CALGARY – Liberal leadership contender Justin Trudeau is expressing support for Chinese investment in the Canadian oilpatch, but says he is still opposed to Enbridge Inc.’s proposal to ship oilsands crude to the West Coast for export to Asia.
In an opinion piece published in Postmedia newspapers Tuesday, Trudeau said China National Offshore Oil Co.’s $15.1-billion takeover of Calgary-based oil and gas producer Nexen Inc. (TSX:NXY) is “good for Canada” because the investment will help create middle-class jobs and bolster its trading relationship with China.
The presumptive front-runner in the Liberal race has been criticized by some as a celebrity candidate with no depth, yet it was his stance on the CNOOC-Nexen deal that provoked the first debate of any real substance in the leadership contest.
At the campaign headquarters of Harvey Locke, the Liberal candidate in the Nov. 26 byelection in Calgary Centre, Trudeau said Prime Minister Stephen Harper’s government has “completely failed” in courting much-needed foreign investment.
He said the government’s decisions have had more to do with polls and electoral interests than what’s best for the Canadian economy.
“Bottom line is just because you’re making a deal with the government of China doesn’t mean you have to act like the government of China,” he told reporters.
Meanwhile, both Trudeau and Locke stressed the need for Canada to diversify its energy exports outside of the United States. The International Energy Agency has predicted the U.S. will become virtually energy independent by 2035.
“That’s yet another indication that we do need to be serious about opening doors and connecting with other markets,” Trudeau said.
One of the planned major routes to Asian markets, however, is Enbridge Inc.’s (TSX:ENB) proposed Northern Gateway pipeline — a project Trudeau opposes.
If built, that line would ship 525,000 barrels of oilsands crude per day to the West Coast port of Kitimat, B.C., from which it would be sent to Asia via tanker.
“The Northern Gateway pipeline, as proposed by Enbridge, is not the right solution,” he said.
“It goes through too vulnerable a place environmentally, the necessary buy-in from the aboriginal peoples simply isn’t there and the way it’s been handled, I don’t think it’s going to be there.”
But Trudeau said there are alternatives to get Canadian oil to coastal waters. For instance, Kinder Morgan is looking to expand its Trans Mountain line, which currently delivers crude to the B.C. Lower Mainland.
“I know that corporations and oil companies are looking at different ways of doing it and I look forward to seeing more projects like that,” Trudeau said.
“I’m sure someone’s going to figure out how to do it, because it is too important for us. It is just that particular pipeline that I have real concerns about.”
Trudeau’s opining on the Nexen takeover is part of a systematic strategy aimed at disapproving all those who’ve dismissed the Montreal MP as an intellectual lightweight, said a senior Trudeau campaign source.
It’s also designed to make it harder for his rival candidates — some of whom have been positioning themselves as the voice of business Liberals — to paint Trudeau as someone with no gravitas on crucial economic matters.
“From the very beginning, he’s been pronouncing on issues of national importance and he’s going to continue to do so,” said the source.
“I think it’s becoming increasingly apparent that (the criticism of Trudeau as a lightweight) is absurd. He’s a very thoughtful guy, he’s thought this through pretty carefully and he’s going to make his voice heard on issues that matter.”
Trudeau’s support for the CNOOC takeover bid is just the latest in a string of policy positions he has taken since officially launching his campaign early last month.
The day after the launch, Trudeau flew to Calgary to declare his support for development of Alberta’s oilsands and to disavow the hated National Energy Program instituted by his father, former prime minister Pierre Trudeau.
The following day in British Columbia, he came out against Northern Gateway.
Since then, he’s weighed in on the hot button issue of Quebec language laws, dismissing the need for tougher legislation. He’s also come out strongly in favour of the decriminalization of marijuana and spoken favourably, though not quite unequivocally, about outright legalization.
However, it’s Trudeau’s position on the Nexen takeover that has sparked the first signs of real disagreement among the multitude of leadership contenders.
His main challenger thus far, former MP Martha Hall Findlay, said she supports CNOOC’s bid in principle, although she wants clearer rules for foreign investors.
“Canada needs to be clear that it is open for business but not for sale,” she said.
Vancouver MP Joyce Murray, who is poised to join the race next week, said she believes it’s “a bit premature” to stake out a position on the deal because the government has not yet spelled out the conditions or rules that will be applied.
Before deciding whether to support the deal, Murray said Canadians need to know if there will be limits on the amount of foreign ownership of the oilpatch and how much control Canada will have over value-added jobs.
Ottawa lawyer David Bertschi took a hard line against the deal on the grounds that there are “far too many unanswered questions” about it.
“Experts have expressed concerns about the potential national security implications associated with the takeover and, without further due diligence, it is my opinion that the proposed CNOOC takeover of Nexen … should not be allowed to proceed,” he said in a statement.
Industry Minister Christian Paradis is in the midst of deciding whether the deal would be of net benefit to Canada. The review period, which has been extended twice so far, is to end on Dec. 10, though it can be extended again with CNOOC’s consent.
The Conservative government has said it will clarify its foreign investment guidelines shortly.
There were reports Tuesday that Ottawa was looking to impose investment and employment conditions on CNOOC. Unidentified sources told The Globe and Mail CNOOC was worried the caveats would affect Nexen’s bottom line, while Bloomberg, also citing unidentified sources, said CNOOC had agreed to Ottawa’s conditions.
Tuesday, November 20, 2012