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Canada’s Trudeau Wants It All on Climate and Oil. It’s Failing Badly


By Theophilos Argitis

(Bloomberg) Justin Trudeau’s ambition was to forge a grand bargain to develop Canada’s resources. In trying to please everyone, he has pleased no one.The Canadian prime minister pledged that increased support for the environment and indigenous rights would help win the social license for major projects. It hasn’t worked out that way. The country’s long-running argument over its vast oil riches is boiling over, and Trudeau finds himself besieged on all sides.Resource proponents are up in arms over a decision Sunday by Teck Resources Ltd. to abandon a C$20 billion ($15.1 billion) oil development in Alberta because of policy uncertainty. The government is also being accused of being too slow to respond to protesters who blocked rail lines for more than two weeks in support of indigenous people opposed to a new natural gas pipeline.

But on Friday, Trudeau publicly encouraged police to clear the barricades — which fueled mistrust among indigenous and environmental groups that are part of his political base.

It’s an ominous start to his second term in power that foreshadows what is likely to be Trudeau’s biggest challenge in the years ahead. Having raised expectations that he can find a solution to one of Canada’s most divisive issues, he’s struggling to deliver.

Progressive ‘Trap’

Failure risks making the problem worse — hardening differences, creating a policy stalemate and stoking disenchantment that could fuel polarization in a country that’s been largely untouched by populist politics.

“The crisis of progressive political leadership around the democratic world is reuniting what some people call the brown and green factions of progressive political parties,” said Robin Sears, a longtime political strategist who has run campaigns for the opposition New Democratic Party. “Those who think that social justice and economic development must come first and those who think climate response must always lead. And these guys are caught in that trap.”

It’s a challenge that Trudeau is fully aware of after an October election that saw his party lose its majority and receive only one third of the vote, the lowest share for any government in Canadian history. More disturbing is how the election exposed a stark regional split.

The main opposition Conservatives — who have championed the oil sector — have most of their seats concentrated in four resource-dependent western provinces. The Liberals won largely in areas like Ontario, Quebec and large cities where support for tougher climate change policy is stronger.

Polls suggest Canadians from either side of the divide remain unenthusiastic about Trudeau’s ability to bring results. Support for the Liberal Party is little changed since the election, at about 33%. But according to weekly tracking by Nanos Research Group, the government is now trailing the Conservatives under a lame-duck leader.

As a result, “diminished ambitions may become the default for this government,” said Nik Nanos, chairman of the polling firm.

To be sure, Canada has a long tradition of politics that split differences and support for middle-ground policies remains high. No government has ever been too far away from the center.

According to Sears, the problem isn’t that Canada’s differences on energy can’t be reconciled. Rather, he blames the current stalemate on poor execution by Trudeau’s government that has failed to build trust on either side.

“You have to build the confidence and trust of contending sides that you are an honest broker and you are an authentic champion of a compromise that has something in it for everybody,” Sears said. “Until and unless you do that, every time there is a setback people will call you a fraud.”

Anger Abounds

Whatever the causes, there is growing concern Trudeau’s energy policy risks alienating everybody.

Western Canadians who rely most on the oil sector are as angry as ever, led by the relentlessly critical premier of Alberta, Jason Kenney. Many top Canadian executives — usually supportive of the middle-ground approach — believe Trudeau has been too one-sided and not done enough to advocate the benefits of resources. They cite how two major pipeline options were taken off the table and worry the government’s new environmental assessment legislation will do lasting damage. Meanwhile, capital keeps marching out of Canada’s oil industry.

“They haven’t been very good at telling the story about how important resources are to Canada’s economy and to making sure we can afford all the other things we want to do,” said John Manley, a former deputy prime minister under Jean Chretien’s Liberal government. “I think we got into this jam early on by not showing any flexibility on the resource development side while pushing for very strong measures on climate.”

Among many environmentalists, the feelings are mutual.

“The communications out of the prime minister’s office and the Liberal government more generally has been: We can have it all,” said Dale Marshall, national climate program manager for Environmental Defence Fund. “We can tackle climate change and grow our resources — which is code for the oil and gas sector — and it hasn’t worked because the two are at odds with each other.”

The resurgence of indigenous activism in recent weeks suggests things may only get tougher for Trudeau. After police dismantled one major rail barricade on Monday, protesters blocked key infrastructure in at least three others places across the country.



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