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My dear friends in the wild rose province: Deep breaths.
Instead of offering Alberta’s premier-designate time to absorb her party’s shocking majority win, some provincial big wigs – including energy executives, who should know better – have pounced on Rachel Notley, suggesting her victory will spell the end of Canadian energy. The morning after the New Democrats won the election, there were already suggestions the incoming leader must reassure the public that she won’t nationalize the oil and gas industry.
I’m assuming most Albertans aren’t in such a panic – the NDP wouldn’t have won in a landslide otherwise. But there seems to be an underlying fear that the provincial NDP government and its pending royalty review will demolish any hopes of developing energy assets – and by extension, will destroy future deal flow.
What a knee-jerk reaction. Across the country, the NDP may not be cozy with producers of energy from conventional sources, but political parties almost always move to the centre once they are elected. And their reputation for killing deals can just as easily be slapped on their rivals. On this front, let’s not forget that Conservative governments are no pushovers, either.
Saskatchewan Premier Brad Wall is practically a poster boy for fiscal conservatives, but earlier this year he pledged to review his province’s potash royalty and taxation regime. This, of course, comes after he all but begged the Prime Minister to kill the proposed takeover of Potash Corp. of Saskatchewan in 2010. Deal killer, I’d say.
As for Mr. Harper, his former boy wonder Nigel Wright made a name for himself at buyout firm Onex Corp. – yet Mr. Wright was also the point man on the team that crafted the federal plan to ring-fence the oil sands from state-backed foreign buyers. That policy iced energy deals for an entire year – and arguably still does.
Also remember: The current freeze on deal making has nothing to do with the NDP. Even before the Alberta election, energy bankers and chief executives en masse stressed that it was way too tough to do deals in this volatile market.
For the rest of this column, click here: http://www.theglobeandmail.com/report-on-business/streetwise/relax-albertas-ndp-isnt-the-energy-deal-killer-the-market-is/article24381689/%3bjsessionid=Yq5lVSQHHJ54Tl190vyFnTQPpLD5LLSSvNW2B1QxHQLq67QHMnHT!1349010520/?ts=150512093009&ord=1