Trudeau's tumultuous relationship with the Canadian oilpatch
Paula Duhatschek | CBC News | Posted: January 7, 2025 9:00 AM | Last Updated: January 7
Outgoing PM bought Trans Mountain pipeline but also introduced policies that were deeply unpopular in sector
It's a scene that would be hard to imagine if there wasn't video evidence.
In 2017, Prime Minister Justin Trudeau took to the stage at the CERAweek energy conference in Houston. Speaking to a packed room of 1,200 energy executives and leaders, he meditated on the importance of the Canadian oil and gas sector — and was met with multiple standing ovations.
"No country would find 173 billion barrels of oil in the ground and just leave them there," said Trudeau onstage. "The resource will be developed. Our job is to ensure that this is done responsibly, safely and sustainably."
At the time, Trudeau said environmental protection and resource development went hand-in-hand, and described progress on these dual priorities as being worked out "in co-operation with our provinces."
Cut to 2025, and suffice to say the oilpatch is much less happy with the now-outgoing PM. And as for the federal government co-operating with the provinces? Alberta Premier Danielle Smith, for one, would likely beg to differ.
WATCH | Trudeau speaks at 2017 energy conference in Houston:
Pipeline purchase, unpopular policies
So how did things go so sour?
Even during the early days of his government, Trudeau faced criticism in the oilpatch from those who blamed him for the cancellation of the Northern Gateway project. His public suggestion in 2017 that the oilsands should be "phased out" also sparked outrage in Alberta.
Later, Trudeau did purchase the Trans-Mountain Pipeline — which has boosted Canadian oil exports significantly — but his government also introduced a range of policies that have been deeply unpopular in the oilpatch.
A prime example is the oil and gas emissions cap, which many in the oilpatch see as a de facto cap on production. If Canada isn't able to meet global demand for oil and gas, the thinking goes, it doesn't mean demand will slow — it will simply mean other countries will ramp up production instead, and there's no guarantee those countries will have better environmental or human rights records.
"We've been the only country in the world that has, for a decade, been shooting itself in the foot so that a small number of politicians can pat themselves on the back," said Martha Hall Findlay, the former head of climate at oil company Suncor and a former Liberal MP, who is now director of the University of Calgary school of public policy.
LISTEN | How the Trans Mountain pipeline project came to be:
Beyond the oil and gas emissions cap, there's also the Clean Fuel Regulation, Clean Electricity Regulations, Bill C-69 and Bill C-59. These are policies industry insiders see as complicated, burdensome and unfairly targeting their industry more so than any other.
Richard Masson, also with the University of Calgary public policy school, says the level of bickering and uncertainty around policy have ultimately undermined the government's ability to hit its climate goals.
A prime example, he says, is the massive carbon capture and storage (CCS) project proposed by the Pathways Alliance, a consortium of oilsands companies. CCS involves capturing and storing carbon dioxide below ground, though some environmentalists are skeptical about the safety and viability.
"There's been more than two years of arguing about the fiscal terms, the backstopping for uncertainty, you know, those kinds of things," said Masson. "And so this big investment that would help to decarbonize oil sands production has yet to take shape."
Qualified praise
Trevor McLeod, a former director with Enbridge and with the Canada West Foundation, says Trudeau does deserve credit for having environmental ideals — even if the execution left something to be desired.
"I think that the focus on emission reductions was deeply necessary and he deserves credit for that, but he seems to intentionally cultivate conflict," said McLeod. "That maybe limited his ability to actually make a real difference on climate."
Janetta McKenzie, oil and gas program director with the Pembina Institute, also gives Trudeau points for effort.
"It's obviously been a bit of a tumultuous last couple of years, but ultimately this government has progressed and advanced some pretty key pieces of oil and gas emissions regulation," said McKenzie, with the clean energy think-tank.
In environmental circles, Trudeau has also gotten flack for not doing enough to crack down on emissions in the oil and gas sector.
Notably, he bought the Trans Mountain Pipeline for $4.5 billion, despite the cost and the major pushback from environmentalists.
It took plenty of time and money to get the project over the finish line, but since completion it has contributed to a huge boost in oil production. It's allowed the industry to reach international export markets and lifted the GDP of both Alberta and the country.
"The fact that the federal government came in at the last [minute] was critically important, and it has already shown to be immensely valuable not just for the industry, but for the country as a whole," said Hall Findlay.
Still, she qualified the praise, saying the political uncertainty at the time of the purchase was so significant the federal government had no choice but to step in.
Rafi Tahmazian, a retired energy portfolio manager, offered a similar criticism.
"Our government was painted into a corner and had to do this thing and we did it at the expense of Canadians' pockets," said Tahmazian, referring to the project's major cost overruns.
Oil and gas stocks climbed Monday
With Trudeau now prepared to leave office, the sector is hoping for a more positive relationship with the country's next leader.
Already, The Canadian Press reported oil and gas stocks climbed Monday on the news of Trudeau stepping down.
"Today is a fantastic day for energy investors. It's one I've been praying for for many, many years," said Eric Nuttall, partner and senior portfolio manager at investment firm Ninepoint Partners, speaking on BNN Bloomberg.
"Today's announcement, I think, is the beginning of the elimination of the political risk discount being applied to our stocks."
Still, it remains to be seen if a change at Rideau Cottage will spell the end of bickering between industry and Ottawa.
After all, history has proven that even early enthusiasm doesn't always turn into a long and happy relationship.