After months of deadlock, it seems that the future of the North American Free Trade Agreement (NAFTA) is in serious jeopardy, with negotiators lashing out at each other in public for the first time last week.
In this context, the cancellation of the Energy East pipeline is an ever-greater tragedy for Maritimers and Albertans. And while Canadians still hope to be America’s best trading partners, the likelihood of a diminished agreement to both our communities and economies can no longer be ignored.
Canada is a nation with an abundance of natural resources, but due to our outdated infrastructure for transporting oil, we’re stuck with all our eggs are in one basket. Energy East promised the opportunity to diversify our export markets by getting oil to tidewater, as a result slashing the discount at which we’re forced to sell to the United States due to a lack of other options.
Now, in the aftermath of its cancellation, an alternative project proposed by Cianbro Corporation, known as the east-west corridor, would run through the northeast of the United States in order to avoid Quebec — the province which displayed the greatest opposition to Energy East. The governor of Maine has already stated that he’s fully behind it.
If there’s any hope of repairing this situation and getting such a pipeline built, we need to identify what went wrong.
A negative regulatory and business climate in the energy sector has been descending upon Canada.
With regard to Energy East, specifically, we saw ridiculous government policy, including the retroactive altering of approval requirements. The government blames the company for the decision, blithely ignoring the plain fact that the cumbersome regulatory process, including a separate duplicate review by Quebec, is what killed Energy East. More than $ 1 billion was already spent on the "process” before one centimetre of pipe was laid.
Canadians know that burning the shareholders of their own energy companies only sends business elsewhere.
Together, Trans Canada and Enbridge have spent more than $30 billion in the past year to acquire U.S. energy companies that will provide growth opportunities to offset what is being denied them in Canada. Trans Canada is also building five pipelines in Mexico, where the cost of regulatory review is about $5 million per pipeline and the timeframe for review is a matter of months, not years.
That money should have been spent in Canada.
Keep in mind, Energy East would have been a pan-Canadian, nation-building project — creating 14,000 jobs across Canada, with 3,800 in New Brunswick alone. This offered a substantial boon to New Brunswick’s economy in a time of difficulty.
Consistently ignoring the need to support economic development in both the Maritimes and Alberta, which have both contributed so much to this country only to find themselves struggling today, is nothing short of an attack on our federation. It brings insecurity to our federation, beyond simply threatening our economy.
This is why the Senate was the deal maker for our Confederation — one of its central purposes was to secure the interests of the smaller, Maritime provinces.
Not only was Energy East discussed in the Senate Chamber multiple times, but pipelines have seen thorough study in Senate committees. First, the Senate’s energy committee focused on how best to improve spill prevention after the Lac Mégantic disaster. Then, most recently, the Senate’s transportation committee looked at ways to modernize and depoliticize the pipeline approval process, while balancing this with a more inclusive regulatory process, in particular with regard to Indigenous peoples.
Unfortunately, our recommendations were ignored by the present government.
Canada is a resource nation. While Energy East might be cancelled, we still have time to turn this ship around. Reforms must be made now to help this country reach its full potential as a global energy supplier.
By ignoring the health of the federation and the geopolitics of commerce, it seems to be increasingly clear that this government simply lacks vision and leadership, always waiting to see which way the wind blows.
Building a pipeline to get oil to the Atlantic Ocean is a must— we simply can’t afford to be moving this slowly. I am still a believer that when there is a will, there is a way. We need action and we need action now.
Percy Mockler is a senator representing New Brunswick. He is chair of the Senate Committee on National Finance, as well as a member of both the Senate Committee on Energy, the Environment and Natural Resources and the Senate Committee on Official Languages.
This article appeared in the November 3, 2017 edition of The Telegraph-Journal.