What is a "national energy strategy" and in whose interest would it be developed? When the Premier of Alberta calls for a national strategy, is she thinking of the same thing as the Premier of Ontario?
Long memories in Alberta recall a similarly named program that seemed a thinly disguised attempt to move wealth from oil-producing provinces to the rest of the country. The latest C-Suite survey indicates that Western producers are resistant to talk of another national energy strategy, and it also indicates that they may have good reason.
Executives from across the country are overwhelmingly of the view that Canada's strength in commodities provides benefits for business across the entire country, not just in the producing regions. They reject the proposition that a strong energy sector is hurting other elements of the economy. Resources are seen – along with finance, water, and food – as the pistons that will drive the Canadian economy in the years ahead.
On one key element of a potential national strategy on which all executives are aligned: Pipelines are good. There is virtual unanimity that we should be building pipelines from Alberta in every direction – to the U.S. Gulf, to the Pacific, and to Eastern Canada. There is opposition to pipeline construction in the general public, but not in the business community.
However, as central Canadian executives anticipate very modest growth into the foreseeable future, they wonder whether there could be greater economic benefit to the non-producing regions. They think the lack of an energy strategy is holding back investment in the country. And they believe that more should be done to ensure that the benefits of oil and gas are spread more evenly across the country. Not surprisingly, most Alberta executives reject that proposition vehemently.
This provides some perspective on why Central Canadian executives tend to think the sale of Nexen to CNOOC should proceed with conditions, many revolving around control of the resource. Most non-Alberta executives see the oil-and-gas sector as enormously important and strategic for the entire country and therefore want control to remain in Canada so we can ensure national benefit. Most Alberta executives think their oil-and-gas sector is none of the rest of the country's business.
One possible way to balance these two perspectives is by refining the oil before export. Most non-Alberta business leaders like the idea of insisting on refining facilities in Canada as a condition of any pipeline construction. Alberta executives are not excited about that idea, but neither are most of them strongly opposed to it. It represents a possible point of consensus between the Prairies and the rest of Canada on maximizing the benefit from oil and gas.
On these issues, business-leader opinion is also likely a good surrogate for how public opinion will break down. Alberta and Saskatchewan are warily watching any attempts to scoop their windfall to buttress a struggling national economy, while Central Canada sees the resources as "national" assets that should be providing more pan-Canadian benefit. National energy policy was divisive in the 1980s – in better times with better prospects. It will be divisive again going forward.
David Herle is principal and Alex Swann is vice-president of the Gandalf Group.