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With Keystone XL effectively dead, where does Jason Kenney go from here?

Alberta Premier Jason Kenney has spent the last number of days calling for consequences and compensation after U.S. President Joe Biden revoked the permit for the Keystone XL pipeline on Wednesday.

Columnists dig in on the premier's rocky start to 2021 on the latest episode of West of Centre

Alberta Premier Jason Kenney makes his way to the chamber at the Alberta Legislature in Edmonton on March 20, 2020. With the cancellation of Keystone XL — and a myriad of other brewing political controversies — the premier's year is off to an inauspicious start, say columnists on the West of Centre podcast. (Jason Franson/The Canadian Press)

Alberta Premier Jason Kenney has spent the last number of days calling for consequences and compensation in the aftermath of U.S. President Joe Biden revoking the permit for the Keystone XL pipeline.

But Canada's options appear limited, and are unlikely to include the introduction of sanctions, as the premier has suggested. 

In an interview Saturday on CBC's The House, Canada's ambassador to the United States even said it was time to let the project go in favour of other pressing bilateral issues.

So where does the premier go from here? And how can Kenney navigate a myriad of other brewing political crises simultaneous to Keystone, including bubbling anger over the government's coal policy and looming challenges surrounding vaccine shortages?

Jason Markusoff with Maclean's magazine told CBC's West of Centre podcast that Kenney's experience as premier likely hasn't unfolded exactly the way he expected.

"He had a lot of very set ideas of what he was coming back to [Alberta] to accomplish, and the last two years have been a dramatic test of his perceptions of Alberta, and the world has changed so much," Markusoff said.

"The challenges he's faced, and his adjustments — or lack of adjustments — have really animated his difficulties over the last couple of years."

  • Listen to this week's full episode of West of Centre here:

'Picking winners and losers'

Last March, the Alberta government agreed to invest around $1.5 billion as equity in the Keystone XL project, along with billions more in loan guarantees.

But that move seemed to run contrary to Kenney's own arguments on "picking winners and losers" when it comes to governments investing in or providing loan guarantees to major industrial projects.

"I would get the Alberta government out of the business of business ... out of the losing business of picking winners and losers," Kenney said in a speech posted on the government-run Unite Alberta Twitter account in 2017. 

In the speech, Kenney cites decisions made by the Don Getty government as being representative of failed efforts to diversify Alberta's economy.

"They all went down, as government interventions in the economy tend to do," Kenney said. "Because when politicians are risking your money instead of their own, you might as well send them to the casino."

Journalist and political commentator Graham Thomson told West of Centre that when it comes to Keystone XL, Kenney made a bad bet as other indicators signalled the project was on rocky ground, even though Biden didn't vow to scrap the project until May 2020.

"You got back to the op-eds written back then, and they were talking about the risk involved," Thomson said. "There was nobody else willing to bring this forward. In fact, TC Energy was going to wait and see what happened at the U.S. elections before it did anything else.

"It was hedging its bets, it was being really careful. Whereas Kenney jumped in with both feet."

The compounding effect

Kelly Cryderman, who covers politics for the Globe and Mail, told West of Centre that though she thinks the premier deserves to wear this controversy, a Biden victory was hardly assured last March.

"I think the government held out hope, however risky, that if they got some pipeline built — if they got the cross-border portion of the pipeline built — that the president would not do what he has the absolute right to do under the executive orders and tear it out of the ground," Cryderman said.

President Joe Biden signs his first executive orders in the Oval Office of the White House on Jan. 20 in Washington. (AP)

Cryderman said although not every government would have jumped into a pipeline deal on Keystone XL the way the Kenney government did, any Alberta government would have considered some kind of investment.

"These pipelines are so important to getting a better return on every barrel of oil produced, and I think that's been lost in the discussion," Cryderman said. "People are so angry at Jason Kenney right now over his handling of the pandemic, over his aggressive style with the federal government, over his stance on coal and provincial parks.

"That's all funnelling into the way his investment in Keystone XL is being viewed."

'Authored to destiny'

Kenney has made the argument in past days that the federal government has failed to advocate for Keystone XL in the same way it did for steel and auto workers.

"I strongly urge you to ensure that there are proportionate economic consequences in response to these unfair U.S. actions," Kenney said in a letter to the prime minister.

WATCH | Kenney discusses his call for reprisals over Keystone cancellation:

'The government of Canada told us they supported this until they folded': Kenney

Power and Politics

1 month ago
2:14
Alberta Premier Jason Kenney says the federal government 'folded' in response to U.S President Joe Biden's decision to revoke the Keystone XL pipeline. 2:14

But while the steel tariffs were met with retaliatory tariffs, those steel tariffs were condemned as being illegal under global trading rules, while Biden's executive order is not.

In Markusoff's view, the outcome on Keystone XL had been "authored to destiny" five years ago — and there may have been a sense in Ottawa that the battle had been lost.

"If there is a risk of other [pipelines] actually getting nixed or cancelled or stopped from currently running, then absolutely Trudeau should be aggressively fighting that," he said.

'Rattling the saber'

On Wednesday, Kenney said that if the federal government doesn't approach Keystone XL as it did with aluminum and steel, then Alberta would "go further in our fight for a fair deal in the federation."

The comment was a reference to Alberta's so-called fair deal panel, a series of measures being studied by the province that would purportedly help it assert its standing within Confederation.

Prime Minister Justin Trudeau meets with Alberta Premier Jason Kenney on Parliament Hill in Ottawa on Dec. 10, 2019. Kenney has written to the Prime Minister officially asking for retaliation or compensation over the Keystone XL decision. (Sean Kilpatrick/The Canadian Press )

Thomson said he viewed those comments as Kenney "rattling the saber."

"All of the things he's talking about won't build a pipeline, won't create jobs, in fact, it's going to cost money," he said. "How that helps Alberta's base, bottom-line, economics, and moving ahead with climate change and environmental issues, I have no idea."

But Cryderman said even if some Albertans disagree with Kenney's strategy, the province does have some legitimate grievances with how the oil industry has been championed federally.

"Oil [is] the country's biggest export, period," Cryderman said.

"If there are no Liberal MPs in Alberta and Saskatchewan … and there's not the population here and there's waning power of the oil industry, what motivation does the federal Liberal government have to really be in the corner for Alberta interests?"

  • Listen to the complete West of Centre podcast series right here.

With files from CBC's West of Centre

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