Oil and Gas Provinces Go Conservative as Canada Goes Liberal

Canada has woken up to another four years of Liberal government, with incumbent Prime Minister Justin Trudeau claiming victory on election night on October 21.

The Conservative Party made gains — even winning the popular vote nationally at 35 percent compared to the Liberals 33 percent — but they failed to overtake the Liberals in seats.

In the oil-sands-rich provinces of Alberta and Saskatchewan, the sentiments of voters were stark: the oil and gas-friendly Conservatives won all but one of the 48 seats between the provinces, with the Liberal Minister for Natural Resources Amarjeet Sohi turfed out of his Edmonton riding.

Excluding British Columbia, the Conservative vote was monolithic in the west: 70 percent and 65 percent of voters in Alberta and Saskatchewan respectively backed the Conservatives, as did 45 percent of Manitobans. British Columbia was in line with the national result.

Opposition to the oil sands and energy-related projects in Alberta and Saskatchewan has been a burning issue in the region, with the Albertan NDP fighting with its British Columbian counterpart over the Trans Mountain Pipeline and the United Conservative Party in Alberta accusing Ottawa of not caring enough about Alberta’s economic prosperity.

Reactions to the Liberal win in Alberta were glum, with local media opining that the oil industry had “a lot on the line,” and calling the result a “kick in the shins” for the province.

For his part, Trudeau insists he is on Alberta and Saskatchewan’s side, saying in his speech that they were an essential part of Canada.

“I’ve heard your frustration and I want to be there to support you,” he said.

His government spent C$4.5 billion on purchasing the Trans Mountain pipeline between Alberta and the Pacific coast in British Columbia in order to sidestep investor opposition and force the expansion project through to support Alberta’s interests.

Indeed, Trudeau’s tenure has so far been partially defined by the dispute over the pipeline (which has been simmering locally, provincially and federally).

The vote is clearly proof his actions aren’t seen as enough: Alberta Premier Jason Kenney was on the campaign trail decrying federal Liberal policy towards pipelines.

“I’d like to focus on separating Justin Trudeau from the Prime Minister’s Office,” he said back in August.

During a parliamentary address on Tuesday, Kenney said, “Everywhere we turn we’re being blocked in, pinned down and even attacked within our own country for what we do to contribute to it.”

Speaking with the media after the address, Kenney spent a lot of time fielding questions around Albertan separatism and western alienation given the spread of votes around the country. He said that if Trudeau didn’t listen to Alberta (despite its lack of Liberal seats) then alienation could continue to grow and “pose a serious threat to national unity.”

Conservative Leader Andrew Scheer was also hitting the hustings on Tuesday, saying to media that the Liberal Government must be stopped from attacking the energy sector and getting in the way of big projects.

“We will do everything we can to get our energy sector back on its feet and make sure all Canadians understand that when Western Canada succeeds, all Canada succeeds,” he said.

The Investing News Network (INN) reached out to the Canadian Association of Petroleum Producers (CAPP) before the election to find out what their priorities for the election were.

The association sidestepped politics, instead focusing on Canadian energy’s role in climate change policy globally: “Canadian energy can fill global market share that would otherwise be filled with energy from countries that have lower environmental and human rights standards.”

In the aftermath of the election, the association again leaned into the climate change message.

“The election of a minority government reflects the diversity of Canadians and the need to work constructively together to achieve our mutual goals. We all agree on the importance of making life affordable for Canadians, enabling results on climate change, and creating prosperity for all,” the association said in a release. 

“CAPP is committed to working with the federal government. A strong oil and natural gas industry can contribute to the government’s mandate and benefit all Canadians by providing affordable energy, prosperity, and creating opportunities for Indigenous communities.”

The official tally for the election is yet to be finalized, but the Liberal Party so far has 157 seats to the Conservative’s 121, meaning the Liberals are in minority and will need the support of other parties to get bills through parliament. The NDP, Green Party and Bloc Quebecois all oppose pipelines.

As some salt in the wound, on the day after the election, Calgary-based Canadian energy company Husky Energy (TSX:HSE,OTC Pink:HUSKF) announced layoffs in a bid to “better align” the company’s workforce and capital.

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Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.