Federal Liberals prepare Alberta aid package in case Teck oilsands mine is rejected: Reuters

OTTAWA — The Liberals are preparing an aid package for Alberta in hopes of appeasing the province if the $20-billion proposed Frontier oilsands mine is rejected, according to a report by Reuters citing anonymous sources.

As the mayors of Alberta’s two biggest cities were in Ottawa calling for fair treatment for the province, Reuters reported that approval for the project was shaping up to be a major battle within the Liberal party.

“There will be a big fight inside cabinet over this,” Reuters quoted one source as saying adding the person was directly familiar with the matter but requested anonymity given the sensitivity of the situation.

“Rejecting Teck without providing Alberta something in return would be political suicide,” the source told Reuters.

Options being considered in the provincial aid package, to be featured in the upcoming budget, include a cash injection to help clean up thousands of inactive oil and gas wells abandoned by bankrupt companies, five sources with knowledge of the situation told Reuters.

Also under discussion is expanding the federal fiscal stabilization program that helps provinces deal with economic downturns. Local infrastructure projects could also be in the mix, the source said.

A rejection of Frontier would cause an uproar in some Western provinces, where resentment toward Ottawa has been running high, particularly following an election result that effectively erased Liberal representation in the area.

Jason Kenney, the Alberta premier, has said the project would create 7,000 jobs and had the support of the Indigenous community. There had been ten years of reviews and there was no reason not to approve the project, he has said.

Calgary Mayor Naheed Nenshi on Thursday urged the Liberal cabinet to approve the mine and cautioned against an instinctual bias toward Eastern interests that would overlook the project’s benefits.

“This has been the concern since the election,” said Nenshi, who was in Ottawa to meet federal officials. “While it was only a net loss of five seats in Alberta and Saskatchewan, it means there is no one around the table who really has experience on the ground.

“If this project is not one that the government can approve, then they should just admit that there’s a moratorium on all energy investment in Canada.”

Calgary Mayor Naheed Nenshi: “I don’t think people outside Alberta appreciate really how delicate and how dangerous the political discourse and rhetoric is.” Azin Ghaffari/Postmedia/File

Rejecting the project would be “a devastating signal for investors looking at Canada”, a spokesman for Alberta’s energy minister said. About 20 oil sands projects currently sit dormant despite receiving approval.

Prime Minister Justin Trudeau has said his cabinet will deliver its final decision on Frontier by end of month. The verdict on the massive open-pit mine, proposed by Vancouver-based Teck Resources, will be viewed by some in the context of Trudeau’s ongoing promise to support economic activity while also meeting his highly ambitious climate targets.

Some Liberals have been vocal in calling for the rejection of the project.

“So should it proceed as it stands? I think it’s a pretty easy no,” Toronto MP Nathaniel Erskine-Smith told HuffPost Canada.

However, Deputy Prime Minister Chrystia Freeland, who has the job of repairing relations with the province, and Natural Resources Minister Seamus O’Regan are widely believed to be tilting towards approving the project, while many other cabinet members remain undecided.

The Liberal government has repeatedly claimed that the “hand-in-hand” nature of the economy and the environment would not require Ottawa to quash investment opportunities, including in the natural resources sector.

Edmonton Mayor Don Iveson, who also spoke to the National Post called for a non-politicized assessment of the mine.

“I think it’s critically important that the regulatory process be allowed to play out, and that each individual project, whether it’s Teck or whether it’s others, be assessed on their merits,” he said.

If this project is not one the government can approve, then they should just admit that there’s a moratorium on all energy investment 

He also said the project “has to fit within Canada’s long-term emissions profile,” after Trudeau pledged during the last election that Canada would reach net-zero emissions by 2050. The target has been cited by environmental groups as a reason to reject the Teck mine, which would emit around four million tonnes of greenhouse gas emissions per year over a 40-year period.

Teck pledged earlier this week to reach net-zero emissions by 2050, a target that could prove challenging for an sizeable upstream mining company with global operations.

Environment Minister Jonathan Wilkinson has been neutral on the Teck decision, but has been adamant that Alberta or private sector oil companies will need to work toward narrowing their emissions profiles.

In meetings with federal officials on Thursday, mayors had made clear that industries across Canada need a “clear and level regulatory playing field” that would allow the right projects to move ahead, Iveson said.

Federal opposition members of Parliament have been calling on Trudeau to expedite an approval of Frontier, and warned of dire consequences if it is rejected.

“Let me offer this serious caution: a political rejection of Teck Frontier… will be perceived by most Albertans as a final rejection of Alberta by Canada,” MP Shannon Stubbs, who represents the Alberta riding of Lakeland, said on Twitter Thursday.

The Liberal government has sought to improve its communications with Western provinces since the election. Freeland was named Deputy Prime Minister and Minister of Intergovernmental Affairs in 2019 as part of an effort to improve ties between Ottawa and Alberta.

Jim Carr, the Liberal’s special representative to the prairies, acknowledged at a recent event in Calgary that the Liberal government has to do “a much better job” of making Western voices feel like they are heard.

“My party and my government is not popular here,” he said, drawing some laughter from the crowd. “I mean, you don’t have to be a genius to figure that out.” He went on to say he understood the “anxiety that’s caused by hardship” in Alberta, which has been locked in a downturn since oil markets collapsed in mid-2014.

But Nenshi warned that Ottawa-appointed officials are unlikely to grasp the depth of sentiments felt in Western provinces against the federation.

“As much time as people like the deputy prime minister and Jim Carr have been spending in Alberta and Saskatchewan — and we really appreciate it — they don’t live there. They don’t see it and hear it every day.

“I don’t think people outside Alberta appreciate really how delicate and how dangerous the political discourse and rhetoric is.”