Liberal contender Trudeau supports Nexen takeover, not Northern Gateway
Nexen-CNOOC deal would create middle-class jobs and bolster trade relations with China, he says.
Oil & Gas
mergers and acquisitions
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 (CNOOC) $15.1-billion takeover of Calgary-based oil and gas producer Nexen Inc. is “good for Canada” because the deal would 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.
Trudeau said Prime Minister Stephen Harper’s government has “completely failed” in courting much-needed foreign investment, at a campaign event for Harvey Locke, the Liberal candidate in the Nov. 26 byelection in Calgary Centre.
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.
Trudeau also stressed the need for Canada to diversify its energy exports outside of the US. The International Energy Agency has predicted the US 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 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, BC, from which it would be sent to Asia via tanker.
“The Northern Gateway pipeline…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.”
There are alternatives, however, Trudeau says, such as Kinder Morgan’s plan to expand its Trans Mountain line, which currently deliver crude to the BC lower mainland.
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 to paint Trudeau as someone with no gravitas on crucial economic matters.
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 October.
The day after the launch, Trudeau flew to Calgary to declare his support for development of Alberta’s oil sands 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.
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.
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.
©The Canadian Press