Media coverage of the Keystone and Northern Gateway Pipeline projects demonstrate just how polarized the Canadian energy debate has become. Unless we can achieve a national consensus on Canada’s energy future, the current environment of confrontation will intensify and we’ll never find common ground on individual energy projects. A comprehensive national energy policy is needed to provide context to answer the many legitimate questions Canadians have about energy.

Should Canada sign another global emissions agreement? Should we price carbon? Is the Gateway pipeline, a critical piece of national energy infrastructure or a threat to the environment? Should the federal government assist the lower Churchill hydro project? Is an energy corridor from coast to coast in the national interest? Does it make sense to build a pipeline to ship bitumen to Canada’s largest refinery in Saint John? Should Ontario expect Alberta to manage the pace of its development so impacts are kept within its provincial boundaries? Should taxpayers or consumers pay for new renewable energy.

Energy policy is clearly about more than the facilitation of individual projects. It is about placing those projects within the wider context of what we want to achieve for our country and as a society. It is also about managing the entire energy cycle and the wider economic, social and environmental interrelationships. Our personal well-being, our quality of life and the competitive position of our country, hinge on the wise use of a stable supply of affordable and sustainable energy. Canada’s international reputation is affected by our record of environmental performance in the production and consumption of that energy.

Has New Brunswick learned from the Energy Hub?

Our experience in New Brunswick with the Energy Hub is that an ad hoc approach to projects without reference to a supporting energy policy is a short route to nowhere. However, mention the words “energy policy” to most people and their eyes glaze over. Energy policy has not been on the public radar for a very long time. The issues are too complex for 140 character conversations on twitter or 10 second television soundbites. It hasn’t helped that for several decades economists have pushed politicians toward a stance of non-intervention in the free market.

In fairness, the real reason there has been little public discussion of Canadian energy policy is the fear of another political bloodbath like the one that surrounded the scrapping of the National Energy Program (NEP). Only those over 45 will remember the coup, led by Alberta, that brought an end to energy policy making on a national scale. Albertans were furious over a two price system that was to have their oil exports taxed to provide relief for imported oil in the east. The politics of energy were at the root of western alienation, the rise of Reform  and the virtual death of Liberals west of Ontario.

Canada still has a virtual two price system

Ironically, Canada did get a two price system. Most of Alberta’s oil is sent south at a discounted US price, while eastern Canada buys about the same amount on the world market at a higher international price. Under the NEP the east were seen as being subsidized by the west. Under the current free market, unregulated system, no Canadians are subsidized and it is difficult to see how Alberta’s interests are being served. What is clear, is that  Alberta needs to move its oil to markets that will return the best value and from a national accounts perspective, it seems logical that we avoid exporting oil from one region at a price lower than that paid by another region for replacement imported oil. That this situation exists today, is a strong reminder of the lack of any thought given to national interest.

Alberta leading a new parade

With the encouragement of other Provinces and industry, Alberta’s Premier Redford is building support for a new National Energy Plan. Quebec Premier Jean Charest, Nova Scotia Premier Dexter, and Premier Selinger of Manitoba have joined the discussion. While Redford and Charest want to engage their provincial counterparts, neither see a leadership role for the federal government. Provincial antipathy toward federal involvement on energy policy is not a surprise, neither is the fact that there has been no push back from Ottawa.

With the death of the NEP in 1986, a shell shocked federal government vacated its responsibilities in energy and allowed its policy capacity to atrophy. Public servants with career aspirations have avoided the subject for most of the last twenty-five years. Canada, they have said, should rely on free market forces to provide solutions and in any event, energy is the responsibility of the provinces. Unfortunately, this abandonment of national leadership has proven to be a completely inadequate response and the reason Canadians are still looking for answers to their energy questions.

Energy a provincial responsibility with national implications

Intra-provincial energy issues fall within the jurisdiction of the provinces. However, the impacts of today’s large export driven energy projects are trans-boundary in scope and require the intervention of national governments as we’ve seen with the Keystone XL project. In getting its increased bitumen production to market, Alberta’s challenge is pipeline access across neighboring territories.  It is not surprising, then, to see Redford’s renewed interest in obtaining national policies that will assist Alberta.

Quebec’s return to the national policy stage is also not surprising. Charest will argue forcefully for policies that maintain Quebec’s dominant position in electricity development and distribution. Premier Charest will likely push for Ottawa’s withdrawal of support for competing developments like Newfoundland and Labrador’s Lower Churchill project. Given this motivation, a determination not to have federal involvement in the process of developing a national energy plan is beginning to look more like a palace putsch than an attempt at national consensus building. This is unfortunate, given that Canada’s diverse provincial interests represent a significant challenge to nation-building.

British Columbia has environmental and land use concerns related to the gateway pipeline. Ontario worries about paying trade penalties for Canada’s errant greenhouse gas emissions and loosing jobs to our petro-currency. Alberta will likely want relief from further restrictions on greenhouse gas emissions, especially if Canada signs any new global treaties. In Atlantic Canada, Newfoundland and Labrador and the Maritimes find themselves competing with Quebec over electricity exports. Power issues clearly resonate with Atlantic voters who want to see their Provinces working together to strengthen the Atlantic grid and the region’s export corridor. They also recognize that risk sharing with the federal government can overcome the region’s issues of economic scale.

Where’s the Honest Broker

In light of the developing interest in national policy, it is time to ask who will play the role of Canada’s honest broker? Who should balance the interests of energy producing provinces with energy consuming ones and who should ensure the interests of weaker provinces aren’t over run by the more powerful.

Premier Redford’s efforts demonstrate, perhaps unintentionally, that Canada really does need a national policy for energy. However, the process for arriving at that consensus should be brokered by the National Government, albeit with the provinces as equal parties at the table. A process led by Ottawa should insure the input of all those with an interest in our energy future and the fair balancing of our diverse provincial and regional interests.

The next Energy Minister’s meeting scheduled for September in Prince Edwards Island gives Canadian Energy ministers a great opportunity to shape Canada’s national agenda. Let’s hope they are ready in time.

This article appeared in the Saint John Telegraph Journal on Saturday April 21st, 2012.