CALGARY — Canadian oil and gas stocks climbed Monday on the news of Prime Minister Justin Trudeau’s resignation, but analysts say the country’s energy sector will still be challenged by uncertainty in the months to come.
As news of the Prime Minister’s decision became public, some energy investors and traders took to social media to cheer the news. Canadian oil and gas stocks jumped to lead all other sectors in terms of gains Monday, with the S&P/TSX capped energy index climbing as much as two per cent in mid-day trading before settling to close up 0.79 per cent.
Several oil and gas industry groups declined to comment in the immediate wake of Trudeau’s announcement, but Heather Exner-Pirot — a special advisor on energy to the Business Council of Canada — said she believes the overriding feeling in the oilpatch Monday was one of “relief.”
Canada’s oil and gas sector has had a rocky relationship with Trudeau’s government over the past decade, Exner-Pirot said, and many of the policies brought in under his leadership have been viewed as being outright hostile to oil and gas development.
“The Liberal government (under Prime Minister Trudeau) has made Canada’s oil and gas sector uncompetitive,” she said.
“So there is some optimism now that Canada will finally be a place that’s open for business.”
The federal government under his leadership made a major investment in the oil and gas sector through its purchase of the Trans Mountain pipeline in 2018. As owner of the project, the federal government also completed a multi-billion-dollar expansion of the pipeline which has allowed Canadian oil production and exports to climb to new heights.
But the Liberal government’s commitment to its climate goals also saw it introduce a host of policies that were hugely unpopular within the industry. These included the federal Impact Assessment Act (dubbed the “No More Pipelines Act” by its detractors), the federal moratorium on oil tanker traffic off B.C.’s northern coast and the recent anti-greenwashing legislation, which led a number of oil and gas companies to scrub their websites of content related to the environment.
The Trudeau government’s proposed oil and gas emissions cap, which has not yet been finalized, faces staunch opposition from both the industry as well as the oil-producing provinces of Alberta and Saskatchewan.
The Business Council of Alberta, which represents many of the country’s largest oil and gas producers, has called the proposed cap a “discriminatory and divisive” policy that could result in the province losing tens of thousands of jobs.
Source: The Canadian Press
