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Shelving of proposed Frontier mine shows Canada is in need of a political reckoning – National Post

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OTTAWA — Canada appeared in need of a political reckoning following the shelving of a proposed $20-billion oilsands mine, which has laid bare deep divisions in the country between fossil fuel development and concerns about climate change.

Vancouver-based Teck Resources announced late on Sunday it would not be proceeding with its Frontier oilsands mine, just days before cabinet was set to make a final decision on the project.

The decision would have forced Prime Minister Justin Trudeau’s government to confront long-held claims that its ambitious climate targets would not come at the expense of natural resource development. But widespread demonstrations across Canada, in which protestors have blockaded rail lines in opposition to a separate natural gas project in B.C., seemed to challenge that mantra in recent weeks. On Sunday, the Frontier decision then further solidified political tensions that have been festering for years.

Industry groups, political parties, and other organizations called on policymakers to make amends on Monday, warning Canada is at risk of losing its authority to complete nation-building projects in the absence of structural reform.

In a statement, the Canadian Chamber of Commerce said the decision by Teck was not tied to specific shortcomings with the project application.

“Instead, the uncertainty stemmed from pressures that were beyond the scope of Teck’s project and ultimately beyond the scope of our regulatory system,” it said.

“Canada needs to decide whether we wish to have a growing resource sector. If so, we must establish a consensus on how to get major projects, regardless of sector, built in this country.”

Many observers warn that Canada’s tangled regulatory regime has already caused foreign investors to turn their backs on the country, particularly after a decades-long failure to build major pipelines has continued to push down prices for Canadian crude oil.

“They just look at Canada now as hostile towards any oil and gas development as well as other major infrastructure projects, which could include mining,” said Jack Mintz, fellow at the University of Calgary.

Teck first proposed Frontier in 2011. The project would have produced up to 260,000 barrels per day, or roughly eight per cent of current total oilsands production.

Canada needs to decide whether we wish to have a growing resource sector

Separately, protests have sprung up across the country in opposition to the Coastal GasLink project, a natural gas pipeline that would cut through northern B.C. from Alberta. All elected Indigenous chiefs support the development, but a handful of Wet’suwet’en hereditary chiefs are vehemently opposed.

Speaking to investors on Monday, Teck chief executive Don Lindsay said it had become “increasingly clear that there is no constructive path forward” for the mine, as police forces and protestors remained locked in an impasse.

“The project has landed squarely at the nexus of a much broader national discussion on energy development, indigenous reconciliation, and of course climate change,” Lindsay said.

Alberta Premier Jason Kenney blamed the Teck decision on a “general atmosphere of lawlessness” that has prevailed as the blockades stretch on. He also blamed the Trudeau government for what he called a tardiness to call for the blockades to come down — a decision that some observers applauded, saying immediate intervention would deepen tensions.

“This should have been a straightforward and automatic approval, after it went through nine years of exhaustive environmental review, according to the world’s most rigorous standards,” he said.

Angst over the blockades, and over Teck’s surprising decision on Sunday, points back to deep and complicated disputes over Indigenous land claims that have plagued federal governments for decades, often snarling major project approvals.

The project has landed squarely at the nexus of a much broader national discussion

In 2018 the Liberal government introduced the Impact Assessment Act, through Bill C-69, which it claims will go some distance toward sorting out regulatory uncertainties. The new legislation came into force this summer.

Federal Conservative leader Andrew Scheer similarly blamed the Liberal government for the Teck decision.

“When push comes to shove, when the blockades go up, when the illegal blockades go up, and people break the law, the government will not have their back and they will be on their own.

Ontario police were still clearing a blockade near Bellville, Ont., as the National Post went to press on Monday, after Trudeau deemed the protests “unacceptable” days before. Police had made 10 arrests.

Simon Dyer, executive director of the Pembina Institute, said the decision by Teck “lays bare the need for provincial and federal governments to align on climate policy,” as protests threaten to snag future developments in the absence of clear targets and regulatory policies.

“Canada needs a clear carbon budget so industry, provinces and the investment community can operate with clarity and certainty” toward meeting their climate targets, Dyer said.

Ron Wallace, former interim chairman of the National Energy Board and member of the Canada West Foundation, said reviving the project would likely require Teck to repeat major parts of the regulatory process before it could move ahead.

“This would not be a rubber stamp,” Wallace said. “The process for reapplying would be fairly complicated.”

Frontier is just one of roughly 70 major projects that will need to be approved under federal regulatory regimes in coming years, according to a public registry. Those developments include natural gas pipelines, hydroelectric lines, iron mines, port expansions and a number of other proposed projects.

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U.S. stock futures rise following Friday's omicron-sparked selloff – MarketWatch

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U.S. stock futures rose late Sunday, following a steep selloff Friday sparked by fears of the global economic impact of a worrisome new strain of COVID-19.

Dow Jones Industrial Average futures
YM00,
+0.70%

gained about 230 points, or 0.7%, as of 9 p.m. Eastern. S&P 500 futures
ES00,
+0.92%

and Nasdaq-100 futures
NQ00,
+1.14%

also showed solid gains.

Crude oil futures also rebounded Sunday from a Friday plunge, with benchmark U.S. crude
CLF22,
+5.24%

and Brent crude
BRNF22,
+4.70%
,
the international benchmark, jumping roughly 4% higher.

On Friday, Wall Street suffered its worst day in more than a year amid growing concerns over the new omicron variant of COVID-19. The World Health Organization’s technical advisory group on Friday declared it a “variant of concern,” and a number of countries imposed flight bans from countries in southern Africa, where the variant was first discovered.

Little is known about omicron, but investors Friday braced for bad news.

Read: U.S. health officials urge caution, but not panic, over omicron variant

In a holiday-shortened session, the Dow Jones Industrial Average
DJIA,
-2.53%

slumped 905.04 points, or 2.5%, to 34,899.34, with the index logging its worst daily drop since Oct. 28, 2020, according to FactSet data. The S&P 500 
SPX,
-2.27%

 fell 106.84 points, or 2.3%, to 4,594.62, and the Nasdaq Composite Index
COMP,
-2.23%

 sank 353.57 points, or 2.2%, to 15,491.66.

“The pandemic and COVID variants remain one of the biggest risks to markets, and are likely to continue to inject volatility over the next year(s),” Keith Lerner, co-chief investment officer and chief market strategist at Truist Advisory Services, wrote in a Friday note. “It’s hard to say at this point how lasting or impactful this latest variant will be for markets.”

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Canada to Tap Maple Syrup Reserves to Combat Supply Crisis – TMZ

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Canadians to get biggest drop in gasoline prices since 2009 over COVID variant fears – Yahoo Canada Finance

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Canadians should experience the fastest drop in gasoline prices in nearly 13 years on Sunday as fears about a virulent new COVID-19 variant are expected to provide a break of 11 cents per litre at the pumps.

Dan McTeague, president of Canadians for Affordable Energy, said the national average price could drop to about $1.32 per litre but begin to rise again midweek.

“(Sunday) represents the single largest decrease at the pumps we’ve seen going back to 2009,” he said in an interview.

Global crude oil prices plunged Friday over fears about a new COVID-19 variant called Omicron that prompted Canada to ban entry for foreign nationals who travelled through southern Africa.

The January crude oil contract fell 13.1 per cent or US$10.24 on Friday and currently stands at US$68.15 per barrel.

The decrease came as U.S. stock markets closed early Friday because of the Thanksgiving holiday.

“Sunday and Monday are going to be the best days for Canadians to fill up, including British Columbia,” McTeague said

Even residents of flood-ravaged B.C. will save on the province’s high gasoline prices despite facing rationing because severe flooding has shut both the Trans Mountain pipeline and the province’s lone refinery.

Drivers of non-essential vehicles can only purchase up to 30 litres per visit to a gas station in the Lower Mainland, Sunshine Coast, Sea to Sky area, Gulf Islands and Vancouver Island.

East Coast residents won’t reap the immediate benefits of Sunday’s price drop because its regulated regional system averages price movements. That provides price predictability but blunts price discounts.

Despite the upcoming decrease, national gasoline prices have surged nearly 43 per cent in the past year as the reopening of the global economy from pandemic lockdowns prompted a recovery in crude prices.

McTeague suggested Canadians shouldn’t get too comfortable with the energy savings. He said prices are expectd to increase as OPEC and its allies, who are meeting on Monday, will likely refuse to increase production any further. Energy traders realize that Friday’s decrease was overdone and “flies in the face of fundamentals,” he added.

“My sense is that the decreases that we saw were a little exaggerated and overbought, and for that reason I think we might see a little bit more balance come back to the markets and fundamentals by Wednesday,” McTeague said.

“Unless there’s further unsettling news of greater and further lockdowns, I would expect that oil prices are probably going to recover US$3 to US$4 a barrel by Monday or Tuesday, which means by Wednesday or Thursday we could be looking at increases in the order of four or five cents a litre.”

McTeague said some gasoline savings will continue for a couple of weeks, but he foresees crude climbing back to about US$90 a barrel, which would translate into prices in Canada exceeding $1.50 per litre.

Impending carbon tax increases will further boost prices.

A tax of 2.5 cents per litre, including HST, will take effect on April 1, 2022. It will be followed in December by the clear fuel standard that will add another 18.1 cents per litre including HST, said McTeague.

Adding to the inflation pressure is the Canadian dollar which is less valuable than when it was at par the last time crude prices were around US$80. That reduces the purchasing power for all kinds of products, including energy and food.

The Canadian Automobile Association said that as of early Saturday morning, Manitoba had the lowest average pump price of $1.35/L, followed closely by Alberta at $1.377, while Newfoundland and Labrador was the highest at $1.583 with British Columbia at $1.558.

This report by The Canadian Press was first published Nov. 27, 2021.

Ross Marowits, The Canadian Press

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