As investment flees the oil sands, Trudeau can no longer try to pass the buck

Canada is stuck.

As a country, we appear to be deeply divided over the policies needed to ensure our economy grows fast enough to sustain our standard of living and social programs, while protecting the environment and fulfilling our commitment toward reconciliation with Indigenous peoples.

In a country as diverse as ours, we will never achieve unanimity. But without a general consensus about how to proceed, we’ve condemned ourselves to immobility.

In recent weeks, Canadians have witnessed a breakdown of whatever consensus, however fragile, might have existed in the past regarding the development of the country’s non-renewable resources. It is no longer enough for the promoters of any resource project to pass through an environmental assessment review process and obtain the support of a majority of Indigenous peoples affected to proceed with a development deemed in the “public interest.”

A leadership void in Ottawa has allowed an entirely new set of hurdles to pop up.

In its desire to avoid offending anyone, Prime Minister Justin Trudeau’s government sends out ambiguous signals about the rules of the road. It has all but abdicated its responsibility for laying down the conditions for future resource development, creating a vacuum that has allowed fringe elements to define those conditions for the whole country.

“Literally, over the past few days, it has become increasingly clear that there is no constructive path forward,” Teck Resources Ltd. chief executive officer Don Lindsay said on Monday, after the company cancelled its proposed $20-billion Frontier oil sands project.

By referring to the blockades that have popped up across the country in opposition to the Coastal GasLink natural gas pipeline, Mr. Lindsay was all but conceding that it wouldn’t have mattered whether the Trudeau government approved the Frontier mine by the month-end deadline. The project would have sparked the same kind of illegal protests that have shut down parts of Canada’s economy over Coastal GasLink.

Frankly, Mr. Lindsay let Ottawa off too easily. He should have forced the Trudeau government to stake its ground and announce a decision, one way or another, on Frontier. Because what has been sadly lacking from Ottawa as a small number of protesters shut down critical infrastructure is a willingness to call a spade a spade and separate fact from fiction.

Mr. Trudeau has uttered platitudes about the blockades being “unacceptable” and “intolerable.” But why hasn’t he voiced strong support of Coastal GasLink, or stood up for the process that led to the pipeline’s approval in the first place? After all, if any resource project has obtained social licence to operate, it is the $6.6-billion pipeline that would supply a liquified natural gas plant in Kitimat, B.C. The pipeline enjoys broad support from Indigenous leaders, with the exception of a small number of hereditary chiefs whose claims of representativity are the subject of debate within the Wet’suwet’en Nation itself.

To be sure, even with federal approval, the business case for Frontier would have remained shaky. The 260,000-barrel-a-day mine could not have gone ahead without an expectation of higher prices in the future, support from a deep-pocketed partner and the assurance that additional pipeline capacity would have been available once Frontier was on-stream.

Still, we have reached a point in Canada where private investors are incapable of judging resource-development projects on their economic merits because the government of the day is unwilling to clarify where it stands on such projects in the first place.

Most members of the Liberal caucus, which does not include a single Alberta MP, are said to have been opposed to approving Frontier on the basis of its projected annual carbon emissions of four million tonnes. Still, the McInnis cement factory that opened on Quebec’s Gaspé peninsula in 2017 emits an estimated 1.8 million tonnes of carbon annually, despite contributing a tiny fraction of the jobs and taxes to the economy than Frontier would have provided. Yet, there was not a peep of protest from the federal Liberal caucus over a Quebec-backed project, with higher emissions intensity, that employs a few hundred people.

The Trudeau government only seems to act when it is compelled to. It strung Kinder Morgan Inc. along for months on the Trans Mountain pipeline expansion project until the company could no longer abide by Ottawa’s timeline. And so, the Trudeau government was forced to buy TMX, even though it appears to be unsure about whether it even wants to see the project built. At the very least, given Mr. Trudeau’s recent behaviour, there is no reason believe that he would take action to prevent similar protests as construction on TMX gears up.

Go ahead and blame Alberta Premier Jason Kenney and federal Conservative Leader Andrew Scheer for seeking to score political points by blaming Mr. Trudeau for “killing” Frontier. Instead of grandstanding, they should be extending a hand to the Prime Minister to help create, as Mr. Lindsay requested, a framework “that reconciles resource development and climate change, in order to produce the cleanest possible products.” That framework must include some form of carbon pricing and a legislated cap on oil sands emissions, both of which Teck supports.

Still, the buck stops with Mr. Trudeau and, for the country’s sake, he has to stop passing it.