'A sad day': Frustrated oilpatch braces for more Trudeau (and more job losses)

After the oilpatch celebrated the victory of the UCP government in Alberta in the spring, many in the sector were hoping for a double dose of good fortune in 2019 with a Conservative victory on the federal stage.

Industry leaders say Liberal re-election will hurt investment, employment and hope for new pipelines

An oil pumpjack stands under a clear blue sky.
After the Liberal re-election, some oilpatch leaders expect further job losses in Western Canada. (Kyle Bakx/CBC)

The president of oil and gas producer Whitecap Resources expects the mood in the office today will be "not good" after the Liberals were able to hold onto power with a minority government.

After the oilpatch celebrated the victory of the United Conservative Party government in Alberta in the spring, many in the sector were eager for a double dose of good fortune in 2019 with a Conservative victory on the federal stage.

Those hopes were dashed.

Not only did the Liberals win, but the minority victory adds an extra element of uncertainty.

Grant Fagerheim, with Whitecap, anticipates many of his employees will now be asking: "Where do we go from here?"

The Conservative Party had made campaign pledges seen as much more friendly to the oil and gas industry, such as an energy corridor across the country and much less stringent environmental policies. (Kyle Bakx/CBC)

The oilpatch's woes began before Trudeau was elected in 2015, but the sector has often complained about some of the Liberal Party's policies, such as the carbon tax, the proposed clean fuel standard, changes to how pipelines and other major projects are reviewed and a ban on oil tankers off a part of British Columbia's coast.

Some companies were holding back on making certain decisions, such as hiring and proceeding with projects, pending Monday's election outcome.

"We have to definitely look at pulling back on spending," said Fagerheim, adding further job losses in the sector would be "a travesty." 

The Conservative Party had made campaign pledges seen as much more friendly to the industry, such as an energy corridor across the country and much less stringent environmental policies.

Prime Minister Justin Trudeau speaks with workers at the Trans Mountain Terminal in Edmonton in July 2019. (Jason Franson/Canadian Press)

Trudeau's spotty record

Trudeau seemed to have a hot and cold relationship with the oilpatch. He has visited the province every year since the 2015 election, including a few trips specifically to Fort McMurray. The Liberal government funded innovation in the energy sector and gave $1.6 billion in support to the oilpatch last year.

The Liberals also purchased the Trans Mountain expansion pipeline when it looked like the project was falling apart.

Still, the oilpatch never seemed to trust Trudeau, at least in part because of his father's decisions decades earlier that crippled the industry — namely, the National Energy Program. The policy was aimed at asserting more federal control over the energy industry and contributed to substantial job losses in Alberta and a real estate market crash.

Trudeau's comments about "phasing out" the oilsands in 2017 seemed to confirm doubts in Alberta, even though the prime minister was talking about a slow transition away from fossil fuels.

Trudeau tours Suncor's Fort Hills oilsands facility near Fort McMurray in April 2018. (Jason Franson/The Canadian Press)

The Trans Mountain purchase received limited support in Alberta, since many blamed the federal government for not supporting the project more before it had to step in as a last resort.

The election result is "a sad day for Western Canada. It probably means more job losses for Alberta," said Robert Cooper, with the institutional sales and trading team at Calgary-based investment firm Acumen Capital Partners. 

He anticipates companies will slash spending and investors will further shy away from the oilpatch.

"We've already seen the massive slowdown in drilling and overall activity. When you have a government that is strangling you out of existence, your risk tolerance just went out the door," he said.

What the sector deems anti-energy policies of the last four years will continue, Cooper said, "especially if [the Liberals] are pushed from further on the left — then I think it's clear the strangulation of Alberta and Saskatchewan's resource-based economy will continue."

What about that pipeline?

Besides low oil and gas prices, the biggest challenge for the sector is a lack of new export pipelines. Trudeau can hardly be blamed for some of the problems, since proposed projects like Enbridge's Line 3 replacement and TC Energy's Keystone XL are fully approved (and largely constructed) in Canada, but are stalled in the U.S.

Critics have blamed the Liberals for the failure of other pipeline proposals, such as Energy East by TC Energy.

Hundreds of pipes are stacked at a storage yard for the Trans Mountain expansion project, near Hope, B.C. (Kyle Bakx/CBC)

What happens now to the Trans Mountain project will be a prime focus for the oilpatch.

Political scientist Lori Williams, with Calgary's Mount Royal University, said the project should continue to proceed since both the Liberals and Conservatives support the pipeline expansion and no vote is needed in Parliament as construction slowly ramps up.

Cooper, with Acumen Capital, isn't making any assumptions, especially if the Liberals form a coalition government.

"It's definitely not certain that Trans Mountain is a go."

Oil export pipelines are at capacity in Western Canada and, as a result, the industry is receiving a discount price for its crude. Companies are ramping up oil shipments by rail to help alleviate the bottleneck.

While the energy sector and the Prairie provinces were of little focus during the federal election campaign, the oil and gas industry remains a key driver of the economy and represents the country's largest export.

While the economy and job creation are thriving in most parts of the country, Alberta in particular continues to struggle. The unemployment rate is high, and more than 20 per cent of the downtown office towers in Calgary are vacant.

The city's mayor is hopeful the Trans Mountain project will proceed following the election result, but he's growing impatient.

"If they wanted to shut it down, they could have shut it down," Naheed Nenshi said about the Liberals purchasing the pipeline project. "But the point is it hasn't been built yet."

And with Bill C-69, which Nenshi says would make infrastructure projects including pipelines more difficult to build, "you can see why people are getting frustrated."


Kyle Bakx

Business reporter

Kyle Bakx is a Calgary-based journalist with the network business unit at CBC News. He files stories from across the country and internationally for web, radio, TV and social media platforms. You can email story ideas to