Fitch Downgrades Canada's Credit Rating

Fitch Ratings, one of the big three global credit rating agencies, has announced it's downgrading Canada's credit rating from AAA to AA+. This is due to the tremendous debt -- roughly a quarter of a trillion dollars -- the Canadian government took on to prop up the economy during the COVID-19 lockdowns.

Though the Trudeau government was quick to argue that Canada's economy remains strong and that the country in an ideal position to turn things around, this does have the potential to significantly increase the cost of government borrowing and of doing business. That danger, moreover, will be amplified if, as some think, there are further downgrades to come:

David Rosenberg... has been predicting a downgrade on Canada’s sovereign debt since late April and thinks this won’t be the last. “The real question is: What took so long?’ .... Canada’s excessively leveraged national balance sheet has looked a lot like China, Italy and Greece for quite a while.” While Ottawa may appear to be in “solid” financial shape to some, this has “masked bloated debt ratios” in households, business sectors, and most of the provinces, he said. “This won’t be the last ratings cut, I can assure you,” said Rosenberg.

Now, it is true that governments worldwide have responded to the pandemic by racking up what would normally be unthinkable amounts of debt. Consequently, it is likely that Canada won't be the only country to have its rating downgraded.

But one thing that makes Canada unique is the shame that its governing elite feels about one of the pillars of its economy. As Dan McTeague of Canadians for Affordable Energy said the other day in an excellent piece on Erin O'Toole's environmentalist pitch in the CPC leadership contest,

Rather than championing Canada's hydrocarbon industry and creating economic growth with our country’s wealth of natural resources, O’Toole’s policies seem most focused on maintaining the what-seems-to-be-required, green-is-god image of so many politicians.... Our natural resources are an asset to this country, not a liability. They keep energy affordable, and give us one of the highest standards of living. O’Toole and other political candidates seem determined to remain blind to that fact.

You would hope that this turn of events would cause Canada's governing class to thank its lucky stars for the energy sector, a potential launchpad for recovery. But unfortunately they'll probably keep just hoping for pats on the head from similarly green-obsessed organizations like the UN  -- and how's that been working out for them?

Eventually someone is going to have to grow up and start taking things seriously.

Erin O'Toole, Environmentalist

Back in March I drew your attention to an article by Canadian Tory insider Ken Boessenkool which argued, in the wake of an election which saw the Conservative Party of Canada (CPC) pick up 26 seats, that the party needed to go all in on environmentalism.

Vote for us, the Conservatives said, and we’ll cut your taxes.

Vote for us, the Liberals said, and we will address climate change.

This worked wonders across western Canada, in rural Ontario, around Quebec City, and in a smattering of ridings in Atlantic Canada. But new polling for Clean Prosperity conducted by Conservative pollster Andrew Enns from Leger suggests climate change was a key reason why the Conservatives failed to gain ground in the 905.

I pointed out at the time that this was specious reasoning, since the Conservatives are less likely than ever to win in the Greater Toronto area  because of the collapse of the New Democratic Party as a viable electoral (and vote-splitting) force, not to mention the fact that the polling he cited was done by the carbon-tax activist group Canadians for Clean Prosperity. It isn't that surprising that their conclusion was Canadians Love Carbon Taxes!

Shockingly, Erin O'Toole, purported co-front runner in the CPC Leadership race, seems not to have read my post. (He must have skipped his press clippings that morning). That is, he sounds like he's going all in on the Boessenkool theory. At last week's leadership debate, his opponents hammered O'Toole's plan to introduce a "national industrial regulatory and pricing regime" as being a carbon tax-like scheme that would harm consumers and the oil and gas industry alike.

O'Toole [replied that] the party needs a serious environmental platform for the next election. "I'm the only one who has a detailed plan. It's disappointing to see Mr. MacKay attack that. If we're not clear on the environment in the next election ... we're not going to be able to get pipelines built," O'Toole said.

It's a surprising tack for True Blue O'Toole to take. His whole campaign is built upon contrasting himself with the Mr. Progressive Conservative, Peter MacKay, but here he is going all in on alienating the west.  Maybe he figures he can get away with it because they have no where else to go -- what are they going to do, vote Liberal?

But O'Toole is counting his chickens before they're hatched. He isn't leader yet, and western Canadian party members can still give that title to someone else, perhaps Derek Sloan or Leslyn Lewis.

Hopefully they do something to make it clear to O'Toole or MacKay or whoever wins that the party's base can't be ignored.

Alberta's Petrochemicals Protecting Canada

The collapse in oil prices combined with the virus and the lockdowns are hitting the Canadian province of Alberta extremely hard. Some are even predicting the worst economic contraction in its history. But I was glad to read in the Financial Post about one bright spot in the province's economy at the moment, its petrochemical sector which produces a variety of plastic products that are in high demand at the moment:

In 2019, Prime Minister Justin Trudeau said the government would move to ban single-use plastics such as shopping bags, cutlery and straws to curb the proliferation of plastic waste in landfills and oceans. Now, in the middle of a public health crisis, the demand for plastic packaging has exploded. In Alberta’s oilpatch, ethane crackers used to make polyethylene film are among the only facilities that are busier today than before the pandemic knocked out global oil demand and led to hundreds of thousands of barrels of oil being shut in.

“The demand for plastic packaging has never been higher than it is right now,” said Bob Masterson, president and CEO of the Chemistry Industry Association of Canada, noting that the evidence of the huge demand for the industry’s products is plain at any grocery store in the country. Some grocery stores that had previously banned or started charging for plastic bags have eased those policies as workers are concerned about handling re-usable grocery bags. Acrylic plastic shields have been installed at tills to separate cashiers from shoppers, both of whom are wearing plastic gloves and masks in increasing numbers.... Masterson said the current crisis has led to “an absolute boom in the demand for packaging,” as grocery stores and consumers are wrapping food in plastic to prevent surface contamination of foods from the coronavirus.

Plastics, of course, aren't the only timely products produced by petrochemicals. Another is isopropyl alcohol:

I think it has shown some vulnerabilities in Canada’s supply chain,” Masterson said, noting that Shell Canada Ltd.’s Sarnia plant is the only producer of isopropyl alcohol in Canada, used to make alcohol-based cleaning products such as hand sanitizers. Shell president and CEO Michael Crothers said in a March 31 release the company would donate 125,000 litres of isopropyl alcohol, which is “approximately enough to create nearly one million 12-oz bottles of hand sanitizer for use in hospitals and medical facilities....

In Alberta, successive governments have implemented incentives designed to attract more petrochemical investment in an effort to diversify the province’s economy and build out the supply chain for hydrocarbon production. An incentive program introduced by former NDP premier Rachel Notley resulted in both Inter Pipeline Corp. and Pembina Pipeline Corp. spending $8.5 billion combined on under-construction polypropylene facilities, which will turn the province’s abundance of propane into plastic pellets used in a range of consumer goods.

The article notes that there is some question as to whether the industry will continue to boom once the pandemic and the lockdowns are over, and that is a real concern should the Greens return to form. The environmentalists are working hard to keep the "climate emergency" front and center, and even to link the two. But from where I sit, this pandemic definitively demonstrates the necessity of this industry, and the people talking about managing its decline are nuts.

Trudeau's Oil Sands 'Relief' a Bust

Back in 2017, Justin Trudeau was speaking at a town hall event in Peterborough, Ont., and was asked about his government's decision to approve an extension to Kinder Morgan’s Trans Mountain pipeline, which seemed in tension with his environmentalist commitments. He replied:

We can’t shut down the oil sands tomorrow. We need to phase them out. We need to manage the transition off of our dependence on fossil fuels but it’s going to take time and in the meantime we have to manage that transition.

This was widely considered to be a gaffe of the Kinsley variety, which is to say the type in which a politician "accidentally reveals something truthful about what is going on in his or her head." Trudeau was acknowledging that somewhere in that woolly brain of his is the desire to shut down Canada's oil sands, the backbone of Canada's western economy, and a key sector of the national economy as well.

The representatives of affected Canadians were compelled to respond. Rachel Notley, whose socialist New Democratic Party was enjoying a rare period in power in Alberta, said, “[Our] oil and gas industry and the people who work in it are the best in the world and we’re not going anywhere, any time soon.” Jason Kenney, who would replace Notley as premier two years later, asked whether Trudeau's "phase-out" meant "he wants to hand-over all global oil production to Saudi [Arabia], Iran, Qatar, et al?" Then-opposition leader Brian Jean replied, "If Mr. Trudeau wants to shut down Alberta's oil sands... he'll have to go through me and four million Albertans first." The pushback was such that eventually -- that is, more than a week later -- Trudeau walked back the comment, saying that he "misspoke," and that he had “said something the way I shouldn’t have said it.”

Fast forward to our present calamity, which has seen Canada's oil and gas industry pounded by a perfect storm consisting of the COVID-19 pandemic and its attendant lockdowns on the one hand, and the Saudi/Russian production war on the other. Back in the middle of March, as the nature of these twin crises was becoming clear, news began to surface about Ottawa's proposed response.

The federal government is preparing a multibillion-dollar bailout package for Canada’s oil and gas sector that is expected to be unveiled early next week, sources say.... [G]overnment insiders are saying little about the details... but the oil and gas sector can expect to get more access to credit, especially for struggling small and medium-sized operations, and significant funding to create jobs for laid-off workers to clean up abandoned oil and gas wells.

One senior Alberta source said the province is expecting Ottawa to provide $15-billion in relief to an industry that has been hammered by the COVID-19 crisis and the price war between Saudi Arabia and Russia that has cratered oil prices and energy-company stocks.

Finance Minister Bill Morneau assured the nation on March 25th that the government understood that "the energy sector is in a particularly challenging situation," and that the rumored bailout was imminent, not "weeks [but] hours, potentially days" away.

Well, not hours or days, but nearly a month later details of the relief package were made public, and they were underwhelming to say the least. Reports of a $15 billion package were off by almost an order of magnitude, as the actual package came to $1.7 billion, largely geared towards environmentalist priorities. Whereas oil and gas representatives had been asking mainly for new lines of credit and an easing of regulations, the actual package earmarked the vast majority of dollars for the remediation of abandoned oil wells and methane-gas emission reduction.

As Grant Fagerheim of Whitecap Resources put it, “This is not going to do anything... If this is as good as it gets, it will do very little or nothing to assist with operations for companies.”

What changed? Well, for one thing, the environmentalists got involved. Around the time of Morneau's pledge, a coalition of environmentalist groups wrote an open letter to Trudeau arguing against such a package, saying

"Giving billions of dollars to failing oil and gas companies will not help workers and only prolongs our reliance on fossil fuels."

They seem to have had an influence. As one oil executive observed to the National Post:

[T]he announcement appeared to adhere closely to Ottawa’s tendencies around environmental messaging, rather than addressing immediate concerns on private sector balance sheets. “I think they made the calculation that it would be politically unpalatable in Ontario and Quebec to provide direct supports to oil and gas."

Of course, Canada's environmentalist groups were elated and were quick to offer praise:

Josha McNabb of the clean-energy think tank Pembina Institute said well cleanups and methane reductions are good steps toward reorienting Canada’s economy toward a low-carbon future. “Those are types of things that are going to lead to an oil and gas sector that is more competitive because it’s cleaner, and also (develop) the kind of expertise that is going to be in demand,” she said.

Even more to the point was the statement put out by Tzeporah Berman of Stand.Earth, which read,

Today, Prime Minister Trudeau made clear that Canada’s bailout package will prioritize addressing the climate crisis and building the cleaner, safer economy we need. This is the kind of leadership the world needs .… This bailout announcement is a major turning point for oil and gas politics in Canada.... [W]inding down the oil and gas industry [is] a hard, but necessary part of achieving [Canada's Paris Agreement climate] targets.

Of course, Trudeau's cabinet is itself brimming with borderline enviro-activists, including Catherine McKenna, Navdeep Bains, and Steven Guilbeault (the latter a full blown activist, who spent ten years with Greenpeace before running for office). None of them needs much pressure -- public or private -- to leave the resource sector out in the cold. No doubt when Morneau said that relief was "hours, possibly days" away, that was based on his perception of the negotiations as they stood at the time. Perhaps he was even trying to hurry his fellow ministers along. But he appears to have gotten ahead of his skis, and in the end the greenies won out.

Furthermore, despite requests from industry representatives, the Trudeau government insisted on going ahead with its plan to double the Federal Carbon tax and merely delayed the implementation of their Clean Fuel Standard by a few months.

“Just because we are in one crisis doesn’t mean we can forget about the other crisis, the climate crisis, that we’re facing as a world and as a country,” said Trudeau.

It must be mentioned that one request from the resource industry was included in the relief package, namely expanding credit availability for small and medium sized energy companies, and there has been talk of further assistance aimed at ensuring that the industry maintains liquidity. There's a good argument for such interventions -- since government ordered lockdowns are a major contributor to the industry's plight, it makes sense that the government would help shoulder the burden while oil and gas companies work their way through this. And it's worth noting that, as the energy sector has contributed more to the Canadian economy over the past 20 years than any other, a lot of that money comes from oil and gas to begin with.

Even so, the core of this package makes plain the Prime Minister's priorities. Weighted as heavily as it is toward capping off old wells, it serves mainly as an instruction to an ailing industry that it had better restructure itself with an eye towards closing up shop for good. Rahm Emmanuel famously advised Barack Obama in 2008 to never let a good crisis go to waste, and Trudeau and his ministers appear to have taken that to heart. Never mind that the resource sector makes up roughly 10 percent of the Canadian economy; that, as this pandemic has reminded us, it contributes the material to make personal protective equipment and ventilators; or that the Green Energy Industry on which they have pinned their hopes has been shown to be a sham. This is their moment. They will not let it pass.

Tory Insider to Western Canada: Drop Dead

Hey, here's a ridiculous article, by Tory insider Ken Boessenkool, writing for the parish newsletter of Canada's bi-partisan elite, Maclean's:

If Conservatives want to win another national government they are going to have to find ways to win critical seats in the suburban belt around Toronto⁠—the 905, encompassing cities like Ajax, Brampton and Burlington. Harper swept the 905 for his majority in 2011 and the party has been on the outs ever since.

Can Conservatives win again in the 905? They cannot count on an assist from the NDP whose vote has dropped from 25 per cent in 2011 to around 10 per cent in each subsequent election. To win, Conservatives will have to increase their vote by attracting new cohorts of voters. In the last election, Conservatives centred their campaign around cutting taxes (eliminating the carbon tax), while the Liberals centred their campaign around climate change and cutting greenhouse gasses (sticking with their recently introduced carbon tax)....

Vote for us, the Conservatives said, and we’ll cut your taxes.

Vote for us, the Liberals said, and we will address climate change.

This worked wonders across western Canada, in rural Ontario, around Quebec City, and in a smattering of ridings in Atlantic Canada. But new polling for Clean Prosperity conducted by Conservative pollster Andrew Enns from Leger suggests climate change was a key reason why the Conservatives failed to gain ground in the 905.

So, in order to win back the Toronto suburbs, which Boessenkool readily admits the Conservatives won in 2011 because the socialist NDP split the vote with the Liberals (something they have failed to do since the death of their charismatic leader Jack Layton), the Tories will have to betray their voters out west (remember how they won 47 of the 48 seats between Saskatchewan and Alberta?).

This seems like questionable advice. A bird in the hand is worth two in the bush, goes the proverb, but Mr. Boessenkool begs to differ, based on some polling done by the carbon tax activist group Canadians for Clean Prosperity, which found that, 1) Canadians *love* the Carbon Tax, and 2) the only thing keeping them from voting Conservative is that party's support for Canadian oil and gas.

Amazing! That's exactly what the CBC have been saying all along! Canada is the one place in the world right now where there's no divide between elite and popular opinion! Who knew that Rosemary Barton had such a finger on the pulse of the persuadable voter?

This, in all seriousness, is garbage. The Tories have a lot of serious work to do if they want to build a winning coalition in the near future. Too much to go into in a blog post. But the idea that the secret to Tory domination is to join every other party in spitting on western Canada, which just made them the largest single party in the country, is insane. Mr. Boessenkool and Canadians for Clean Prosperity might find it appealing to try and save the Conservatives from their own voters, but that isn't going to win them any elections.

Luckily for western Canadians, Alberta premier Jason Kenney has thus far flouted elite opinion (including that of his deputy minister of Policy Coordination, Mark Cameron, formerly head of, er, Canadians for Clean Prosperity) and continued the fight against Trudeau's carbon tax. This past Monday saw him strike a major blow in that fight, when the Alberta Court of Appeal, in a 4-1 decision, found against the Federal Government and declared the carbon tax unconstitutional.

In the 269-page decision, Justices Catherine Fraser, Jack Watson and Elizabeth Hughes said, in part: "The division of powers remains key to our federal state. It is part of the fabric of Canada itself. The federal and provincial governments are co-equals, each level of government being supreme within its sphere. The federal government is not the parent; and the provincial governments are not its children." They go on to call the act "a constitutional Trojan horse," as it would set a precedent, allowing the federal government to impose almost any law it wished on Canadians.

The Appeals Courts of Ontario and Saskatchewan have previously sided with the Trudeau government's argument that the carbon tax isn't a tax at all, and falls within the federal government's regulatory authority.

So -- onward to the Supreme Court and good luck to Alberta!

Green Protesters Bring Canada to a Halt, Local First Nations Groups Hardest Hit

For nearly two weeks now, environmental activists across Canada have been blockading roads and railway lines all over the country. CN rail, Canada's largest freight railway company, have announced that they are shutting down their Eastern operations, leading to a serious risk of goods shortages in Eastern Canada and to 450 workers being laid off. Passenger train crown corporation VIA Rail followed suit, cancelling their passenger services across the country, inconveniencing nearly 100,000 people over the holiday weekend.

What is it that has these activists so up in arms that they are are willing to cause so much disruption throughout Canada? Nearly all of the press reports I've read offer an easy answer:

Here's one from the National Post:

[CN]'s operations have been held up since last week by protests near Belleville, Ont., and New Hazelton, B.C., done in solidarity with B.C. Indigenous leaders who oppose the Coastal GasLink natural gas pipeline through their territory.

And another from the Toronto Star:

Protests in solidarity with the hereditary chiefs of the Wet’suwet’en First Nation have sprung up across the country as demonstrators show support for Indigenous leaders in northern B.C. who oppose construction of the already-approved Coastal GasLink pipeline. While all 20 elected First Nations band councils from the region have signed benefit-sharing deals connected with the project, hereditary chiefs of the Wet’suwet’en have claimed the pipeline can’t proceed through unceded traditional territory without their consent.

And another from the Montreal Gazette:

Blockade organizers across Canada have said they’re acting in solidarity with those opposed to the Coastal GasLink pipeline project that crosses the traditional territory of the Wet’suwet’en First Nation near Houston, B.C.

If you are a casual reader of the news,  you might think that that's all pretty straightforward. The Coastal GasLink pipeline, which has been approved by the Liberal Government in Ottawa and the socialist NDP government in British Columbia (where it is being built), has run roughshod over the wishes of the local native population, and people of good will across Canada are standing up for them.

Except, that that is not at all what is happening, as Mike Smyth explains for B. C.'s The Province:

The First Nations directly impacted by the Coastal GasLink pipeline — and the thousands of Indigenous people they represent — largely support the project. All 20 First Nations along the pipeline route have signed benefit-sharing agreements with the pipeline company through their elected band councils. That includes the multiple elected councils of the Wet’suwet’en First Nation.

But the protesters have aligned themselves with five Wet’suwet’en hereditary chiefs opposed to the pipeline, and not the 13,000 Indigenous British Columbians represented by all the band councils that support it.

He goes on to sharpen the point a bit:

It’s an especially inconvenient fact for pipeline protesters who say they are blocking roads, bridges, highways, train tracks and public buildings in solidarity with Indigenous people.

They sure aren’t representing the Indigenous people working on the pipeline. Of the 1,000 people currently employed by the project, about one-third are estimated to be First Nations. If the blockaders get their way, they would throw hundreds of Indigenous people out of work. That’s some “solidarity.”

Stewart Muir of Resource Works, an independent organization which reports on issues involving British Columbia's resource sector, has been on the ground in B. C. talking to locals, especially members of indigenous groups actually effected by the pipeline and these protests. Muir's interviews with these people - which are being posted on Twitter and Facebook - are invaluable for understanding what is really going on there.

One person who Muir spoke to is Troy Young, a member of the Hagwilget Village First Nation, part of the Wet’suwet’en Nation, who manages an Indigenous-owned company working on the Coastal GasLink pipeline. Young is clearly bothered by protesters across Canada interfering with a Native issue:

It would be appreciated and respectful to our culture if people would leave us to our own devices. The traditional way of doing things is to meet in our feast hall, have our discussions, and then make an internal decision, and let people know.

He goes on to voice his frustration with the five dissenting chiefs, who are "choosing to do everything via media and not following proper protocol."

Young also points out that the protesters are ignoring the benefits the pipeline will bring to First Nations communities:

Against everything they're saying, the protesters, typically if people are employed, drug use goes down, because people are happy when they're making money, they feel better about themselves. They feel more confident.

He's particularly concerned about what the success of the protesters would mean for First Nations employment opportunities: "If the project were to be halted, the loss would be probably insurmountable. Nobody's ever going to invest here again."

A similar sentiment comes from Clement Mitchell, an elected councilor from Witset First Nation, the largest Wet’suwet’en group.

"There's a lot of people out there that don't even belong from Witset, and they're kind of ruining our names... making us look bad.... If they're not from Witset, if they're not natives from our village, they shouldn't even be involved in what's going on."

And from Phillip Tait, a resource worker also working on the pipeline:

"I'm just a regular guy, I want to work. This project is going to have, what, 10,000 employees. Now if we interrupt one little part of it, its going to disrupt the whole line. And... 10,000 people is a lot of families and businesses that are going to be effected."

All of which is to say that once you're on the ground it becomes pretty clear that, contra the standard media narrative, the protesters don't speak for the Wet’suwet’en.

So who are they, and what, exactly, do they want? Is it really possible that many thousands of protesters have gathered in cities and blockaded train lines across a nation as large as Canada without coordination or serious funding? It isn't difficult to find allegations online that many of these protesters are being paid, perhaps by American environmentalist groups who feel that they get more bang for their buck in Canada than they do in the US.

These questions warrant further investigation. Even so, the protesters remain a familiar type with familiar motivations. As Rex Murphy put it, they are "the anti-industry, anti-energy, anti-Alberta, climate-change save-the-worlders who have been harassing the country for years."

Val Litwin, president and CEO of the BC Chamber of Commerce, adds

What is the ultimate goal of the non-Indigenous groups involved in #ShutDownCanada? They make no attempt to hide their desire to keep resources in the ground and development from happening. But at whose expense? In so doing, they are hurting the very people they purport to represent — the thousands of working men and women (both Indigenous and non-Indigenous) who rely on development to put food on the table, who want to feel safe and secure in their ability to provide for their families, and who want to see their communities move collectively toward a more prosperous future.

As protesters have been blockading roads and railway lines across Canada, Prime Minister Justin Trudeau has been traveling across Europe and Africa campaigning for Canada to be given a seat on the UN Security Council. With criticism mounting - Opposition Leader Andrew Scheer issued a statement saying that the government's non-response had emboldened "radical activists" with "no connection to the Wet’suwet’en people" - Trudeau announced that he would be cancelling his planned trip to Barbados and coming home for emergency meetings on the situation. Though, after Scheer mocked the P. M.'s call for "dialogue" as "the “weakest response to a national crisis in Canadian history,” Trudeau announced that Scheer would be excluded from those meetings, saying "Mr. Scheer disqualified himself from constructive discussions with his unacceptable speech earlier today," a childish response, which likely betrays how seriously he takes this situation.

The inconvenient fact for Trudeau, however, is that Scheer is exactly right, and ordinary Canadians are taking this extremely seriously. Despite the Canadian media (with a very few exceptions) acting as unofficial P.R. reps for the protesters, a new poll shows that nearly two-thirds of the country oppose them. They are beginning to see what has been clear from quite early on, which is that the protesters - whoever they are and wherever they come from - are using Canadian First Nation groups as a shield for their own Environmentalist ideology. Despite their claim to be acting in solidarity with the disenfranchised, they have little regard for the regular people of all races effected by their barricades. All of their appeals to white guilt and anti-colonialism are a thin veneer to mask their frenzied desire to end all pipelines.

Jason Kenney's Future -- and Alberta's

Alberta Premier Jason Kenney is an ambitious man. Not that that should surprise anyone -- he is a very successful politician, and you don't get as far up what Benjamin Disraeli famously called "the greasy pole" as he has without quite a lot of gumption. But the question we must ask about any politician is whether his personal ambition is leading him to stray from the good of his constituents. I find myself wondering whether this is the case with Kenney.

I say this after hearing his comments delivered at the Wilson Center in Washington, D.C. last Friday concerning the necessity of a "gradual shift from hydrocarbon-based energy to other forms of energy” in Canada and throughout the world. He continued,

“It is preferable that the last barrel [of oil] in that transition period comes from a stable, reliable liberal democracy with among the highest environmental, human-rights, and labor standards on earth.”

This is a major rhetorical shift for Kenney, who has spent the past several years cultivating his brand as Mr. Alberta, the great defender of Canada's oil sands and the jobs they provide. To hear the Premier of Alberta -- the Texas of Canada -- sketching out an obituary for oil and natural gas ("It died surrounded by people with exceptional labor standards") is nothing short of amazing.

Was it a mistake? Will this be walked back, the way that Kenney's fellow former Tory cabinet minister Peter MacKay's statement in October that social conservatism “hung around [then-Tory Leader] Andrew Scheer’s neck like a stinking albatross" eventually was? (Interestingly, those remarks were also delivered at the Wilson Center in D.C. What is it about Canadian politicians saying things in the States that they wouldn't say in Canada?)

As you likely know, Kenney parlayed his nearly two decades as a high profile Federal MP and Cabinet Minister in Ottawa into the leadership of the Progressive Conservative Party back in Alberta. He ran on a platform of merging the party with the rather-more-conservative Wildrose Party, in the hope that the two would stop splitting the vote and return right-of-center governance to Alberta after its brief dalliance with Rachel Notley's socialist NDP. And that's exactly what happened -- the two parties merged, the NDP was kicked to the curb, and Kenney was hailed as a liberator.

Since then he has, by and large, been an able spokesman for Alberta and Western Canada generally, fighting against the implementation of the Trudeau government's carbon tax in court, opening a public inquiry into the campaigns against Albertan oil and gas, and fighting for the construction of pipelines to get Canadian crude oil to refineries or to tankers for export.

All of which makes the Premier's words in Washington that much more puzzling. Why would Jason Kenney, the great defender of Alberta against the domineering Liberal government in Ottawa, suggest that an industry which is universally associated with Alberta is not long for this world? There are, it seems to me, a few possibilities.

First, it's possible that Kenney is conceding an argument for the sake of a short-term gain. The gain would likely be the Teck Frontier oilsands mine, or some other project which Kenney feels to be important. As Don Braid put it in the Calgary Herald on Monday:

It is almost impossible to imagine those [undecided] Liberal ministers approving Teck without some assurance that, over time, UCP Alberta is comfortable with transition, even in Kenney’s long-term scenario.

The argument being conceded, however, is the Liberal's, namely that Canadian oil and gas needs to be phased out within a few years. In fact, back in 2017 Justin Trudeau took some heat (including from Western Liberals and NDPers) when he said

We can’t shut down the oilsands tomorrow. We need to phase them out. We need to manage the transition off of our dependence on fossil fuels but it’s going to take time and in the meantime we have to manage that transition.

Then-Premier Rachel Notley (still holding out hope that she could be reelected) shot back,“Alberta’s oil and gas industry and the people who work in it are the best in the world and we’re not going anywhere, any time soon.” And Kenney himself got in on the act, asking whether Trudeau's "phase-out" meant "he wants to hand-over all global oil production to Saudi [Arabia], Iran, Qatar, et al?" He added "If we end 'dependence on fossil fuels' how will Justin Trudeau fly to private Caribbean islands? Planes & helicopters fueled by pixie dust?"

Strange that present-day Jason Kenney sounds so much like Justin Trudeau.

In any event, conceding this argument to get Teck approved would be a serious miscalculation. To do so would be to undermine an entire industry for the sake of one part of that industry. It would be entirely nonsensical.

The next possibility is that he has really come to believe that Canada needs to transition away from its oil and gas industry. There was some real consternation shortly after Kenney took office over his decision to appoint Mark Cameron, formerly head of the carbon tax activist group Canadians for Clean Prosperity, as Deputy Minister of the Policy Coordination Office. Is it possible that Cameron, or someone else who has Kenney's ear, has convinced him that the most conservative thing he could do would be to manage the decline of the existing energy industry?

One final possibility is that this rhetorical shift isn't about Alberta or Albertans at all. The federal Tory Party has recently lost an election, despite the various scandals rocking Justin Trudeau and his party. The Tories actually gained seats and won a greater percentage of votes, but this only solidified their dominance in Western Canada. In Ontario, Quebec, and the Maritimes they barely moved the needle.

All of which has precipitated a massive debate within the party about how to win over the rest of Canada. And as usually happens when conservative parties lose, the growing consensus among the consultant class is that if they want to win, they must simply embrace liberalism.

Now, while he's staying involved, trying out the role of kingmaker, Kenney is unlikely to jump into the ongoing Tory leadership race. He hasn't even been Premier of Alberta for a year, so he can't very well head to Ottawa now. But it is likely that Kenney is calculating that adopting a slightly modified version of the Green movement's messaging will sound reasonable to voters in Ontario and perhaps help shape their view of him, laying a foundation for his ascent to the top of that greasy poll in a few years time. Maybe he figures that he, Mr. Alberta, has locked down the support of Western Canada, and now he is looking eastward. And once the opportunity presents itself, he can save the Tory Party just as he has saved Alberta.

Except, one wonders, if he trades the oil and gas industry for theoretical support in Ontario somewhere down the line, will he really still have Alberta locked up? This seems by no means certain. It seems more likely that the men and women of Alberta who depend on oil and gas for their livelihoods, when they hear his pitch, 'Kenney the hero who took down the NDP, Kenney the fighter,' will remember more than anything else the moment when he surrendered.