Pipeline For The Confusing

On Last Week’s Pipeline Announcement

So Danielle Smith wants to build a pipeline that will go to the Pacific, and David Eby has no right to stop it, though he could have wasted a lot of time. And in exchange for not wasting said time, Eby decided to cut a deal with Ottawa to essentially get paid off.

Not bad work from Eby, honestly.

Getting the North Coast tanker ban continued - in other words, any pipeline will go to southern BC - will be the headline, but the promises of compensation and revenue sharing are the dogs that actually hunt for a province running a very bad deficit. Eby’s gotten the Feds to do what Smith couldn’t in last year’s MOU - they clearly understood they had the leverage, and they got the Feds to give everything and the kitchen sink, like Alberta did when they signed up for carbon capture and no Federal subsidy dollars on a pipeline in exchange for regulatory approval. (We will come back to this.)

But I’ve been sitting with the details of this deal for a week now, and I’m still coming back to this one question, time and time again - what does Danielle Smith want these days? Because I can’t tell, and I don’t think she knows either.

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Does Danielle Smith want Alberta to own a pipeline in the long term? There is no private sector company wanting to sole-build this pipeline, but Smith needs a pipeline announced before October’s referendum and she wants shovels in the ground by mid-2027 before the next election (if it’s going to be held at the usual time). So it seems like she’s going to start building this thing with public money and then maybe sell Alberta’s stake once it’s in construction? If she’s really on board with government ownership, I mean, welcome Comrade Smith, but I can’t imagine she is.

So what’s the answer? I don’t know, and I don’t think anybody in Alberta does. Smith is having to handle a very difficult, very demanding internal political situation. The UCP is now not a unified federalist party, and as we saw with the Kenney years, the party didn’t actually come together when Wildrose and the PCs were unified again. The three traditions of Alberta politics - rural social conservativism, urban fiscal conservatives with socially liberal values, and the liberal left - never went away. All that’s happened is the coalitions of those three groups at a party political level have changed. The PCs needed a significant chunk of the liberal vote to stay in government in 2012, and Notley in 2023 saw her make big inroads with urban moderates. Not enough, but a lot. Now? Nenshi’s not Notley, which means the UCP is less scared of losing a general election and the harder right wing of the party no longer wants to go along to get along to stop the NDP.

The fact that nobody believes the NDP can win the next election is the underlying current of everything happening in Alberta. I’m not saying that that characterization is true, but because nobody fears Nenshi, the fight isn’t “how do we beat the NDP”, it is “how can we get the version of the UCP we want”. And that distinction means Danielle Smith is more scared of losing power via an AGM than she is of losing power at the ballot box.

I want to be glib and say that this is Nenshi’s fault, and in some ways it is - if he was better at his job, the UCP would care more about governing for the province and not for their psychodrama. But it’s also true that Alberta governed for the psychodrama during and after COVID, even when Notley had big leads in the polls. Alberta’s DNA is that of a conservative province, which means it’s hard to blame Nenshi for too much of the fact that nobody thinks he can win.

So Danielle Smith has gotten a pipeline - maybe! - that she has to foot much of the bill for, even with a small private sector help and the Feds, and she’s probably through her next two major electoral events safely. But is the legacy she wants really owning a pipeline with Mark Carney? Or is this yet another step in Smith’s never ending fight to keep the power she felt taken from her in 2012, without any actual priority for what she does with it?

Smith is best understood, as I wrote about the Calgary arena deal in 2023, as someone desperate for that power she didn’t get and willing to throw the baby, the bathwater, and the bath tub out to keep power. That’s still her mantra, which is why she’s willing to both ram through a referendum to appease her base and then vociferously defend Canada. It’s a balancing act in the name of avenging what Lake of Fire took from her. Understood as such, the willingness to do whatever to keep power makes sense.

Where I’ve struggled more is TMX, and the Feds owning a chunk of this pipeline. And yet, the longer I think about it the more okay I am with it, for a simple reason - if somebody’s going to build this thing and the numbers pencil out, we should probably have the ownership stake.

The problem with Canadian governmental policy is it is too often we have subsidized private entities with tax breaks and deferrals instead of joint ventures where they retain equity stake. In this case, if the pipeline’s a bust, we’re fucked, but the combination of mostly mirroring the existing TMX route and the fact that global instability has made Canadian oil more valuable presumably makes this pencil out. I would like someone to make the case that this will pencil out before I get on board, but at the end of the day if it’s a good investment I’d rather us get the profits.

But at the end of the day this pipeline is an acceptance of our current reality - the price of being a country is a price that means we have to give Danielle Smith what she says she wants. But my question remains - what does she actually want in the long run? Because until she answers that, Alberta will continue on the hellish path it currently occupies, and we will be no closer to getting off the merry go round of bad policy.