News & Updates

    The Morning Brief - 04.23.19

    Posted by Bruce Carson on Apr 23, 2019 8:13:03 AM


    Economy—Trans Mountain Pipeline

    This week is the second of a two week break period in the Parliamentary calendar. This is the last two week break before the Senate and House rise for the summer and the fall election, unless, of course, it is called earlier. The only sittings break after this week comes with the Victoria Day holiday.

    All this to say we are getting into crunch time when the government will want to see progress on legislation and certainly with respect to Bill C-48-tanker ban bill and C-69, the no more pipelines bill, Senators opposed to these bills would prefer fundamental amendments or see them die on the order paper, rather than passed in their present form. The government will want its budget bill passed as it fundamentally changes the Liberal’s approach to the border and asylum seekers.

    This week will be dominated by at least three matters; the provincial election today in PEI, the early days of transition to government by Premier-designate Jason Kenney and the Governor of the Bank of Canada, Stephen Poloz dealing with interest rates tomorrow and presenting the Bank’s Monetary Policy Report.

    With regard to PEI, pollsters and commentators see the result as a possible three way split among Liberals, the PC Party and the surging Greens. How the results break out, we will know this evening but again, there are indications that Canadians are not satisfied with the status quo and may be ready to adopt a new political strategy.

    In Alberta, as Kenny’s transition team settles in to work with the swearing-in of the cabinet slated for a week from now, April 30th, it will find that the fiscal situation in the province is worse than they thought, that always seems to be the case, and that a number of election promises will be more difficult to implement than originally thought. And that push-back from Ottawa and perhaps other provinces should be considered. This was the experience of the Harper transition team led by Derek Burney in 2006 but steadfastness and perseverance are important traits for any transition team if it wants to implement immediate change.

    And in relation to the Bank of Canada there should be no surprises regarding interest rates, if there are to be bumps along the way they will be set out in the Monetary Policy Report which will look at growth numbers in Canada and the United States. The question that will be answered is, does the Bank in its forecast agree with the numbers set out in the federal government’s March budget?

    Finally, it will be interesting to see if the Conservative Party and NDP are able in public appearances this week, to breathe new life into the SNC Lavalin affair or will that have to wait for the daily grind of question period for its revival? 

    Trans Mountain Pipeline

    It didn’t take long after the Alberta election for dates to change in relation to the final approval to be given by the federal cabinet to the project. During the dying days of the campaign Premier Notley was assuring Albertans of a decision before the end of May, probably May 23rd. In a call between Prime Minister Trudeau and Premier-designate Kenney, Kenney was informed that due to a request for more consultation time from Indigenous groups; the date for a cabinet decision would now be June 18. Kenney said that he agreed with this approach as it is important to cross Ts and dot all the Is.

    This delay however, has raised a number of questions regarding Trudeau’s intentions that could affect the future of the pipeline.

    First, the new date comes after the House of Commons rises for the summer recess and the pending fall election, meaning that question period will no longer be available to the opposition to deal with whatever decision comes from cabinet.

    Second, it also comes after the first legislative session of the Kenney government begins and therefore after its legislative agenda has been set out in a Throne Speech and the first series of Bills have been tabled by the Kenney government. The first piece of legislation to see the light of day will be to repeal the Notley carbon tax. The Trudeau Liberals will be able to see how far this legislation goes and will the oil sands emissions cap be affected? There has not been much discussion of the cap in recent days.

    Third, it gives the Trudeau cabinet some time to consider its response to the report from the NEB on the effect of increased tanker traffic which found the project to be in the national interest  and the Indigenous consultations carried out under the direction of former Supreme Court of Canada Justice Frank Iacobucci. What will the Trudeau cabinet be considering; whether the pipeline should be given approval without the Notley climate change plan in place or whether to be tough and tell Canadians and specifically Albertans, who have just voted in a provincial election, that without that climate plan in place there will be no pipeline?

    As has been noted here previously, Chantel Hebert and Althia Raj in their columns have addressed this issue and now former national director of the Liberal Party Jamie Carrol, has dealt with this in a blog post. Hebert put the choice for Trudeau “between salvaging a minimum of credibility for his climate change policy or living up to his oft repeated assessment that the expansion of the Trans Mountain pipeline is in the national interest.” Raj wrote “Trudeau now has the opportunity to walk his talk. He can say no to Kenney. No strict environment plan, no pipeline. That was the bargain Trudeau sold to Canadians.”

    Carroll approached this matter from a political perspective dealing with the number of seats to be won or lost based on the pipeline decision. He wrote that the only places that the Liberals can expect to gain seats are in Quebec and British Columbia. Both are anti oil pipeline provinces. So no pipeline approval until Alberta plays ball on climate change.

    This plays into the National Post editorial on the task ahead for Kenny’s government “major progress in Alberta will require a sea change in Ottawa, to either its attitude or its government. Most likely the latter.” The editorial stressed that if Kenney cannot deliver on promises because he is blocked by Ottawa, this could become a threat to national unity as Alberta is supported by provincial governments in Saskatchewan, Manitoba, Ontario and New Brunswick.

    Given his interview on Evan Solomon’s Question Period on Sunday, it would seem that Kenney is ready for such a challenge as he said that the “grand bargain” died on election day. He added that the idea of “social licence is a sham.” Kenney also said he would “do what I can to elect a federal Conservative government. I make no apologies for that.”

    So on June 18, when the Trudeau government delivers its conclusions on the Trans Mountain pipeline, no one should be surprised if the approval is conditional on the Alberta government complying with conditions requiring the implementation of climate change measures satisfactory to the Trudeau government.

    A pipeline approval conditional on adopting climate change measures in Alberta would put fighting climate change front and center in the upcoming election campaign, where Trudeau wants it. For the Conservative Party, it will need a comprehensive environmental plan but the party can also attempt to frame the ballot question on managerial competence, ethics and the economy, particularly after the SNC affair.

    The campaign preview will roll out with the cabinet decision on the Trans Mountain pipeline on June 18.

    To Come

    --today, provincial election in PEI

    --today, wholesale trade numbers for February to be released

    --today, Senate Energy Committee is holding hearings this week on Bill C-69. Today in St. John’s,  NL, tomorrow in Halifax, then Thursday in Saint John, NB and Friday in Quebec City

    --April 24, Bank of Canada deals with interest rates and releases its Monetary Policy Report

    --April 27-28, Prime Minister Abe of Japan visits Ottawa

    --April 30, GDP numbers for February to be released 

    --April 30-May 1, U.S. Fed meets

    Topics: Morning Brief

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