Jody Wilson-Raybould’s silence over Trudeau’s SNC-Lavalin woes speaks volumes

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It’s been a burning question for weeks in politics — what did Jody Wilson-Raybould do to get bounced out of her job as justice minister in Justin Trudeau’s cabinet?

Well, now we know one theory about her firing offence: an alleged refusal to do a legal favour for SNC-Lavalin, the Quebec firm with long and lucrative ties to the federal Liberals.

And so, the once-burning question in the capital’s chattering corridors of power is now a flaming bag of trouble sitting on the very doorstep of the Prime Minister’s office. In the process, the biggest victim of Trudeau’s relatively minor cabinet shuffle last month is now perceived as its loudest whistleblower, whether she embraces that new role or not.

Not that Wilson-Raybould, now veterans affairs minister, was particularly loud on Thursday. In fact, she didn’t have a thing to say in the wake of the Globe and Mail’s explosive story of how the former justice minister reportedly stood in the way of a deal to let SNC-Lavalin detour around prosecutions that could have blocked it from receiving government contracts for years to come.

Wilson-Raybould’s silence, however, was far louder than the prime minister’s carefully chosen words of denial, about how his office had not “directed” the former minister to give the go-ahead to what’s known as a “deferred prosecution” of SNC-Lavalin.

“That is between me and the government as the government’s previous lawyer,” Wilson-Raybould was quoted as saying in the Globe’s scoop, as well as a cryptic, “I don’t have a comment on that,” in reply to more pointed questions about how she handled the SNC-Lavalin case.

Pro tip: “No comment” only works as a clever misdirection in fictionalized political journalism. In real life, it is often regarded as confirmation. That’s certainly how Wilson-Raybould’s failure to comment was being interpreted in government and opposition circles on Thursday.

Speaking of no comment, Trudeau hasn’t really explained why he plucked Wilson-Raybould out of her post as Canada’s first Indigenous justice minister and put her in charge of a department where many political careers go to die.

That silence also created an opening, particularly for rumours and resentment. I attended a dinner last week in honour of Robert Burns, attended by a significant contingent of female cabinet ministers and Liberal MP Celina Caesar-Chavannes. When it came time for Caesar-Chavannes to speak, she stepped up to the podium with a hilarious poke at Scots and Burns culture in general, but also a couple of sharp jabs in particular to her own government.

One of those jabs was aimed squarely at the ouster of Wilson-Raybould from the justice job, and a joke about how an Indigenous woman lost her post for doing it well and unsettling the “white man.” Many in the room did a sharp intake of breath — did someone say that out loud? Wilson-Raybould, for her part, laughed and applauded loudly.

It was a telling indication of what could be a more widespread morale problem in Trudeau’s government as an election looms, not to mention a foreshadowing of this week’s trouble. Wilson-Raybould’s demotion has opened up a conversation about who’s in favour with the tight circle of power in the PMO and who’s fallen out of favour — and why is that circle so tight, anyway?

This newest bombshell of a story comes directly out of that conversation, with the bonus addition of alleged corruption and too-cosy ties with big Quebec donors — the kind of thing that put Liberals in the political wilderness for nearly a decade not so long ago. SNC-Lavalin, many were reminding us on Thursday, was the same firm that was detouring around election laws for much of that decade to put roughly $110,000 in the party’s pocket in those lean years.

As all political communication operatives know, the ring of truth is often more believable than the complicated truth. Wilson-Raybould’s demotion may well have been a complicated result of many things, and it should be noted, without getting into the details here, that these deferred prosecutions to which she allegedly objected are legal and even defensible in many cases.

But it has all the ingredients of the well-worn political narrative in Canada — a Liberal PMO too cosy with Quebec, a defiant hero and a corporate villain with ties to sketchy donations.

Governments are often frustrated by their inability to write their own stories. But this is another example of an old lesson in politics: the most dangerous tales are those told by aggrieved insiders, often without saying any more than “no comment.”

Susan Delacourt is the Star’s Ottawa bureau chief and a columnist covering national politics. Reach her via email: sdelacourt@thestar.ca or follow her on Twitter: @susandelacourt

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Singh not fully to blame for NDP woes

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In politics, we are told, anything can happen. A week is an eternity and the predictions of experts may prove useless.

For Canada’s federal New Democrats this credo — the possibility of a bright future — is the only good news. Because right now, the party is languishing. It is low in the polls, starved of money and largely invisible

NDP Leader Jagmeet Singh speaks to a man and a woman in a coffee shop during a tour of the Montreal borough of Outremont, on Dec. 22, ahead of federal byelection which is expected to be called in early 2019.
NDP Leader Jagmeet Singh speaks to a man and a woman in a coffee shop during a tour of the Montreal borough of Outremont, on Dec. 22, ahead of federal byelection which is expected to be called in early 2019.  (Graham Hughes / THE CANADIAN PRESS)

Within party ranks, much of the blame is placed at the feet of its new leader, Jagmeet Singh. A bitter slogan, “Singh or swim,” is making the rounds.

Indeed, Singh has not delivered. He won the NDP leadership on a promise to expand the party’s reach, particularly among suburbanites and new immigrants.

So far, that hasn’t happened. The party’s performance in byelections has been tepid. The gains it had made in Quebec under Jack Layton and Thomas Mulcair are threatened.

In British Columbia, the Greens are siphoning off traditional NDP supporters. One prominent New Democrat is even thinking of running for the Greens.

In Alberta, the federal party’s anti-pipeline position is earning it no friends. Linda Duncan, the party’s sole MP in Alberta says she won’t run in October’s federal election. Her Edmonton seat is not likely to remain New Democrat.

Singh has also managed to antagonize almost the entire Saskatchewan wing of the party. He has done so by evicting Regina MP Erin Weir from caucus for the crime of being socially inept — a sin that put the popular New Democrat in the crosshairs of the Me Too movement (Weir was accused of standing too close to some women and talking too much to others).

Even in Toronto, where the NDP has a chance of winning back some of the seats it lost to Justin Trudeau’s Liberals four years ago, party activists are demoralized.

Talk of using the so-called Leap Manifesto to revitalize the NDP and point it in a more activist direction has produced little.

Is this all Singh’s fault? Certainly, he hasn’t helped. He won the leadership on the poetic slogan of “love and courage.” But he has not managed to translate this into anything real.

Indeed, the most memorable promise he made during that campaign was to eliminate what’s left of the universal Old Age Security program for seniors and wrap any savings into a new means-tested benefit for the elderly poor.

It was a bold move if for no other reason than it ran counter to party policy. Luckily for Singh, few paid much attention to it.

In fact, few have paid much attention at all to Singh. He initially chose not to seek a seat in the Commons in order to spend more time building the party across Canada. But the party remains unbuilt and Singh remains unnoticed.

Now he has changed his strategy and plans to run in a B.C. byelection. If he wins, he will enter the Commons just a few months before it shuts down for the next federal election campaign — raising the question as to why he is even bothering.

If he loses (as some New Democrats privately hope), he will be under pressure to step down as leader.

But Singh alone isn’t responsible for the NDP’s travails. The party remains confused about where it stands on the big issues of the day. It opposes building pipelines to move bitumen from Alberta but is vague about the future of the tarsands themselves.

It supports electoral reform. But, as the results from a recent B.C. referendum suggest, the general public does not.

The party’s position on free-trade deals seems indistinguishable from that of the Liberals.

The NDP has still not recovered from Trudeau’s feint to the left during the 2015 election campaign. Its response has been that the devious Liberals can’t be trusted to deliver on their promises.

But the problem with this strategy is that sometimes the devious Liberals do deliver — as they did with the legalization of marijuana and the Canada child benefit.

All of which leaves New Democrats in a terrible quandary. What can they realistically offer that the Liberals have not already promised? And who is this guy Jagmeet Singh anyway?

Thomas Walkom is a Toronto-based columnist covering politics. Follow him on Twitter: @tomwalkom

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As politicians blame pipelines for Alberta’s oil woes, labour union says past governments ignored upgraders and refineries

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CALGARY—Alberta’s energy minister was on the defensive Monday, fending off accusations the NDP government ignored or downplayed warnings as early as this spring about the price-differential crisis now gripping the oil industry.

Shortly after Premier Rachel Notley announced on Sunday a temporary cut in oil production of 8.7 per cent — a bid, starting in January, to reduce the price gap and increase revenue — Alberta Party Leader Stephen Mandel accused the government of sitting idly by as the differential widened.

“I’m not sure why any government wouldn’t have a program in place that allowed the changes and the reduction and curtailment to happen earlier rather than wait for as long as they have,” Mandel told reporters.

While opposition parties took aim at the NDP and the federal government, political observers and industry watchers say the current crisis was decades in the making. They argue successive Alberta governments are to blame for ignoring advice to pace oilsands development and encourage energy companies to upgrade and refine bitumen into higher-valued petroleum products.

In recent months, the price differential between Alberta crude, known as Western Canadian Select, and West Texas Intermediate has grown due to an oversupply of oil and lack of pipeline access. The differential is costing the Canadian economy an estimated $80 million a day, according to the province.

Energy Minister Marg McCuaig-Boyd told reporters Monday she wasn’t sure when the provincial government learned about the impending differential crisis but maintained the NDP took action immediately.

“I don’t know the exact timeline,” McCuaig-Boyd said. “We’ve known that this has been an ongoing issue, this differential. Not sure of the timeline, but it’s certainly not like we sat back and did nothing.”

The mandatory curtailment would see the production of raw crude and bitumen slashed by 325,000 barrels a day in the New Year, with a 10,000 barrel per day exemption for smaller producers. The province expects the reduction to fall to an average cut of 95,000 barrels per day by the end of 2019.

Notley said she expected the move to reduce the price gap by $4 US per barrel and add about $1.1 billion to government coffers.

At a news conference Sunday, United Conservative Party Leader Jason Kenney called it a “difficult moment for Alberta” but said the premier’s announcement was needed to stem the differential. Still, the opposition leader slammed the federal government for failing to build pipelines in recent years.

“We never should have been in this position,” Kenney said.

The differential — while impacted by many factors — is being dealt with by government curtailment because there are currently 35 million extra barrels in storage in Alberta that can’t be moved out due to a lack of pipeline capacity.

The government is cutting production in the hopes this number goes down. However, most political leaders agree the province needs more pipelines as an ultimate solution.

Kenney criticized Prime Minister Justin Trudeau’s veto of the Northern Gateway pipeline in 2016. First proposed in the mid-2000s, the pipeline could have been operational in 2019, moving an estimated 500,000 barrels per day.

He also called out former U.S. President Barack Obama for his 2015 veto of the Keystone XL pipeline, first proposed in 2008.

TransCanada’s Energy East was another pipeline that never saw the light of day. It would have moved hundreds of thousands of barrels per day to Eastern Canada in the hopes it replaced foreign-bought oil, Kenney said.

And most recently, in August, the Trans Mountain pipeline expansion was quashed by a Federal Court of Appeal because the federal government had not consulted with Indigenous groups properly and not fully considered coastal tanker traffic. The increase would have allowed around 600,000 additional barrels per day to be sent from Edmonton to Burnaby on the B.C. coast.

Kenney said that Alberta produces around four million barrels per day, with three million being shipped through pipelines and by rail. Alberta refineries use about 600,000 for domestic consumption in Western Canada, he said, leaving 400,000 extra every day to fill the growing backlog.

Both Kenney and Notley are calling for more pipelines as a solution to the differential and in the hope it boosts the energy economy. Even though the premier has said she would buy around 7,000 rail cars to ship 120,000 more barrels per day beginning in late 2019, it’s not an ideal situation.

“You might want to think of that next time you’re held up at a rail crossing,” Notley said to activists who oppose pipelines.

But this predicament was decades in the making, says Gil McGowan, president of the Alberta Federation of Labour. McGowan points to the blueprint laid out by former premier Peter Lougheed: ensuring each approved oilsands project came with an upgrader attached.

“The policies pursued and promoted by the conservative governments that followed Lougheed amounted to nothing short of gross negligence,” said McGowan.

“If we had built more upgraders, if we had more refineries, we wouldn’t be in the mess that we’re in today because the supply glut could have been drawn down.”

He took aim at the talking point often raised by Kenney and other politicians that the Energy East pipeline would replace foreign-bought oil, noting the biggest refinery in Eastern Canada, owned by Irving Oil, can’t refine heavy crude from Alberta.

Further, he added, “Energy East wasn’t going to go to the Irving refinery; it was going to go to an export terminal owned by Irving right next door, and it could be shipped out of Canada.”

Duane Bratt, a professor of political science at Mount Royal University, said Alberta has been subjected to the price differential for decades, once referred to as the bitumen bubble by former premier Alison Redford.

While the NDP strongly advocated for additional upgraders and refineries when it was in opposition, that talk waned after the party took office in 2015 and realized how much those projects cost, said Bratt.

Refineries require billions of dollars in capital, he explained, and companies, particularly those with facilities in other jurisdictions, are understandably reluctant to invest in new projects.

“People often talk about upgrading and refineries, except for those experts in the sector and people once they get into government,” Bratt said.

Kieran Leavitt is an Edmonton-based reporter. Follow him on Twitter: @kieranleavitt

Trevor Howell is an urban affairs reporter with StarMetro Calgary. Follow him on Twitter: @tshowell

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Global credit ratings agency warns of downgrades in Canadian oilpatch if crude price woes persist

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Global credit rating agency DBRS is warning that if Canada’s crude oil price woes drag on without improvement, it could negatively affect the credit ratings of energy companies that rely on Western Canadian oil.

The Toronto-based firm said in a commentary Wednesday that while global and U.S. oil prices have dropped, Western Canadian producers have been under even « greater duress » as Canadian benchmark prices have fallen even more.

Generally, integrated energy companies — those that own refineries and gas stations — have been able to weather the steep price discounts. But other, less diversified producers have struggled.

If the bottlenecks making it difficult to get more oil to U.S. markets continue unabated, DBRS says producers that rely on Western Canadian energy production are at risk of  « a material degradation in cash flow and resulting key credit metrics. »

« This has happened quickly and it is of concern, » Victor Vallance, senior vice president of energy at DBRS said in an interview.  « And if it stays this way for some period of time, it will likely cause us to take action on our ratings and lead to downgrades. »

A shortage of pipeline capacity and oilsands production growth has led to bottlenecks that widened the usual price gap between Canadian crude and the American benchmark.

For weeks, the price of Western Canadian Select (WCS) has been tracking roughly $40 US a barrel less than West Texas Intermediate. In better times, it might track around $15 below.

The widened oil price discount is costing some companies and the government dearly. Analysts have said both are losing tens of millions of dollars every day because of the discounts.

DBRS didn’t name any particular companies that could come under credit scrutiny as a result of the Canadian price discounts.

But Vallance said the agency would determine within six months whether action would be necessary.

« It really comes down to seeing an improvement in pricing and that would be related to getting more transportation capacity in place and/or seeing additional production being shut in beyond what’s shut in currently, » Vallance said.

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Canada’s oil price woes reaching an ’emergency situation,’ Cenovus CEO says

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The head of one of the country’s largest oilsands producers says Canada’s oil price woes are reaching an « emergency situation, » and on Wednesday saw his company’s call for production cuts echoed by a competitor. 

Oil « is a provincial resource and… we’re giving it away for free, » Cenovus Energy CEO Alex Pourbaix said on CBC Calgary’s morning show, The Eyeopener.

« Nobody is making money at this price and this is rapidly becoming an emergency situation in the economy. »

Pourbaix made the comments following his company’s calls for the Alberta government to mandate temporary production cuts to help deal with an oil glut and pipeline bottlenecks that are weighing heavily on many producers.

The value of Western Canadian Select is tracking roughly $40 per barrel less than the U.S. benchmark. On Wednesday it was at $15.75 US a barrel, compared to $56.18 US for West Texas Intermediate.

Calgary-based Cenovus is blaming political setbacks for the failure to build pipelines, urging the province to take action.

That sentiment was echoed Wednesday by Canadian Natural Resources executive vice chairman Steve Laut, said his company is « fully supportive of curtailments » by all Alberta producers.

« It’s something that has worked in the past, » Laut told CBC News. 

Laut noted that then-premier Peter Lougheed cut output in 1980, a point also raised by Cenovus. 

« It just makes total sense. It’s the simplest, cleanest and most effective way to ensure Albertans get value for resources and end the subsidies to U.S. buyers, » Laut said. 

Analysts have said that while many Canadian oil companies can’t seem to catch a break on prices, some American refineries are enjoying a « heyday » because of the price differential. 

If the whole sector reined in production, Laut believes there probably would be a market response almost immediately from the psychological effect of the news. 

« But I think, depending on what size of curtailment they used, it could be within 30 to 50 days, » for the strategy to correct the supply-demand problem, Laut said.

Canadian Natural Resources executive vice chairman Steve Laut told CBC News that the company is ‘fully supportive of curtailments’ by all Alberta producers. (Larry MacDougal/Canadian Press)

CNR said recently it has already cut production by up to 15,000 barrels per day and could increase that figure to as much as 55,000 this month and in December.

Canadian prices crashed in September because of a backlog of oil in Alberta.

The Fort McMurray region has increased production throughout this year, but export pipelines are full and several refineries in the U.S. which process heavy oil from Alberta, have shut down for maintenance.

Some industry experts now expect low prices for Canadian heavy crude could persist into 2020, though more export pipeline space is expected once Enbridge’s Line 3 replacement project is complete in about 12 months.

The situation has stung many Alberta producers, with one estimate pegging the cost to the sector at $100 million a day.

But some observers have noted that not all companies are affected the same way and it would be difficult to get everyone to agree on output cuts.

Large integrated companies would not be affected like companies without refineries or other options for their oil productions, said Warren Mabee, an expert on energy policy at Queen’s University.

Suncor president and CEO Steve Williams told analysts this month that the market is working. (Jeff McIntosh/Canadian Press)

Indeed, Suncor’s CEO said this month his company has full pipeline access to market for all of its production.

« That was a strategic decision we made, » Steve Williams said in a financial call with analysts.

« I have a great deal of sympathy for where the market is, and I understand the pressure that others are under. We invested for this circumstance to make sure it had — it’s not a zero impact but minimal impact on us.

« So what’s happening is, the market is working. The higher cost producers are having to pull back because they’re not making any margin on their last barrel. We are not in that circumstance. »

The provincial government has so far said little about the call for mandated production cuts.

On Wednesday, it reiterated its position that Premier Rachel Notley is fighting to build new pipelines and pushing Ottawa to step up and help fix the backlog in rail shipments.

However, spokesman Mike McKinnon said in an email that « we’re not ruling out any options. »

In Calgary on Wednesday, the federal natural resources minister said he shares Albertan’s « frustration » at billions of dollars being lost to the Canadian economy due to oil price discounts linked to export pipeline capacity constraints.

Federal Natural Resources Minister Amarjeet Sohi said Ottawa is focused on finding long-term solutions for the oil sector. (CBC/Scott Neufeld)

But Amarjeet Sohi said Ottawa is focused on finding long-term solutions by getting approval for new export pipelines such as the Trans Mountain pipeline expansion project it bought in August.

Asked about an Alberta request in October for the federal government to support crude-by-rail shipments, Sohi said the Alberta request is being examined by his department but he hasn’t actually seen it.

« My department is engaging with provinces, we are engaging with other federal departments, to see what can can be done in the short term, » Sohi told reporters. 

« But as you know, more than 200,000 barrels of oil is shipped through rail now and that is going up. What we need to do, we need long-term solutions. »

With files from The Canadian Press

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