Keystone blunder

Written by Brenda Schimke

It was a risky move. Premier Kenney said so himself when announcing the investment in Keystone pipeline calling it a $7.5 billion “bet”.

Opposition leader, Rachel Notley, at the same time called it an unwise decision to put billions of dollars of taxpayers’ money into a project controlled by a foreign country.

Sara Hastings-Simon, research fellow of Public Policy at the University of Calgary was more reflective in her criticism. Kenney, pronouncing the investment as “kick-starting the economy” and comparing himself to former Premier Peter Lougheed, missed the mark. Lougheed’s investments were transitioning into something new, Kenney’s are not.

If we learned one thing over the last four years, it’s that the American system of governance is fraught with problems—specifically as it applies to the powers of the President to issue Executive Orders. The Keystone pipeline never, let me repeat, never received all its necessary regulatory approvals to be built. Even as President Obama cancelled the pipeline, ranchers, American natives, farmers and environmentalists were fighting to block approvals. President Trump simply overruled the regulatory process and denied the rights of the little guys fighting to protect their water sources. 

Only an unwise or extremely arrogant person would risk up to $7.5 billion dollars hoping for the now-departed president in the White House to win a second term. Even if Trump had won, his reliability was fickle as B.C. and Eastern Canada could attest to. They dealt constantly with high and ever-changing tariffs on Canadian steel, aluminum and forestry products.  

“The U.S. should respect us by at least talking to us before making a final decision”, whined Kenney. “It’s not good faith that they made this decision without our input.” That’s quite rich from a man who has shown his electorate so little respect. 

How does respect factor into Kenny’s unilateral decisions to allow open pit mining in the Rockies, cancel doctor reimbursement agreements, close or re-purpose 175 Alberta provincial parks, strip the teacher pension funds and move it under AIMCo control, an investment agency beholden to your government? 

The federal government’s investment in the Transmountain pipeline (TMX) was in sharp contrast to Kenney’s impulsive and ill-conceived investment in Keystone. TMX, because of regulatory hurdles, was unattractive to investors, but critically important for Canada and the oilsands. This investment by the federal government allowed the project to be saved because it could better steward the regulatory and legal challenges than could private investors. The process was painful and expensive, but today TMX’s completion is all but guaranteed, and many private sector investors are already making overtures to purchase it from the government. 

Hastings-Simon says there are good and bad government investments. Good government investments are in industries of the future (e.g., green energy) because corporations don’t think long term; investments where governments are better able to manage the risks (e.g., TMX); or investment in public benefits that can’t be delivered by investors (e.g., equitable health care). 

Kenney said President Biden’s decision was a “gut punch and Alberta taxpayers are on the hook for about $1 billion”.

It wasn’t a gut punch. Biden’s platform was very clear from the outset, as was common sense. Investment in a foreign country is risky—the Alberta government had no power to help ensure Keystone’s successful completion. 

Kenny bills himself as the modern-day Peter Lougheed—the 1970s premier responsible for Alberta’s turn in fortunes. Whereas, Kenney is actually a reincarnation of the 1980s premier, Don Getty, who invested taxpayer dollars to aid and abet specific pals in the oil patch and left behind a financial mess upon his departure. 

Schimke was V.P. Finance & Admin. with the Alberta Special Waste Management Corporation when the Getty government signed a risk-free, 15 per cent guaranteed return on investment deal to treat hazardous waste Bow Valley Industries Inc., controlled by the Seaman brothers, close personal friends and financial supporters of Getty.

 

Brenda Schimke

ECA Review

About the author

Brenda Schimke

Schimke is a Graduate with Distinction from the University of Alberta with a BCom degree. She has lived and worked in Alberta, BC and Ontario.