Updates
Later, 7:00 p.m. CDT: Bloomberg -- "NAFTA crunch caps a pretty dreadful week for Justin Trudeau." Yeah, like that's an understatement. Trudeau is doing to Canada what Obama did to the US. The bad news: no term limits in Canada. From the linked article:
This has not been a good week for Justin Trudeau.
It began with a surprise U.S.-Mexico trade pact that excluded Canada from a Nafta rewrite, sending the prime minister’s negotiating team scrambling to strike a deal ahead of the Trump administration’s deadline.
Then a key pipeline he spent billions to nationalize got sideswiped by a court decision, and the most important ally in his climate change plan abandoned him. And now the White House has informed Congress of its intent to sign an new agreement with or without the northern nation.
While the 46-year-old leader has had plenty of political stumbles during his first mandate, the events of the last few days are among the heaviest blows Trudeau has taken on core economic files. They come just as his Liberal government prepares to reset its parliamentary agenda going into an election year.
“The opposition are going to try and paint this as an example of incompetence,” said Robert Bothwell, a professor of Canadian history and international relations at the Munk School of Global Affairs at the University of Toronto.So much more at the linked article.
Later, 10:04 a.m. CDT: Trudeau's political future is toast. From Bloomberg, Trudeau's grand bargain unravels after Alberta's carbon plan nixed.
Canada’s precarious relationship with its vast oil riches flared up again Thursday after a federal court struck down Prime Minister Justin Trudeau’s approval of a key pipeline, reviving fears about the country’s ability to get its resources to market.
While the government pledged to press ahead with the C$4.5 billion ($3.5 billion) Trans Mountain expansion, the leader of oil-rich Alberta pulled out of Trudeau’s marquee national climate plan in protest after the ruling. Indigenous groups and the City of Vancouver had mounted the challenge, and their success highlights the extraordinary political, legal and social battles that a divided Canada has faced for years in developing the world’s third-largest crude reserves.Note the Bloomberg price: $3.5 billion.Where did that come from. Without the delay, it's a $7.4 billion project; with a delay to 2021, Kinder Morgan estimates a $9.3 billion project. This is the first time I've seen a $3.5 billion price tag.
Original Post
For Canada, the judge killing the Trans Mountain Pipeline expansion is akin to what happened to San Francisco in 1906; it is akin to a 8.0 earthquake hitting downtown Los Angeles. Pundits have not yet figured that out.
This morning's on-line edition of the WSJ did not mention the judge's ruling. I'm sure it is there, but it was not easily found. Suggesting to me that, again, pundits do not know how really, really serious this is for Canada.
The Financial Post did have a long article on the ruling.It may or may not be behind a paywall now. It wasn't overnight. I can still access it this a.m. From the article:
- clarity on the cost -- the court decision is expected to cause further delays to the project and drive up its final price tag, previously estimated at $7.4 billion. Kinder Morgan’s disclosures had shown the price could rise as high as $9.3 billion if construction wraps up in 2021. The court just cost Canada another billion or so in costs because this won't be completed by 4Q21
- in addition, all the lost crude oil royalty income is .... incalculable ....
- former Saskatchewan premier Brad Wall said the duty to consult with Indigenous people is critical but added, “the benchmark keeps changing.”
- Wall said Justice Dawson is the same judge [and, of course, Trudeau was well aware of that] who ruled Ottawa did not fulfill its duty to consult during Enbridge Inc.’s Northern Gateway pipeline project application, which he said is all the more frustrating since both Ottawa and Kinder Morgan attempted to work the recommendations from that process into its consultations with First Nations
- “If I were a betting man, I’d say 2021 or after that,” Galison said
- by that time, Scotiabank commodity economist Rory Johnston said the amount of crude oil moving on railways cars would continue to grow without new export pipelines as the current export system is full and in apportionment
- “You need two of the three (currently proposed pipelines) to clear our egress issues,” Johnston said, referring to the Trans Mountain expansion, Enbridge’s Line 3 project and TransCanada Corp.’s Keystone XL project
- without new pipelines in 2023, he said railways would be moving 700,000 bpd out of Canada — a massive increase over current out-bound rail shipments of 200,000 bpd, which itself is an all-time high
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