By Kevin Orland and Robert Tuttle
International investors, who have been wary of the Canadian energy industry, needed this election to send them a clear signal about the government’s attitude toward the sector, and Monday’s results failed to provide that, according to the head of the largest Canadian energy industry trade group. Trudeau’s Liberals were on track to win 155 seats in the House of Commons, short of the 170 needed for a majority. The NDP took 25 districts, giving the two parties a combined 180.
No Clear Direction
“A minority government does not give them that clear direction, so it will be incumbent on the government to be very clear, very early on, about what their plans are, and I hope that’s a positive message to global investors around energy,” Tim McMillan, president of the Canadian Association of Petroleum Producers, said in an interview Monday night.
McMillan said he’s not concerned about the Trans Mountain expansion being canceled because it has all of its approvals, and there are no remaining “decision points” that the federal government could use to block it.
Others in the industry are more worried about how they’ll fare under a Liberal-led minority government. Whitecap Resources Inc. Chief Executive Officer Grant Fagerheim said the election’s outcome will be a factor in the oil producer’s capital spending plans for next year, with the results probably prompting the company to spend less and keep production steady.
“This result brings a significant amount of uncertainty for the industry for a significant amount of time,” Fagerheim said in an interview. “These results will be perceived as a negative for all businesses across Canada, but especially for the oil and gas sector.”
Tristan Goodman, president of the Explorers & Producers Association of Canada, which represents small- and mid-sized energy companies, said he doesn’t think that he results are a “crisis” for the industry, but that companies will be seeking more clarity on the new government’s priorities.
“We’ll be looking for stability and looking for them to fulfill commitments that already have been made,” Goodman said in an interview.