For many constituents of the energy-dependent economies of Western Canada, the mood is glum after Justin Trudeau’s Liberal Party secured a second mandate — albeit one reduced to minority status — despite not winning a single seat in either Alberta or Saskatchewan.
The provinces’ energy producers are not optimistic the federal Liberals can remedy the weak oil prices, slow demand and increased consolidation impacting the industry. Indeed, one day after the election, employees of Calgary-based energy giant Husky Energy Inc. told BNN Bloomberg that hundreds of jobs will be affected by a recent round of layoffs, illustrating the struggles felt across Canada’s oil patch.
Below, energy executives, investors and business leaders weigh in what’s fuelling the growing disillusionment in Western Canada.
Preston Manning, former Reform Party of Canada leader
“The unfairness of the equalization program, Alberta contributing billions and billions of dollars over the years, a lot of it going to Quebec. And then when Alberta’s economy gets into trouble, no reciprocity at all. The failure of the federal government to provide unobstructed transportation infrastructure corridors to the Atlantic and Pacific and the Artic. That’s a huge problem and a cause of unrest. The internal barriers to trade and the inability of the government to use its constitutional power to deal with it. And extremism rather than balance on the energy-environment front. These are huge — the roots of that alienation, [is something] the federal government and the federal Parliament have to address if they want to quell the separatist sentiment in Western Canada.”
Daniel Halyk, president and CEO, Total Energy Services
“We’re running I believe 150 rigs today in Canada. That’s pathetic for this time of year. ... “If there’s no work, there’s no jobs. So we’ve seen a tremendous increase in our business in the United States, in Australia. We employ around 2,500 people in total and increasingly that is occurring in the United States and Australia. Our headcount in Canada unfortunately has been on a steady [decline].”
John Manley, senior business advisor, Bennett Jones and former CEO of the Business Council of Canada
“I think it’s hard to perceive in Ottawa or in Toronto, for that matter, just how disconnected from the Canadian economy Western Canada, particularly Alberta, feels at the present time. Whereas the rest of the country is doing quite well, thank you very much. Unemployment rates at record lows, jobs being created. In downtown Calgary right now it just doesn’t feel that good. So making sure that the policymakers in Ottawa really understand the depth of concern there is something that the prime minister is going to have to address. And it’s not going to be made any easier by having lost his MPs that previously came from Alberta.”
Jim Davidson, former deputy chairman, GMP FirstEnergy
“I believe that Husky won’t be alone in laying off additional people now that the results of this election are known. I believe that the sector will continue to underspend. They will continue to conserve capital. They will continue to pay off debt. They will continue to buy back shares because of their current level of undervaluation, which is at a historical low. And I would assume that the stocks would continue to meander around this bottom.”
“Alberta has been the driving force in the confederation over the last 30-plus years and propping up the provinces that have underperformed. They were willing to do that, they were able to do that, they were happy to do that, but right at the moment they’re feeling alienated and underappreciated. And my sense is that even though Premier Jason Kenney is a pragmatist and a federalist by nature, he will be forced to listen to his constituents and might become more truculent than he has in the past and possibly seek to have Alberta position itself in a more autonomous fashion in the way that Quebec has done so within this confederation.”
Gwyn Morgan, former CEO, Encana
“It becomes more than just economics. It becomes, what is our place in this Canada? Are we appreciated? Does anybody really care about us? Two-thousand workers get laid off in a plant in Ontario, autoworkers … and the prime minister goes and visits with the people who got laid off in the factory — never came to Alberta at least to talk about that issue. It’s sort of a feeling of alienation, which is the big word right now. But it’s really a hurt — a deep, deep hurt that these people feel. They’re proud of what they do, they’re proud Canadians. And they feel really that they don’t really have a future here.”
Martha Hall Findlay, CEO, Canada West Foundation
“Just to be clear: ‘Wexit’ is the idea of a very small group of people. There is, however, a lot of interest in the larger question. There’s a lot of money, there’s a lot of intellectual heft going into the whole question of possible separation. People dismiss it. They say: ‘Well it’s just Alberta. Alberta’s landlocked, that wouldn’t make any sense.’ This is different than what we saw in the 1980s. This involves a much bigger region — Alberta, Saskatchewan, the northern part of British Columbia — so not a landlocked region. A lot of serious thought (is) going into this. There’s no question the rise of the Bloc Quebecois in Quebec is adding fuel to (the idea of): ‘If they can, so can we.’ I am a Canadian. We do not support the idea of separation, but one of my concerns is that the rest of the country just does not understand how serious it is.”
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