Canadian Elections Signal No Change in Energy Policy

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Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--Just a few months ago, Canada's populist leader Pierre Poilievre was expected to lead his Conservative Party to a decisive victory, after longtime Prime Minister Justin Trudeau's resignation.

What a difference a few months--and some U.S. President Donald Trump tariffs and annexation threats--make.

While it was somewhat close, the Liberal Party, led by Mark Carney, was projected to win more seats in the Parliament of Canada than the conservatives, but whether it will be enough to lead without a coalition is still in question. To form a government without help would require Liberals to win 172 of the body's 343 seats. As of Tuesday morning, with 99% of polls reporting, Liberals had won or were leading in 168 seats compared to 144 for the conservatives.

It was tough times for the Conservatives, as Poilievre seemed to have lost his own seat to Jagmeet Singh, leader of the New Democratic Party (NDP), one of only seven seats in which NDP candidates were leading.

Instead of the sea change expected a few months ago, polling showed the Liberals increased their votes by 10.9% compared to voting in 2021, while Conservatives lost 7.7%.

Canada's energy industry, while largely opposing Trudeau's strategies, moved up from being the world's fifth largest crude oil producer in 2022 to its fourth largest in 2023. In the latter year, Canada produced about 5.1 million barrels of crude per day, a 1.9% increase over 2022. The industry was largely hoping for a conservative victory to improve its opportunities to complete pipelines and to reduce environmental restrictions.

So what has Carney's stance been on energy? Again, he has been pushing back on Trump's rhetoric on energy. On the Liberal Party website, Carney is quoted as saying, "Canada has a tremendous opportunity to be the world's leading energy superpower, in both clean and conventional energy. We are going to aggressively develop projects that are in the national interest in order to protect Canada's energy security, diversify our trade, and enhance our long-term competitiveness--all while reducing emissions."

In odd echoes of his southern neighbor, Carney's post promises to speed development of critical minerals, fast-track "projects of national interest" in clean energy, incentivize those projects with government investments, and more.

At the bottom of a long list of clean promises, under a heading of "Secure Canada's energy and electricity sovereignty..." is this single sentence: "Investing in Canada's conventional and clean energy potential, so we can reduce our reliance on the United States and build trading relationships with reliable partners." The key likely being "reduce our reliance on the United States."

In a statement congratulating Carney for his victory, Danielle Smith, premier of the oil producing province of Alberta, said, "As premier, I invite the prime minister to immediately commence working with our government to reset the relationship between Ottawa and Alberta with meaningful action rather than hollow rhetoric. A large majority of Albertans are deeply frustrated that the same government that overtly attacked our provincial economy almost unabated for the past 10 years has been returned to government."

He continued, "As premier, I will not permit the status quo to continue."

While Carney's policies are not expected to help the energy industry as much as was hoped, they are not likely to be worse than those under his predecessor--a stance that is unsatisfying to green energy proponents.

One such publication, Vancouver, British Columbia-based news website, The Tyee, said, "The goal the Liberals have set is to reduce emissions by 35 to 38% below 2019 levels, achieving net-zero oil and gas emissions by 2050. So that's net-zero for one industry, in 25 years. Meanwhile, we'll be burning jet fuel, gasoline, natural gas and even coal--or at best shipping such fuels to markets outside Canada. CO2 (carbon dioxide) emissions will continue to rise worldwide, helped considerably by our exports."

On a Canadian talk show in April, Carney was asked if pipelines were among the large projects he had promised to promote in order to deal with the U.S. trade war "crisis." Although he did not rule that out, he indicated they were "not necessarily" a priority.

The U.S. and Canada trade oil voluminously across their long border. Canada supplies 60% of the oil imported by the U.S. and is also the top supplier of motor gasoline imports. About 90% of Canada's oil exports go to its southern neighbor. Also, about 40% of the oil used by non-oil-producing province Quebec comes from the U.S.

This cross-border trade, almost 100% by pipeline, has helped make energy affordable by minimizing transportation costs. For either nation to shift exports or imports anywhere else would eliminate the cross-border convenience and require more trans-ocean shipping, most likely.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).