The NDP discovers the oil sands

The New Democrats hate the oil patch, right? They have a funny way of showing it.

The NDP discovers the oil sands

Todd Korol/Reuters

Thomas Mulcair is the leader of an NDP that is relentlessly defined by its critics as anti-oil. After all, not even a year has passed since Mulcair was lambasted for blaming the oil sands for inflicting “Dutch disease” on Canada by artificially inflating the loonie and harming the manufacturing sector. And at one point, NDP policy called for an all-out ban on new “tar sands” development. But when the NDP leader stepped up to a podium in Calgary’s Palliser hotel last month, before a chamber of commerce audience filled with oil executives, he had a very different message to deliver—the NDP, he declared, would be “a partner for the development of Canada’s energy resources.” While the controversial Northern Gateway pipeline to the West Coast was a “non-starter,” Mulcair said, he called his party “fierce advocates for economic development, as long as it’s sustainable development.”

News of Mulcair’s overtures to the oil patch didn’t exactly make headlines, but his talk was the latest salvo in a quiet, gradual shift in the NDP’s thinking about oil. NDP MPs have been visiting Alberta frequently—someone from the party is in Calgary or Fort McMurray once every couple of weeks, according to MP Peter Julian, the NDP’s energy and natural resources critic. In Ottawa, lobbyist registry records show Julian and Mulcair, along with environment critic Megan Leslie, have met regularly in recent months with representatives and lobbyists from Suncor, Enbridge, Encana and TransCanada.

At meetings of the House of Commons’ natural resources committee in January, Julian openly praised Suncor for embracing the kind of “value-added” development the NDP wants the rest of the industry to emulate. “Instead of shipping raw bitumen out of Canada and basically profiting American refineries, what [Suncor] has done is put in place the infrastructure, the upgraders and the refineries to ensure that the product that comes from Canada has maximum value added,” says Julian, who once worked as a labourer in a Burnaby, B.C., refinery.

Roland Lefort represents Suncor’s unionized workers in the oil sands. Lefort, a Cape Bretoner who has worked in Alberta since 1983, tagged along for the ride when Mulcair toured Suncor’s facilities last spring after it came to light that he’d never before visited the oil sands. “It’s evident that Suncor is a leader here in Fort McMurray,” says Lefort, pointing to efforts to remove sulfur dioxide from its emissions and draw less water from the Athabasca River.

Those measures are certainly appealing to the NDP, which in recent months has argued Canadian oil producers should refine more oil in Canada, export the finished product, and create thousands of jobs in the process. In that way Julian says the party’s position on development is fundamentally the same as in the past. “I wouldn’t say our thinking has changed. I think our thinking has deepened,” he said. “It’s front and centre in our preoccupations.”

But Lefort disagrees. He says the NDP’s shift is quite recent, and he believes his union’s proposal of a “third way” approach to development—not halting expansion, but not expanding at all costs—has caught the party’s attention. “Since the last election, we’ve seen a little bit of a different stance,” he said. “It’s the fact that it’s the biggest economic driver in the country right now. You can’t ignore that fact.”

And therein lies the tightrope Mulcair finds himself on. Sidle up too closely to the oil sands, and the NDP risks alienating environmentalists; fail to show support for the energy sector, and the NDP’s political enemies won’t let them forget it. David Anderson, the parliamentary secretary to the minister of natural resources, recently bellowed to the House that New Democrats “continue to oppose all job-creating resource developments.”

On the oil sands issue, the NDP also faces a conundrum in Quebec, where close to 60 per cent of its caucus have their ridings. In recent months Quebec Premier Pauline Marois has signalled she is receptive to a plan to pipe oil sands crude from Alberta to the East. But if talks around an eastern pipeline spark heavy environmental opposition in that province, Mulcair will be under pressure to pick sides between environmentalists and the oil industry.

Politics aside, the economic reality is that Alberta crude is a significant job creator that any federal NDP government would need to pay for its spending platform—a fact not lost on the industry itself. “If you’re going to have this broad social agenda, you need a robust economy to support it,” says Travis Davies, a spokesman for the Canadian Association of Petroleum Producers. “Obviously, oil and gas and the oil sands are an important part of that,” he says, adding that the region’s unions, including Lefort’s outfit at Suncor, understand that reality. With 72 per cent of Canadians telling a Leger poll last October they support oil sands development, the NDP may simply have no choice but to refine its attitude toward the oil sands. “What has happened over the last number of months is a gaining of traction of the whole narrative on how important the energy sector is to the Canadian economy,” says Todd Nogier, an Enbridge spokesman. “I wonder if [the NDP’s position] has more to do with this overarching narrative.”


The NDP discovers the oil sands

  1. “Politics aside, the economic reality is that Alberta crude is a significant job creator”

    Yeah, that’s why the price of oil slumped a little and Alberta’s deficit tripled. In the mid-1980s Alberta’s economy crashed when the price of oil dropped below $20/barrel. This time around, it only has to drop below $80/barrel to create the same crisis — and because of Harper Alberta will drag the entire country down with them.

    There is no future in dirty energy. Bad environmental policy is bad economic policy. Resource booms are followed by resource busts.

    • You don’t have the faintest idea what you are talking about. The mid 80’s also featured a construction boom in Ontario where friends were telling me that workers wages were being bid up by other firms poaching work sites. Ontario a boom and bust economy?

      Since then there has been steady growth, and a young man or woman showing up in Alberta can get a job, a good job with pay that is very good. The current problem is one of government spending rather than a dramatic slowdown. The worst bump was 2008 where the financial crisis caused problems in a capital intensive industry.

      Since the late 80’s the ups and downs that the rest of the country has experiences have been far more dramatic than anything Alberta has experienced.

      • That’s a good one. Instead of blaming the NEP for Alberta’s crash in the mid-1980s, just pretend it didn’t happen. And pretend that oil can never drop below $80/barrel which would make most bitumen sands oil unprofitable, shutting down production. Also pretend that resource revenues are not volatile; and pretend it’s easy to slash spending on health care and education so the province can continue to freeload off of resource welfare checks indefinitely…

        • Good heavens man. The 80’s was 30 years ago. Ontario has had more boom and bust cycles in that time than Alberta has. If I want to find abandoned wastelands I go to Ontario auto manufacturing towns.

          Oh that all Canadian provinces be cursed with the employment and fiscal situation that Alberta suffers under.

  2. Alison Redford, Brad Wall and any number of Fed gov’t officials are now using the talking point “environmentally sustainable” development when describing the oil sands south of the border when promoting Keystone XL. Which is where the decisions will be made on pace and nature of oilsands development.

    Hill and Knowlton or whatever pr outfit that is co-ordinating the pitch has obviously noted that the NDP’s previous use of the same terms had registered with the public in Canada. Talk is cheap. Action isn’t

    • This a well planned ‘smoke screen’ put on by the NDP to enchance their party because
      Megan Leslie for the NDP went to the States to have the oilsands stop; Elizabeth May also went to USA to see to it that the Keystone XLP does not take place; Nathan Cullen for the NDP also said that he wants the ‘oilsands shut down.
      Mulclair, the environmental minister for Charest government of Quebec was the one to put moratorium on Quebec’s fossil fuel exploration.
      Why must other provinces continue to support Quebec while Quebec sits on undeveloped resources that can help not only its people but Canada as well?

      • If the AB gov’t doesn’t effectively regulate the industry, the market eventually will.

        Driving up the costs of oil sands development through bottlenecking critical pipelines (the cheapest mode of transportation) resulting in deep discounting of bitumen, or forcing transport to more expensive modes of transportation is, in effect, equivalent to a sort of moratorium, economically induced.

        It is questionable which is the better approach. Lax regulation can accelerate development, but also result in more boom/bust.

      • You ever think it might be environmentally unstable to extract those resources in Quebec??? I never understand how people like you think Richard Meaden, how about we go away from fossil fuel use and invest in some other avenues that will ensure our grandchildren will at least be able to breathe air normally and not from a tank. I hope our grandchildren will experience canoeing, hiking, fishing. What the hell is wrong with the leaders of this world thinking we have to stay in line with the rest of the world. Get our damn money out of foreign accounts and put it back into Canada where it can invest here. We don’t need to play the game folks, get some education and look at the big picture, only govt’s want to keep us slaves by playing the wage and retirement game while they get to earn and take whatever the hell they want, what is wrong with this picture, don’t add to the problem, help find a solution to their greed before we are all in lines for bread, clean water and who knows maybe in the future it might be new gas masks we have to line up for.

  3. Doesn’t help to have thousands of foreign workers in Canadian jobs up there. They don’t pay taxes here and send most of the money home. Companies don’t want to train workers. They all want experienced workers. What if employers have to register with whatever level of government and let them know how many job openings they have? And then the government pays part of the wages of a new worker who needs to be trained? Say so much for a 1st year apprentice, a bit less for a second year, etc. Maybe that would help to get our young people working

    • Usually lousy jobs in remote areas pay a premium. In Norway, some oil workers make $180,000/yr. Interesting how a “free market” conservative like Harper has brought in a law that allows corporations to hire temporary foreign workers at a 15% discount to bring down the cost of wages. If he was not a hypocrite, he would allow the marketplace to determine the price of wages.

  4. There just doesn’t seem to be much of a distinction between those groups lobbying for the Alberta oil sands and those shilling for the tobacco industry. Both sides are quite willing to stand up before a regulatory committee and lie about the side effects of developing their particular products regardless of how injurious they may be to people heatlh or the environment. Both contain a lethal cocktail of carcinogens known to kill thousands of people every day. Yet the Prime Minister rises in the House to declare his undying support for the the massive petrochemical industry based out of Fort McMurray. He has no choice in the matter because to be seen impeding its progress would mean a certain death sentence for the Conservatives in the next election. The almighty petro dollar can buy a lot of votes. The NDP understand the political calculus involved with massaging their message about the tar sands. Politics aside, that my fellow Canadians is what constitutes an ‘economic reality.’ here in Canuckistan.

    • not a death sentence for the conservatives, but a huge reduction in tax $$$ and other money into government coffers. How is any party supposed to run the country if there isn’t any money there to spend on all sorts of programs ? Do you suggest we all go hunt and pick berries? I believe having a few million people running through the bush will hurt the environment too

  5. Seeing kerfuffle that was made over PM Harper, it is only fair to note how pudgy Mr. Mulciar looks in that picture. Thank goodness there is no leather vest, but still…

    • Thinking the same myself. Tom’s got a naughty tummy. He might want to hold the fries , and have a green salad with that AB beef instead.

  6. Quebec and New Brunswick refineries could be reopened and expanded to supply refined oil products to the entire US east coast, if the Enbridge line is fully reversed, and Transcanada converts some of its transcontinental gas pipelines to carrying cheap bitumen.

    The differential between Canadian oil prices and the world prices eastern Canada and the eastern US seaboard pay are getting huge.

    Bring those high-skilled high paid refinery worker jobs from Texas and Louisiana to Montreal and New Brunswick.

    • What happens if keystone goes through then? Stanford claims extra capacity will only make the margin worse. Mintz says that’s bull. They better get that straighttned out eh?

      • Yeah, I always thought that was somewhat of a paradox. Alberta wants the Keystone pipeline to go through so they can export oil to the US without having to pay the $30/barrel discount they now pay for exporting oil to the US…

        • There are 2 discounts. The $20-30 discount of Canadian oil to WTI (US oil traded at Cushing OK) and the $20 discount of $WTI to world oil prices (Brent set in London).

          Even if Keystone (and the Enbridge reveral, and TRP nat gas to oil pipeline conversion) the WTI to Brent discount is now likely to persist, which will make North American refining extremely profitable.

          Since the oilsands are long lived reserves, a refinery complex in Kitimat, and a rejuventated refining industry in Montreal and New Brunswick would provide a lot of long term, high skilled, well paying jobs for a couple of generations.

          Alberta would capture royalties. BC and Quebec would get jobs, and stable taxpaying refining businesses.

          Right now Texas and Louisiana are poised to capture most of this value-added refining.

  7. Refining the product close to the source would most likely contribute to lowering petroleum prices in North America, something that would be good for most Americans, as well as most Canadians. As for the idea that foreign workers don’t pay Canadian taxes, if Canada does not tax them, it is the only country in the world that does not. My sister, for instance, is a US citizen living in Japan, pays Japanese taxes, and deducts whatever she has paid from her US taxes, in accordance with a Japan-US tax treaty.

    • Refining is done near the market, not near the source. That’s why there’s so much capacity along the gulf coast, because of access to blue water ports and thus to world markets.

  8. NDP discovers the oilsands? They’re SOB of a leader Thomas Mulcair send two of his NDP cronies to Washington to encourage the White House to cancel the Keystone XL pipeline. Never have I seen a party in the history of this country that tried to cancel a multi-billion money generating project from Canada all due to ideology. I’m sorry for my language, but Mulcair and the NDP can go screw themselves. They’re no friends of our oil & gas sector, not one bit.

    • Their, they’re. Com down. You sound like the Pie-eyed Piper.

    • Multi-billion dollar investment for who? The corrupt leaders that always seem to end up in our office? That is one time, what jobs will be there once the pipeline is pushed through? What will the people of BC, Alberta and Saskatchewan have to drink, eat and breathe, and according to scientists maybe the rest of the world will be largely affected and not just surrounding areas. Damn greedy people who can’t get off their phones or out of their cars is killing us. There are so many cleaner ways, we don’t have to support oil to survive, there are biodegradable replacements for plastic, longer batteries, etc. You uneducated fools that follow the regime will be left in the dark one day wondering what the hell happened to the sun, clean air and uncontaminated food and water.

      • I smell pachouli.

      • Just a minute…those replacements need to be produced too. Unfortunately you can not run factories on wind or solar power alone. Those renewable energies need fossil fuels to operate. Look at the carbon footprint biofuels produce, for example. Fossil fuel operated machinery to plant the seeds, water, harvest, bring to the plant. Process in the plant, load onto trucks, deliver to gas station. Huge pollution to produce “clean fuel”. And you mention BC, where I live mostly off the land btw, the hydro dams they built, touted as clean energy, how many hundreds of acres of pristine land was flooded, how many environments destroyed, how many animals extinguished. A heavy price has been paid for clean renewable energy.

      • “Multi-billion dollar investment for who? The corrupt leaders that always seem to end up in our office?”

        When you want to ignorae reality then making things up works well.

        Multi-Billion dollar investment for every Canadian Jo-Ann. I don’t know what country you *think* you live in but in Canada 1 in 5 jobs is directly related to resource extraction. The federal taxes from these programs is 100’s of billions of dollars. You want to know where it goes? Bankers pockets? No.

        It goes to education, infrastructure, day-care, health care, on and on.

        grow up and read a book for once.

  9. I’d vote for Satan before Mulcair. He’s be more trustworthy. And I’d vote Mulcair before Justin T because he does not do drugs. Very happy with Stephen at the helm doing a great job.

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