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Pipeline politics: Why $1.6B in aid for oil and gas industry is awkward for Canada

A closer look at the day's most notable stories with The National's Jonathon Gatehouse: Canadian taxpayers footing bill for billions in new subsidies for the oil and gas industry; mapping out Washington's political year ahead.

Newsletter: A closer look at the day's most notable stories

A rally in support of Alberta's oil and gas industry on Monday at city hall in Calgary. The demonstrators were demanding government action to help shore up the province's ailing fossil fuels sector. (Jeff McIntosh/Canadian Press)

Welcome to The National Today newsletter, which takes a closer look at what's happening around some of the day's most notable stories. Sign up here and it will be delivered directly to your inbox Monday to Friday.

TODAY:

  • Canadian taxpayers are on the hook for somewhere between $7.7 billion and $15 billion in recent initiatives to support for the oil and gas industry.
  • Mapping out Washington's political year ahead.
  • Missed The National last night? Watch it here.


Pipeline politics

Alberta's oil problems — too much production and not enough pipeline capacity to get it to foreign markets — are costing the province and the Canadian economy an estimated $80 million a day, according to Premier Rachel Notley.

But with both a provincial and federal election on the horizon, it's fair to say that the potential political price of the crisis is also weighing on the minds of Premier Rachel Notley and Prime Minister Justin Trudeau.

Over the past couple of days, there have been noisy and sizeable pro-pipeline demonstrations in both Grande Prairie and outside of Calgary's city hall, with crowds of oil workers and their supporters demanding more government action.

Oil and gas industry supporters at a pro-pipeline rally at city hall in Calgary on Monday. Today, Ottawa announced $1.6 billion in new support for the sector. (Jeff McIntosh/Canadian Press)

And now, the money is suddenly starting to flow in hopes of inducing the bitumen to do the same.

This morning in Edmonton, Natural Resources Minister Amarjeet Sohi and International Trade Diversification Minister Jim Carr announced a $1.6 billion federal aid package for Canada's oil and gas industry. The money is spread over a variety existing programs to help companies find new markets, invest in clean technology and train staff.

The move comes on the heels of an additional $1.6 billion in royalty credits and infrastructure support unveiled by the Alberta government in late November, and Notley's as-yet unpriced promise to buy two trains to haul 120,000 more barrels of oil per day out of the province by late 2019.

Throw in Ottawa's summer purchase of the aging Trans Mountain pipeline — $4.5 billion, with a promise to spend as much as $7.4 billion more for a planned expansion — and Canadian taxpayers now find themselves on the hook for somewhere between $7.7 billion and $15 billion in new support for an industry that was already receiving more than $3.3 billion a year in government subsidies.

A tanker truck used to haul oil products is seen at an oil facility near Brooks, Alta., in April. Alberta has had difficulty getting its products to out-of-province customers. (Todd Korol/Reuters)

All of which poses a different sort of political problem, given that Canada has repeatedly promised to eliminate the bulk of fossil fuel subsidies by 2025 as part of its greenhouse gas reduction commitments.

It was Stephen Harper's Conservatives who originally made the pledge to do away with "inefficient" subsidies in 2009, as part of its membership in the G7, G20, and the Asia-Pacific Economic Cooperation, explicitly recognizing that subsidies undermine efforts to deal with climate change and impede clean energy development.

The Trudeau Liberals reiterated the promise in 2015, making it part of their campaign platform.

Some progress has been made towards that goal, with the phasing out or tweaking of seven federal policies since 2011, but even before the recent spending spree it was clear that Canada was a long way from living up to its word.

In his spring 2017 report, the auditor general found that the Department of Finance along with Environment and Climate Change Canada — responsible, respectively, for the tax and non-tax portion of the commitment — hadn't yet defined what an "inefficient" fossil fuel subsidy was, let alone figured out a way to cut or phase them out.

An oil pump jack in a field near Calgary. A recent report from the Overseas Development Institute that compares all the G7 nations ranked Canada the worst at ending support for oil and gas production. (Todd Korol/Reuters)

And real numbers have been hard to come by.

Under pressure from environmental groups this past June, Jim Carr announced a study to pinpoint how much Ottawa and the provinces actually spend to support the fossil fuel industry, the results of which will eventually be made public.

A recent report from the Overseas Development Institute, a U.K. think tank, that compares all the G7 nations gave Ottawa low marks on transparency and ranked Canada the worst at ending support for oil and gas production.

By its figures, Canada was providing a total of $4.63 billion US ($6.25 billion CDN) in support to fossil fuel industries, the most per capita in the G7.

If you factor in the additional government funds that have been pledged since the spring, Canada will now be spending more, dollar for dollar, than Japan, France or the U.K., and isn't that far from catching Germany and Italy.

To be fair, all the G7 members are proving to be hypocrites, having collectively handed out more than $100 billion US a year to oil, gas and coal companies at home and abroad since they signed the 2015 Paris Agreement.

It is, however, hard to reconcile with the UN's "life or death warning" for more and immediate action to limit global warming.  


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Decoding U.S. politics

On tonight's political panel, the experts map out Washington's post-midterm year ahead, writes producer Tarannum Kamlani.

It's been five weeks since the U.S. midterm elections, and for anyone following politics in that country it already feels like a lifetime ago.

But the changes those midterms results are likely to trigger are only just beginning.

More people showed up to vote in these midterms than the U.S. has seen in a century, especially suburban, educated women. The result: the Republicans — party of both Lincoln and Trump — hung on to their control of the Senate.

People vote at a polling station in Long Beach, Calif., during the U.S. midterm elections on Nov. 6. (Mark Ralston/AFP/Getty Images)

On the other side of the aisle, Democrats regained control of the House of Representatives, bringing  in a new crop of passionate but untested freshman lawmakers. And with control of the House comes increased power over government finances — and to investigate President Trump.

That power and passion on the Democratic side is a potential political minefield. The United States is more divided than ever, and any sign of over-reach by House Democrats conducting investigations could exacerbate those tensions and alienate voters.

And the party has yet to define its basic message or find a presidential front-runner to carry its banner into the next election campaigns, the battle to choose a viable opponent to face Donald Trump.  

Tonight on The National, we bring back our team of U.S. political experts to help decode the state of play in Washington and map the road ahead for 2019.

Joining host Adrienne Arsenault are Republican strategist Jai Chabria, Hillary Clinton's former campaign manager Patti Solis Doyle, and David Frum, President George W. Bush's former speech writer.

It promises to be a lively discussion.

- Tarannum Kamlani

  • WATCH: The politics panel tonight on The National on CBC Television and streamed online


A few words on ... 

A Merry Christmas for Mariah Carey.


Quote of the moment

"Twenty-seven years later, The Dance remains distinctive, immediately recognizable, and inextricably linked to Ribeiro's identity, celebrity, and likeness."

- The crux of two lawsuits, filed yesterday by former Fresh Prince of Bel-Air star Alfonso Ribeiro, alleging that the makers of the video games Fortnite and NBA 2K have "unfairly profited" from selling versions of his "Carlton dance."

Alfonso Ribeiro speaks onstage during the Clio Entertainment Awards on Nov. 15 in Hollywood. (Jesse Grant/Getty for Clio Entertainment)

What The National is reading

  • Global workplace gender gap narrows, still needs 202 more years to close (CBC)
  • MIT scientists invent shrink ray (CNN)
  • Ceasefire takes effect in Yemen port of Hodeida (BBC)
  • Tragedies in Arctic hamlet spark talk of a Franklin 'curse' (CBC)
  • Belgian queen's makeup artist quizzed over Luxembourg crown jewels theft (Guardian)
  • South Sudan protests new U.S. sanctions, calls for dialogue (Africanews)
  • Depression, anxiety may take same health toll as smoking, obesity (Science Daily)
  • New York nunchucks ban ruled unconstitutional (Associated Press)

Today in history

Dec. 18, 1979: Pierre Trudeau - he's back!  

It took Pierre Trudeau a few months of reflection — canoeing in the Northwest Territories, hiking in Tibet, and all the other usual stuff people do when contemplating a career change — to come to the decision to resign as Liberal leader in late November 1979. But here, just 27 days later, he finds himself obliged to get back in the saddle and fight a February election campaign. All thanks to Prime Minister Joe Clark's confidence-losing budget.

After a short-lived retirement, Trudeau announces he's back to fight in another election in 1979. 7:38

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About the Author

Jonathon Gatehouse

Jonathon Gatehouse

Has covered news and politics at home and abroad, reporting from dozens of countries. He has also written extensively about sports, including seven Olympic Games and a best-selling book on the business of pro-hockey.