Canada-U.S. trade war won't help oil sector, natural resources minister says during Keystone XL debate

Canada's natural resources minister accused the Opposition of beating their chests in a show of support for the oil and gas industry, during an emergency debate in the House of Commons regarding the Keystone XL pipeline expansion project Monday evening.

U.S. President Joe Biden scrapped the pipeline expansion's permit last week

Pipe waiting to be used in construction of the Keystone XL pipeline expansion is seen in Alberta in this September 2020 file photo. (Kyle Bakx/CBC)

Canada's natural resources minister accused the Opposition of beating their chests in a show of support for the oil and gas industry, during an emergency debate in the House of Commons regarding the Keystone XL pipeline expansion project Monday evening.

"Do we, as some are suggesting, start a trade war with our closest ally and largest trading partner, with the single largest customer for Canadian crude? ... I have not yet heard a single argument that would convince me a trade war is in the best interests of our oil and gas workers," Seamus O'Regan said. 

O'Regan said the new U.S. administration represents an opportunity to work together with a government aligned with Canada's priorities on clean energy, pointing to TC Energy — the Calgary-based company behind the Keystone project — committing to buying renewable energy to achieve net zero emissions. 

Last week, on his first day in office, U.S. President Joe Biden scrapped the pipeline's permit as one of multiple actions intended to fight climate change, effectively killing the $8-billion US project.

If completed, the 1,897-kilometre pipeline expansion project, first announced in 2005, would have carried 830,000 barrels of oilsands crude from Hardisty, Alta., to Nebraska, where it would then connect with the original Keystone pipeline that runs to U.S. Gulf Coast refineries.


Opposition Leader Erin O'Toole called for the debate earlier on Monday, accusing the government of not doing enough to advocate for the expansion.

During the evening's debate, which stretched until just past midnight in Ottawa, O'Toole described empty office towers and job losses in Calgary. 

"Canada has been dealt a serious blow … these are Canadians, thousands of them, being totally forgotten and left behind by this government," he said.

Prime Minister Justin Trudeau's Liberal government has repeatedly said it supports the project, and Trudeau expressed his disappointment with Biden during a call between the two nations' leaders on Friday. 

"We will stand up and have our workers' backs.… Let's talk TMX. We approved it, we bought it, we're building it," O'Regan said, referring to the federal purchase of the Trans Mountain pipeline expansion, which is under construction.

Alberta Premier Jason Kenney has called for sanctions against the U.S. in response to the permit's cancellation. Kenney's government invested $1.5 billion Cdn in equity in the project alongside billions in loan guarantees.The provincial opposition NDP is calling on the Alberta government to release documents containing details of that deal, calling it a risky one.

The project had been rejected under former president Barack Obama's government. It was later approved under former president Donald Trump, but Biden had repeatedly stated he intended to rescind that permit once elected. Canada's ambassador to the U.S. has said it's time to respect that decision, however disappointing it may be to proponents, and move forward. 

  • WATCH | Keystone XL pipeline project 'appears to be dead,' says Rachel Notley

Keystone XL pipeline project 'appears to be dead,' says Rachel Notley

10 months ago
Alberta NDP Leader and former premier Rachel Notley says that the Keystone XL pipeline project appears to be dead. U.S. President Joe Biden rescinded the presidential permit needed for the project on his first day in office. 1:19

Edmonton-Strathcona NDP MP Heather McPherson said Biden's decision should have come as no surprise given Biden's opposition and legal challenges of the project.

"Remember when Jason Kenney gambled on Donald Trump. He didn't gamble his money — he gambled ours … that was his plan to get jobs for workers in my province," she said. "Now, he wants to start a trade war with the U.S., the customer for 95 per cent of our energy exports."

Lakeland Conservative MP Shannon Stubbs said while the decision did not come as a shock, it underlines that Canada is in a vulnerable position when it comes to its energy industry as the U.S. has increased domestic production.

"With the stroke of a pen thousands of people are out of work in the middle of a global crisis ...  Canadians whose livelihoods depend on the oil and gas sector are rightfully anxious about their future," she said. 

Ramped up domestic oil production, along with alternative supply routes  has lessened U.S. reliance on the hundreds of thousands of barrels of oil that would have been pumped daily through the now cancelled Keystone XL pipeline, industry experts say. (TC Energy/The Associated Press)

O'Regan referred to climate change as an "existential crisis."

"The market has an important role here. It is the leading role in determining how investment decisions should be made, but it is our government's duty to set the parameters on that and to incent what we believe to be extraordinarily important goals, namely net-zero emissions by 2050. That is the goal we have set for ourselves, and many of our friends, colleagues and competitors around the world have also set that goal for themselves. This is an existential crisis, there is no question."

It's also an economic crisis for the many people across the country who worry they may be left behind, he said. "We cannot allow that to happen."

Former Green Party Leader and Saanich-Gulf Islands MP Elizabeth May said it would be extremely unfair to say those who think the Keystone expansion cancellation was a good decision don't care about workers losing their jobs.

"I would no more say that people who are supporting the oilsands are deliberately and consciously threatening my grandchildrens' future than I would say it's right to be celebrating when people suffer an immediate downturn in their economic prospects."


  • An earlier version of this story said Canadian Natural Resources Minister Seamus O'Regan referred to the permit's cancellation as an "existential crisis," a phrase that former Green Party Leader and Saanich-Gulf Islands MP Elizabeth May challenged. However, the Hansard, or transcript of the House of Commons debate, made it clear that this was a misunderstanding and O'Regan was actually referring to climate change as the 'existential crisis,' so the story was updated.
    Jan 26, 2021 9:37 AM MT


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