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Canada votes for status-quo Harper builds on numbers without achieving absolute majority and faces three parties with strong environmental policies Gary Park For Petroleum News
Stephen Harper will remain Canada’s prime minister with a slightly strengthened hold on power, but facing three opposition parties which claimed a combined 54 percent of the total vote and all advocating a tougher approach on greenhouse gas emissions.
Whether they will be eager to test their policies in the House of Commons during a time of economic chaos is another matter.
Harper has said his re-elected government will press ahead with its plan to reduce GHGs in absolute terms by 20 percent from 2006 levels by 2020.
He has also vowed to work with governments in Canada’s provinces and northern territories and North American trading partners to develop and implement a continental cap-and-trade system for GHGs and air pollution, targeting implementation over the 2012-2025 period.
No clear majority Having seen his hopes for a clear majority evaporate in Quebec, where voters rebelled against plans to slash cultural spending, Harper’s Conservative Party will send 143 Members of Parliament to the new House of Commons, up 19 from the pre-election level.
The once-dominant Liberal party went into a tailspin, electing 76 MPs, down 27 from the 2006 vote, and the Bloc Quebecois, which only contests seats in Quebec where its ultimate goal is separation of the French-speaking province from Canada, was virtually unchanged with 50 MPs.
Easily the biggest winner was the left-leaning New Democratic Party under Jack Layton, which climbed from 29 MPs to 37.
Although unable to win any of Canada’s 308 constituencies, the Green Party collected 7 percent of the vote, eating into areas where the Liberals might otherwise have bolstered their numbers.
In an election where issues other than the economy were wiped off the table, Harper declared his top priority will be to take “whatever steps are necessary” to protect Canadians from the ravages sweeping the globe.
“These are challenging times ... but I want to assure Canadians that, together, we will weather the storm,” he said.
Harper did not outline specific measures that are being explored by the government, Bank of Canada and major banks, although there is speculation that his six-point plan could involve government guarantees on bank loans.
He would only concede the options being studied “do not involve a significant outlay of taxpayers’ money.”
The plan involves the recall of Parliament this fall and the tabling of a fiscal update by the end of November.
He will also convene a meeting of provincial and territorial premiers to discuss the financial crisis.
Most political observers think there won’t be much appetite among politicians or Canadians to advance costly environmental measures. They believe it’s unlikely that Layton will get enough backing for his promise to halt any new oil sands development until carbon emissions are capped.
Almost by default, given the shaky outlook for oil prices and the inability of companies to finance multi-billion dollar ventures, the oil sands seem headed for a drastic slowdown.
Similarly, there was little evidence of support among voters for the Liberals’ so-called Green Shift plan, outlining plans for a revenue-neutral carbon tax that would offset such a tax by introducing lower income taxes to limit the impact on Canadians.
The policy would have immediately imposed a tax of C$10 per metric ton of GHGs, rising to C$40 within four years — almost a copy-cat version of British Columbia’s highly unpopular carbon tax.
David Keith, a climate change scientist at the University of Calgary, accurately predicted that the Green Shift plan would get “thrashed pretty hard” by voters.
Gary Leach, executive director of the Small Explorers and Producers Association of Canada, said the Liberals had failed to adequately explain how their approach would reduce GHGs.
He noted that even environmental activists had conceded they could only “resonate and connect” with the bulk of Canadians when everyone had regained a feeling of economic security and felt confident about the future.
Raw bitumen ban still alive The one troubling issue that remains alive is Harper’s pledge to stop companies from exporting raw bitumen for upgrading to any countries with lower GHG standards than Canada — a policy seen as taking direct aim at plans by Enbridge and Kinder Morgan Canada to build pipelines from Alberta to tanker ports on the British Columbia coast for shipment to Asia.
Layton’s NDP had made a similar promise, stating that “because the need for oil and gas will not disappear overnight we will discourage bulk exports of our unprocessed resources to the U.S. and China and encourage responsible upgrading, refining and petrochemical manufacturing here in Canada.”
The NDP also said it wants to make “big polluters pay” through a cap-and-trade system, setting fixed limits on pollution and tough penalties on those who exceed the limits.
The party’s long-term target is to reduce GHGs to 25 percent below 1990 levels by 2020 and 80 percent by 2050.
Although Harper has shown no taste for NDP policies, he may be forced to make some concessions to keep his hold on power, given that the Conservatives and NDP together have more than enough votes to pass legislation.
Harper has yet to lay out the specifics of his bitumen export ban, leaving Enbridge’s Northern Gateway project in an uncertain state.
However, Chief Executive Officer Pat Daniel doubts a ban would affect Gateway because his company is eying a broader market in Asia and California rather than a localized market in China.
Interest in Gateway Regardless, the project is drawing a lot of interest and Enbridge is pondering making additional investment units available to potential shippers, giving them priority access to the project that is designed to ship 525,000 barrels per day of bitumen out of Canada and import 193,000 bpd of condensate to thin petroleum products for pipeline transport, with an in-service date of 2014-15.
So far, Enbridge has raised C$100 million from Western Canadian producers and Asian refiners through the sale of 10 units at C$10 million each, giving those backers an option to have status as founder shippers and to take an equity stake in Northern Gateway.
An application to the National Energy Board is expected to be ready in 2009, but timing has not yet been determined.
Enbridge is also scheduling open houses in British Columbia and Alberta this fall and talks with First Nations on agreements that aboriginal communities have a chance to own a portion of the pipeline.
Kinder Morgan, although operating with a low public profile, is also selling a 400,000 bpd TransMountain pipeline to deliver Alberta crude to Asian markets, with a northern expansion of its existing system to Kitimat and a southern expansion to the Greater Vancouver area and Washington state. The combined volume would be 700,000 bpd. A company spokesman said efforts are under way to attract shippers.
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