vital Partners. Minister Shandro also told another private citizen that if she didn’t stop sending threatening emails to his wife (they were sent to Vital Partner’s corporate web page and weren’t threatening) he’d refer the matter to “protective services”.

A Minister of the Crown yelling at citizens or threatening to send “protective services” to their doorsteps is not the way to allay their concerns.     

Education Minister LaGrange issued a press release this weekend informing 25,000 teachers and non-certificated staff they were fired, at least temporarily. It’s okay, she said, the Feds will take care of you and besides we’ll re-allocate the money saved from this cut to Alberta’s COVID-19 response.

Premier Kenney

Economist Trevor Tombe called this a cut of “massive scale” and said it was “false” for the government to say the savings were being reallocated to COVID-19 because the savings will impact Alberta’s debt, not its health spending.        

And while we’re on the topic of so-so cabinet ministers, what happened to Sonya Savage, our Energy Minister? She’s completely faded off the scene, replaced in all but name by Mr Kenney. Yesterday he was urging the federal government to go after Saudi Arabia and other OPEC countries for predatory dumping (“we cannot let them win”); he also said he’ll be speaking with American politicians and administrators about a coordinated plan to defend the industry. 

The only thing he didn’t say is that he’d shut down the $30 million/year war room and reallocate the savings to fighting COVID-19.  

Deep experience?   

No one is expecting the Alberta government to fix COVID-19 and its impact on our social and economic well being overnight. However some of us would argue that the “young, energetic and diverse team with deep experience” appointed by Mr Kenney is coming apart at the seams. Either that or Mr Kenney lacks the confidence in them to let them do their jobs.  

Which leads us to wonder whether Mr Kenney’s characterization about the competence of his Cabinet is valid.  

Albertans have no way of checking whether Shandro, LaGrange or Savage have the experience necessary to do their jobs at the best of times, let alone in the middle of a pandemic and global economic downturn, because their biographies do not appear on the Alberta government website.*

This is peculiar given that the descriptions of the remaining 17 cabinet ministers, 3 associate ministers, 3 parliamentary secretaries and one military liaison include their biographies. (Even the 27 deputy ministers have biographies for god’s sake).

So what gives?

Health Minister Shandro is responsible for the government’s response to the biggest public health emergency Alberta has ever faced; Education Minister LaGrange is responsible for K-12 education which is experiencing unprecedented upheaval as a result of COVID-19 and Energy Minister Savage is responsible for energy, the mainstay of Alberta’s one-trick pony economy; is it too much to ask for a modicum of transparency so Albertans could view their qualifications for the job?  

They say a leader is only as good as his team. Unfortunately, the Kenney government has chosen to hide the biographies of three critical Cabinet ministers.  

Given the performance of his team over the last few weeks of escalating crisis, this is deeply concerning.

*NOTE: A reader tells me he can see Sonya Savage’s bio. I’ve check on a few different browser, but still see nothing but a button marked “Learn More”. In any event, the question still remains, does Jason Kenney’s Cabinet have the bench strength necessary to lead Alberta through these difficult times?

Posted in Alberta Health Care, Economy, Education, Energy & Natural Resources, Politics and Government | Tagged , , , , , | 79 Comments

The Impact of COVID-19 on Democracy

Posted on March 22, 2020 by

James Madison said tyranny arises “on some favourable emergency”.

The COVID-19 pandemic is today’s “favourable emergency.” It’s being used by unscrupulous politicians as a smokescreen for undemocratic behavior in Alberta’s Legislature and an excuse for Jason Kenney to enlist the crème de la crème of right-wing conservative thinkers to reshape Alberta’s economy.

Undemocratic behavior in the Legislature

Last week NDP opposition leader Rachel Notley told the House about a number of instances where the Kenney government violated the principles of democracy.*  

She said the Kenney government introduced motions without allowing the NDP Opposition to see them beforehand and then lied to the House by claiming written notice had been provided when it had not.

Rachel Notley NDP Opposition Leader

She described how the Kenney government threatened to withdraw the $500 million it had promised support frontline workers battling COVID-19 if the NDP Opposition did not unanimously support what she described was an “unorthodox” change in the budget numbers.  

Government lies and threats have no place in the democratic process.

Lastly, the Kenney government rammed through the budget with 3 hours of debate when House rules require 30 plus hours of debate time. It’s not as if the time wasn’t available. The government simply cancelled the 10 hours of debate time that had been scheduled for the prior evening and that morning.

Why the rush?

Because by short-circuiting debate the Kenney government could shield itself from financial accountability, oversight, and transparency; and (perhaps just as important) shield spineless UCP MLAs who supported cuts that will harm their own constituents.

Hiding from accountability and oversight while ducking your own constituents is undemocratic and cowardly.

The Kenney government said the COVID-19 pandemic justified its behavior and yet other governments, including Saskatchewan, Ontario, and the federal government delayed their budgets, recognizing the pandemic had rendered their budget numbers irrelevant.     

The Harper Council

The Kenney government promised to do everything in its power to protect jobs and job creators in the face of COVID-19 and plunging oil prices. It created the Economic Recovery Council to guide Alberta through the downturn and to develop strategies for long-term recovery, including economic diversification.    

The Council is chaired by economist Jack Mintz (who believes Alberta could Wexit easier than the UK could Brexit) and includes Stephen Harper, former prime minister and now chair of the International Democrat Union (IDU), an alliance of centre-right, conservative political parties. Margaret Thatcher was one of its founding members.

The Harper Council (let’s face it, Stephen Harper will have more sway over the outcome than the other 11 members put together) is top heavy with executives from banks, private equity funds, and the energy sector and light on everything else. This is an indication of what Albertans can expect from the Council—recommendations that echo Kenney’s call for more government support of the energy sector at the expense of everything else (there’s a reason why the AIMCo CEO is at the table).  

One might ask why the Kenney government did not commit to doing everything in its power to protect its citizens from the social consequences of COVID-19 and plummeting oil prices and set up a parallel Council of healthcare and other professionals to develop strategies for our long term social recovery.  

The answer is simple. Kenney accepts responsibility for the economy (sort of, when things go bad it’s someone else’s fault, when things go well he takes a bow), but he will not accept responsibility for society, hence his government’s continuing attacks on Alberta’s doctors smack in the middle of the COVID-19 crisis.  

Thankfully Albertans can rely on the Trudeau government which is committed to spending billions to help Albertans weather this crisis.   

Compassion vs prosperity

Remember when the UCP said we can’t be a compassionate, caring society until we’re a prosperous one. This Thatcherism became the foundation of Jason Kenney’s election promise of “jobs, economy, pipelines” and was reflected in one of his first pieces of legislation, the “job creating tax cut.”

We knew Jason Kenney was wrong, but it wasn’t until the coronavirus hit that we realized just how wrong he was.  

All the tax cuts in the world aren’t going to put Alberta’s economy back on track because as economist Jim Stanford says, it is “work” (which he defines as human effort) that’s critical to economic activity. Human effort transforms the materials we get from nature into useful goods and services. Sure, corporate investment is important, but it is by no means the only driver.  

And until human effort returns to the economy in the form of production and consumption, the economy is going nowhere.

Think about that for a moment.

The COVID-19 pandemic forced human effort to withdraw from the economy in all but the “essential” sectors (some of which were invisible to us until now).

What if something as powerful as a pandemic, say a desire to stop the degradation of public services like education and healthcare, were to capture Albertans’ imagination and they withdrew their human effort for, say, one day a week until politicians agreed it was time to reconsider the balance between the economy and society.

Oh wait, we already know how to do that. It’s called a General Strike.

Hmmm…

*Alberta Hansard, Mar 17, 2020 p 221

Posted in Alberta Health Care, Economy, Energy & Natural Resources, General Health Care, Politics and Government | Tagged , , , , , , , | 51 Comments

COVID-19: A Study in Leadership

Posted on March 15, 2020 by

 “The first role of government is to help people in crisis or need. That’s why we have government.”– John McCain

Crisis separates the leaders from wannabes.

We will be watching our leaders and wannabes very carefully over the next few months to see how they respond to the COVID-19 pandemic. Specifically, we want to see whether they adopt what Chris Hadfield calls “boldface” procedures—“boldface” is a term used by pilots to describe the procedures that could save your life in a crisis.

The coronavirus pandemic is moving very quickly and we’ve learned some boldface procedures from other jurisdictions that will help “flatten the curve”, but these procedures require governments to have the wisdom and the courage to spend the money and take the steps necessary to meet the pandemic head on, rather than hanging back until it’s too late to catch up.

How are we doing so far?

Stepping up…or not

At the federal level, Prime Minister Trudeau is taking action.

He’s committed $1 billion to fight COVID-19: $500 million is allocated to provincial and territorial governments which are responsible for health care delivery, $5 million goes toward increased Employment Insurance sickness benefits for those who need to go into self-isolation, $50 million is earmarked for protective equipment for health care workers, over $275 million is for prevention and research, and millions more will go to regional public health services.

And that’s just the beginning, Mr Trudeau promises there’s more to come next week.

The prime minister is demonstrating strong leadership in a time of crisis.  

On the provincial front, Premier Jason Kenney has been much slower to react.    

Yesterday Mr Kenney made a faith and hope speech, brimming with patriotic platitudes and warning that things would get “much worse” before they got better. Mr Kenney called for “direct and timely interventions” by governments (plural) to support workers, employers, families and businesses, so we can take care of each other, especially the vulnerable, the old, the sick, and the unemployed.

He did not offer any “direct and timely interventions” until this afternoon when he announced $500 million in funding to ensure frontline health professionals have the staffing, resources and supplies they need for testing, surveillance and treatment.

Mr Kenney, coming in on the heels of Justin Trudeau

Mr Kenney’s funding commitment is better late than never, but the fact he waited until after prime minister Trudeau made his announcement is a concern. “You first” is not a sign of good leadership, it’s a cop out.    

The frontline and Budget 2020

Now here’s where it gets tricky.

When Mr Kenney announced the $500 million commitment he said, “Alberta’s public health workers are doing an outstanding job, and we are here to support them with whatever they need.” If he really meant it, he’d take another look at Budget 2020.

Budget 2020 reflects Mr Kenney’s contention that Alberta’s healthcare professionals are overpaid and inefficient. It purports to address this by (1) significantly cutting nursing jobs and (2) materially reducing physician’s compensation.

This left Alberta’s healthcare professionals feeling demoralized and burnt out…and then COVID-19 turned up on our doorstep.   

Rachel Notley has been fighting to reverse the cuts to nurses, and has urged Mr Kenney to “pause” the implementation of changes to doctors’ compensation until the COVID-19 crisis is behind us.  Mr Kenney refuses to budge.

Why?

Mr Kenney says the budget must pass because the government needs spending authority by Mar 31.  This implies that the government will implode if the budget is not in place on April 1.  

Guess what, we’re not the US government, we don’t have to shut down and furlough staff because the government fails to pass a spending bill by a certain date. The Alberta government has the power to pass interim supply bills (which it does on a regular basis) and special warrants to pay as needed.

If Mr Kenney were inclined to address the challenges posed by the coronavirus, he could delay passing Budget 2020.  He simply chooses not to do so; likely because he’d have to revise the budget’s revenue forecasts which are wrongly based on rising oil prices. He simply doesn’t want to admit that economists like Trevor Tombe are predicting Alberta’s deficit will rise to $11-12 billion this year, $8-9 billion next year and $4 billion the year after that and our overall debt will balloon to over $100 billion.

Being afraid to admit you made a mistake is not effective leadership, it’s lunacy.

Instead of facing the music, Mr Kenney tried to fob off Alberta’s doctors and nurses with the promise that there will be no healthcare layoffs during the COVID-19 crisis. How nice, they can work until they drop and run a higher risk of being infected with COVID-19 than the general population…and get fired after the crisis has passed.  

Leadership?

Mr Kenney has been quick to respond to a failing economy by implementing a $4.7 billion corporate tax cut (which failed to create jobs) and a $30 million/year war room (which failed to improve the energy sector’s reputation).

He’s been slow to respond to a pandemic that threatens to upend Alberta’s healthcare systems and he continues to exacerbate the chaos and uncertainty by refusing to “pause” his government unilateral imposition of pay cuts on Alberta’s physicians.    

Thankfully our healthcare professionals will honour their commitment to care for us and our families.

They will lead us through this crisis while Mr Kenney huffs and puffs on the sidelines.  

Posted in Alberta Health Care, Economy, Energy & Natural Resources, Politics and Government | Tagged , , , , , , | 59 Comments

Budget 2020 and the Snake

Posted on March 8, 2020 by

On Feb 27, 2020 the Kenney government released Budget 2020. The day it was tabled it was under water, less than two weeks later it drowned.

It sank beneath the surface once and for all because of a snake (or some other creature) in a wild animal market in Wuhan, China that unleashed the coronavirus which could trigger “the most severe oil market shock in history by throttling demand from heavy industry and airlines.”

To be fair, COVID-19 was unforeseeable, however Budget 2020 is fatally flawed because it continues to promote Alberta’s one-trick pony economy and the nonexistent Alberta Advantage which will result in Albertans being worse off than they ever were.

COVID – 19

Same old, same old

Budget 2020 is a déjà vu budget; a cut and paste of Budget 2019 right down to its key economic assumptions.*

It forecast oil prices of $58 rising to $63 in 2022. The day the budget was released oil prices were around $45; less than two weeks later they were in free fall thanks to OPEC+ failing to agree on production cuts at their meeting in Vienna this weekend.  

Exacerbating Budget 2020’s lack of credibility was the UCP government’s reliance on revenue sources, like federal transfers and more investments, that are completely outside its control.

As is par for the course, there was no hint of implementing a provincial sales tax to provide a sustainable and predictable revenue source. If Alberta had a tax system like the other provinces, we’d have a $7.6 billion budget surplus this year. But no, if the budget won’t balance Mr Kenney won’t raise taxes, he’ll simply cut deeper.  

Cuts  

Mr Kenney has repeatedly said Budget 2020 represents a minor cut, around 3%, and we should consider ourselves lucky he didn’t adopt Ralph Klein’s slash and burn approach to slaying the deficit.

This is a misstatement because:

  • It fails to account for population growth and inflation which put the cuts in the 15% range.
  • The 3% cuts aren’t evenly spread across all ministries. For example, services to seniors will be cut by close to 20%, healthcare cuts are closer to 30% and post secondary cuts are a whopping 50%.  

All Albertans are feeling the impact of these cuts and they’re hounding their MLAs and taking to the streets to voice their dissatisfaction.

Waste   

The government promises to reduce waste. That’s good right, everyone hates waste, but we can’t agree on what “waste” is.

Budget 2020 is no help. It promises to engage in activities that are “nimble”, “attentive”, and not “inefficient” without explaining how these will reduce waste.     

Instead of mucking around on the edges, let’s focus on some big ticket items, like the $30 million/year War Room, and ask the energy sector’s CEOs whether the War Room has added value over and above that generated by their own public relations, investor relations and government relations departments. Heck, let’s ask the industry associations and chambers of commerce as well. If the answer is no, then we can scrap the War Room and save $120 million over the UCP’s four-year term.

Fat cat public servants

Public sector compensation is a hot button issue for those employed in the private sector who made good money when the economy was booming and are now unemployed or underemployed. They say the public sector should share their pain.

Leaving aside the obvious point that “share my pain” is not a persuasive argument, there appears to be an underlying assumption that the public sector is grossly over paid.

This is incorrect.  

Economist, Richard Mueller, researched the public sector wage premium (the percentage difference between the earnings of public sector workers and private sector workers) from Jan 2006 to Dec 2017. He found the average wage premium in Alberta is 3.7%, which is below the national average of 5.7% and concluded there’s not much scope to balancing the budget by taking an axe to public sector wages.

Of course, we could fire the lot of them, bringing public services to a grinding halt and increasing Alberta’s unemployment rate which currently sits around 7%, but that would be cutting off your nose to spite your face.

Unemployment

Alberta lost over 100,000 jobs in the peak of the recession and needs 85,000 jobs to get back to pre-recession levels. Of major concern is the fact that half of Alberta’s unemployed are young men with high school or less in education, consequently their skills don’t match what employers require. Roughly half of these young men have signed up for retraining, the remainder have pulled out of the work force.

This is a serious problem. One would expect Budget 2020 to focus heavily on skills development, however its policies are inconsistent and contradictory. On the one hand Budget 2020 provides funding to upgrade trade skills, on the other hand, it cuts funding to post-secondary institutions, including trade schools, while at the same time fast-tracking newcomers to fill jobs the highly skilled tech sector.

This paradoxical approach does not bode well for Albertans hoping to enter or return to the workforce.

At the end of the day  

There are many ways a budget can be derailed (cue the snake in the wild animal market), but there’s no excuse for adding to the misery by turning our backs on the vulnerable and refusing to prepare Albertans, be they children or adults, for the future.  

*Much of this discussion is based on the U of C School of Public Policy panel discussion, Mar 3, 2020. Panelists: Trevor Tombe (economist), Lisa Young (political scientist), and Janet Brown (pollster). Moderator: Rob Breakenridge (770 CHQR)     

Posted in Economy, Energy & Natural Resources, Politics and Government | Tagged , , , , , | 39 Comments

Bill 1 and Freedom of Assembly

Posted on March 1, 2020 by

What do the Wet’suwet’en First Nations blockades have to do with Alberta’s Budget 2020?

Everything. The blockades are the rationale (flimsy as it is) for Bill 1, Critical Infrastructure Defence Act which the Kenney government will use to quell protests when Albertans experience the full impact of Kenney’s budget cuts.  

Is this far fetched? No, let me connect the dots.

The Budget

Budget 2020 is a flawed budget relying on ridiculously optimistic forecasts for employment rates, GDP growth and (my personal favourite) the West Texas Intermediate crude price which is supposed to magically rise from $47 to $58 in time to save the UCP government from disaster.

The 2019 budget kicked off the first round of public sector cuts; Budget 2020 will go deeper and if the economy fails to reach Mr Kenney’s unrealistic goals, he’ll keep cutting until we get there or die trying.    

The list of public sector employees impacted by Mr Kenney’s fantasy budget includes doctors, nurses, teachers, people working across the government and at its arms length agencies. The list of impacted Albertans includes children, seniors, students, the sick, the vulnerable, the homeless; well, everyone.

Protest on the steps of the Legislature

And “everyone” is no longer prepared to sit around saying “this is great, more please”. 

The protests

Last week over 13,000 Albertans attended a rally in Edmonton, yesterday thousands more protested in Calgary. Ms Soapbox and her husband attended the Calgary rally. They were struck by two things: (1) the crowd was diverse: young and old, professionals and trades people, union and non-union, public sector and private sector, and (2) the crowd was defiant, fearless…and willing to talk about a General Strike.  

Mr Kenney knows the spectacle of a General Strike will do nothing for his image as a wise leader steering the province through tough economic times. Quite the opposite, it will make him look like a bumbling fool.      

So, Mr Kenney latched on to the Wet’suwet’en blockades to justify legislation he said will strengthen penalties against protesters who jeopardize public safety and damage the economy by blocking critical public infrastructure.   

The Bill   

Notwithstanding its title, Bill 1 does not address critical infrastructure, it focuses on essential infrastructure which is defined to include infrastructure relating to pipelines, coal and oil facilities, oil sands, highways, railways, hydro projects, public utilities, electrical and gas utilities, dams and radio infrastructure and the land on which the infrastructure is located and any land used in connection with such infrastructure.

While it’s easy to see how these things would support Alberta’s economy, the same can not be said for section 1(1)(a)(xvi) which is a basket clause that gives the government carte blanche to declare any “building, structure, device or other thing prescribed by the regulations” to be “essential infrastructure”, regardless of who owns or occupies it.

What’s curious about the basket clause is it doesn’t require the building, structure, device or thing to have any nexus with the economy. Mr Kenney could declare my house to be essential infrastructure if he wanted to.  

Given the basket clause’s lack of connection to the economy, anything including parks, university quads, city streets, and the steps of the Legislature, could be declared essential infrastructure by an order in council (ie. Cabinet meeting behind closed doors).

Carte Blanche

Is there a reasonable explanation for the carte blanche basket clause?

Well, let’s see what the government has said about it so far.  

Mr Panda, the minister of Infrastructure, says private infrastructure is just as important, maybe more important, than public infrastructure. He says protestors behaving responsibly and exercising their democratic right to protest peacefully will be fine, however, “if we see any more disturbances or…harm to Albertans” he won’t hesitate to amend Bill 1. Note: Mr Panda didn’t tell us why the carte blanche basket clause exists but he did give us a clue about the threshold for government intervention—it’s dropped from “harm” to “disturbance”, whatever that means.  

Given that all that’s required to contravene Bill 1 is to set foot on, obstruct or damage “essential infrastructure” which can be defined by the government as anything, and given that anyone contravening Bill 1 is subject to arrest without a warrant, and if convicted, will face fines and/or incarceration, the fact that Bill 1 can be amended by Cabinet behind closed doors is a huge red flag for anyone who cherishes democracy.  

Freedom of assembly

Constitutional lawyers Jennifer Klinck and Madelaine Mackenzie recently published an op ed about the Wet’suwet’en resistance to Coastal GasLink. Their comments are equally applicable here.

They said freedom of assembly is one of our fundamental constitutional rights. “It gives marginalized groups a way to make themselves heard.” Furthermore, to respect freedom of peaceful assembly, “governments and the community must tolerate a degree of disruption, because it is the disruptive nature of public protests that amplifies their messages.” Where people choose to protest may be significant specifically because it’s publicly inconvenient. And the police’s response must be proportionate and “seek to uphold, not suppress, peaceful assembly.”   

So guess what, Albertans will continue to exercise their constitutional freedom of assembly, even if Mr Kenney scoops up every square inch of public and private land and targets every single instance of disruption, because we do not live in a police state.

Not yet, not ever.

Posted in Crime and Justice, Economy, Politics and Government | Tagged , , , , , , | 40 Comments

Teck Withdraws the Frontier Application

Posted on February 24, 2020 by

Let’s try to have a sensible conversation about Teck, shall we?

On Sunday, Feb 23, 2020 Teck Resources Ltd pulled its application for the Frontier oil sands project.  The federal government was supposed to give Frontier the green light, or not, on Tuesday. 

Jason Kenney blames the feds, saying “It is what happens when governments lack the courage to defend the interests of Canadians in the face of a militant minority.”

Mr Kenney

And here’s where it gets sticky.

Kenney’s press releases

The Kenney government issued two press releases about Teck’s withdrawal of the Frontier project. The first press release was issued at 7:40 p.m. It said “The timing of [Teck’s] decision was not a coincidence: Teck’s allusion to ‘public safety’ concerns makes that clear.”

The second press release issued at 8:03 p.m. corrected the first press release by deleting the reference to “Teck’s allusion to public safety concerns.”

Which is a good thing because Teck made no such allusions, in fact the opposite is true. In Teck’s letter to the federal environment minister, Teck’s CEO Don Lindsay says “I want to make clear that we are not merely shying away from controversy. The nature of our business dictates that a vocal minority will almost inevitably oppose specific developments. We are prepared to face that sort of opposition.”

Kenney can say whatever he wants about the “militant minority” and concerns about public safety; but know this: Teck’s CEO would disagree with Kenney’s position that Justin Trudeau’s so-called failure to slap down a “militant minority” had anything to do with its decision to withdraw its application.

So why did Teck pull out?

Teck’s letter

In his letter to the federal environment minister, Teck’s CEO makes it clear that bigger issues are at stake.

He said global capital markets, investors, and customers are looking for jurisdictions that reconcile resource development and climate change; and Teck didn’t find that here.

He reiterated Teck’s deep belief in the need to address climate change and expressed strong support for the federal carbon tax (the one Kenney’s government is fighting in the courts) and legislated caps for oil sands emissions (the ones introduced by Rachel Notley which now require the UCP government to enforce by passing regulations).

The Teck letter sends two important messages: (1) Canada, the provinces and Indigenous governments must work through the societal implications of energy development, climate change and Indigenous rights and (2) Canada will not realize its potential as a responsible supplier of natural resources “until governments reach agreement around how climate policy considerations will be addressed in the context of future responsible energy sector development.”

The bottom line in Teck’s letter is loud and clear, jurisdictions that fail to address the impact of climate change in the context of resource development will be left in the dust and the way to address such impacts is by the federal, provincial and Indigenous governments working together to find solutions.

Pointing the finger of blame and making up stories about why Teck withdrew its application is counterproductive and runs against the advice given by Teck’s CEO who said Canadians need a “larger and more positive discussion of the path forward” or it will be very difficult to attract domestic or foreign investment.

Over to you Mr Kenney.

Posted in Climate Change, Economy, Energy & Natural Resources, Politics and Government | Tagged , , , | 53 Comments