Investors are slowly showing restored confidence. And there are plenty of other positive economic and social signs to be found
By Brett Wilson
Considering Canadian pipeline politics over the past year, a thought struck: If the people who built the trans-Canada railway in the late 1800s had operated with the same level of artifice and inaction (i.e. incompetence) that’s been shown on the pipeline file, the tracks would have stopped well short of Thunder Bay, Ont.
Our federal government’s management of policy regarding expanding pipeline infrastructure has been at best dismal. And the latest example, the proposed project to extend and twin the existing Trans Mountain pipeline, shows just how dismal.
The government has essentially allowed 36 million Canadians to be held hostage by several obstructionist B.C. politicians. Despite thoughtful and very complete federal regulatory approvals for the project, members of the Green Party have joined the minority New Democratic Party government to oppose the pipeline.
True, rational and constructive debate is foundational for a democracy. But so is respect for the rule of law. There’s a hefty price to pay for letting a small number of politicians hold up the rest of Canada and now we’re paying it.
Having finally summoned the will to take on the pipeline opponents, the government has announced the purchase of the Trans Mountain assets for $4.5 billion. This decision wouldn’t have been my Plan A, but I’m comfortable with it. After Kinder Morgan invested $1.1 billion to get this far in the flawed Canadian approvals process, the valuation seems fair.
This investment of taxpayer dollars (and, yes, buying an asset is an investment) may even make one or two billion dollars on the flip once the project is de-risked or completed. Best of all, we now have the opportunity to get going on project construction, along with (we can reasonably assume) the political will to no longer tolerate the unlawful (and unethical) obstructionism that has so far ruled the day.
That said, we can’t keep buying assets from companies that aren’t able to complete capital projects because of government inaction. Canada needs a sustainable pipeline strategy.
ATCO CEO Nancy Southern proposes a series of utility corridors that would provide long-term approvals for energy transmission and infrastructure built within clear, contained and pre-regulated rights-of-way. Condensing projects within such corridors would give proponents greater certainty, signal to investors that the inmates are no longer running the asylum, and show that Canada is once again a good place for capital investment.
The day following Canada’s Trans Mountain purchase announcement, PETRONAS, the Malaysian state-owned energy company, bought a 25 per cent stake in the LNG Canada project in Kitimat, B.C. That’s a significant signal, in my view, of investors’ slowly restoring confidence in Canada’s business climate.
The Trans Mountain deal may not have been exactly what anyone wanted but it’s reason to celebrate. Things are looking up, Calgary, and not just on pipeline matters.
Also in the past few weeks, we’ve heard the good news that arena negotiations may have reconvened. Many of you know that I’m an avid supporter of a new arena. Yes, I’m part owner of the Nashville Predators, but no one loves Calgary more than I do. If we want to continue to be a top-tier destination and maintain the residual benefits (and there are many) that come with a professional sports franchise, a new arena is critical.
With fresh forward-looking leadership at the table – absent the divisive rhetoric of Mayor Naheed Nenshi – my hope is a new downtown arena will soon be a reality.
And one more reason for optimism: plans for a new and much larger convention centre at Stampede Park appear to be greatly advanced – soon providing another critical piece of infrastructure essential for any city with world-class ambitions like Calgary.
And, after decades of fumbling, we have a deal on a platform for a contemporary art gallery.
With all this positive momentum in the air, my happy switch is fully in the on position. Despite lingering challenges with anti-business policies at all three levels of government, I am a bull on energy and on Calgary.
Overall, I sense a returning optimism, which is the best news of all.
My partners and I are now in the final stages of designing a new multimillion-dollar rooftop patio for one of my restaurants. Capital is mobile and many investors have been sitting on their hands waiting for a signal that the time in right to reinvest heavily in Calgary.
With all the positive momentum in the city, it would appear that time may – almost – be here.
Brett Wilson is a Calgary entrepreneur, investor and philanthropist.
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