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.
