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The demise of the Energy East pipeline has amped up the political rhetoric, not only in Ottawa but in provincial capitals and even cities like Montreal, but lost in this discussion seems to be some actual economics that need to be considered.  And while some people will be quick to point that TransCanada themselves blamed the National Energy Board for "substantial uncertainty around the scope, timing and cost associated with the regulatory review of the Projects," it has tended to act more for confirmation bias than it has to look at the broader picture of what the landscape is when it comes to the transmission of crude in this country.

But where the rhetoric has me questioning is less with the kind of Trudeau-bashing that Alberta politics has subsisted on since the early 1980s (now extended from father to son), but rather the fact that the demands that these pipelines be not only approved but championed by the government seem to point to a lack of confidence in the power of the free market, which you would ordinarily think that the Conservatives would be invested in.  Instead, we see populist pandering and protectionist language being used to demand approvals for a project whose economic case is no longer a certainty.

The language of "energy security" and ensuring that Eastern refineries get Western crude is somewhat novel economically speaking because Canada is a big country, and it's expensive to ship things west-to-east, most especially with pipelines, when the markets have tended to be north-south.  Volatility in world oil prices has created tensions with that east-west dynamic and the price differential in the past, which is why the National Energy Program came to be in 1980 to try and encourage that energy security while the imported crude coming into Eastern ports was expensive.  That a global recession hit later that year made a politically difficult situation worse for the federal government, and the conflation of the two created a mythology in Alberta about the NEP and Pierre Elliot Trudeau personally.

Fast forward to the energy security language of today, and how creepy parallels are starting to emerge, but from the other end of the political spectrum.  Indeed, energy economist Andrew Leach remarked over Twitter on Monday "Honestly, the idea that we should force oil self-sufficiency was the exclusive property of the radical left and the NEP until about 2013."  After all, it would normally be the NDP and Elizabeth May who would ordinarily demand that any refining be done in Canada for "value-added jobs."  But these are the days when populist rhetoric defies the traditional left-right labels.

But here's the thing about the economics they're fairly immutable, and even if Energy East were to have been built, there is no actual guarantee that those refineries in the East would actually use Canadian oil from the west rather than continuing to import cheaper, lighter crude from the United States and overseas.  Why?  In part because of the physical infrastructure of those refineries, which aren't currently equipped to handle the heavy crude coming from the west.  And you know which refineries are?  Those on the Gulf Coast, where Keystone XL is headed to.

Unless those Eastern refineries get expanded to handle anything more than small amounts of heavy crude from the west, the likely outcome would be heavy crude shipped through the Energy East pipeline would flow directly to ships in the port of Saint John, which would then head for the refineries in the Gulf Coast in essence, a more expensive version of Keystone XL, where you're paying an added $10-12 toll for the pipeline plus another $3 or so for the ship.  And cheaper, lighter crude continues to be imported from those "problematic" countries that the Conservatives, both in Ottawa and in Alberta, continue to decry.

In fact, the only way that Energy East makes sufficient economic sense is if there are no other options for western crude to flow either to the West Coast or south to the Gulf Coast, and a high enough oil price to absorb the cost of the tolls.  But with other pipelines now approved, both west and south, and with oil prices half of what they were when Energy East was first proposed, that economic case has largely evaporated.  Add to that, there is a genuine issue of capacity.  Just because you have more pipelines, it doesn't mean you necessarily have more options for markets.  Why?  Because pipelines running half-full cost twice as much to operate.  Again, these are the economic facts in play.

And so, I go back to the fact that you would think that a party that purports to be about free-market conservatism would take these factors into account before they resort to the kinds of protectionist rhetoric that we've been seeing, whether it's to deploy the concern trolling language of "dictator oil" that was popularized by Ezra Levant's Ethical Oil that doesn't actually make the economic case just the "feel good" case for forcing eastern markets to take expensive western crude, or whether it's using that protectionist language around jobs for Eastern Canadian refineries as a shield for those refinery owners to try and limit exports for their own gain.  How does any of this actually reflect the free market?

One would think that if there was an actual economic case for a supposed "nation-building project" like Energy East, that it would happen without requiring a government to bend over backward and override the independent regulators (as the Conservatives gave themselves the power to do while they were in power), or to try and bully projects through without due process or sufficient consultation (which the courts chastised them over with projects like Northern Gateway).  But if you're relying on populist discourse to force a project through that isn't actually economically viable, then where is the party of the free market?  These are the attitudes that Andrew Scheer has entrenched in the party, and the drift away from their roots continues apace.

The views, opinions and positions expressed by columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of our publication.


A minor shift is occurring on the Quebec political scene that could have major repercussions for the remaining parties.  Quebec Solidaire and Option Nationale, a small, radical separatist party, have announced their merger.  The move needs to be ratified by the 17,000 QS members and by the 2,000 ON members, but most believe it will go through.

This means that there will be one less party listed on the ballot in the next Quebec General election, set for October 2018.  The political rationale was explained at length by Quebec Solidaire spokesperson Gabriel-Nadeau Dubois and by Option Nationale's leader Sol Zanetti, complete with old canards about the illegitimacy of Canada's constitution and the stolen 1995 referendum, the two have said much less about the strategic and tactical rationale behind the move: displace the Parti Quebecois as the leading electoral force of Quebec sovereignists, separatists and nationalists.

Option Nationale was founded by former MNA Jean-Martin Aussant in 2011, after he left the PQ for not being forward enough towards the creation of an independent Quebec.  For a while, it looked like ON was going to take off.  Aussant, an articulate speaker, was very critical of his old party, to a point where Lisette Lapointe, wife of former Quebec Premier Jacques Parizeau, acquired a membership card from the party.  Despite disappointing results during the 2012 election, with less than 2% of the vote, Option Nationale was moving forward. Jacques Parizeau himself spoke at ON's March 2013 Convention, chastising the PQ for its timidity.

But not even four months later, Aussant was resigning and moving to England.  Despite electing Sol Zanetti to replace him and to compete in the 2014 election, the wind had been taking out of ON's sails.  With the departure of the founder of the party, ON was simply out of breath.  Its latest electoral performance, in last Monday's Louis-Hébert byelection, saw Option Nationale finish ninth out of ten candidates, with a paltry 0.3%.  At this point, there was no hope for a better outcome than a merger with Quebec Solidaire.  And it looks like Zanetti will be given a good seat for his efforts.

The merger agreement stipulates that the name "Québec Solidaire" will be retained, as will the essence of the program and the structure of the party.  Yet, despite its size, ON was able to negotiate a major change: QS has agreed to amend section 1 of its political program so that the Constituent Assembly that would be created as a result of the election of a QS government would now have as its main objective the adoption of a constitution for an independent Quebec.  Previously, this constituent assembly could have resulted in a constitution of a Quebec under whichever constitutional status the assembled delegates would have seen fit.

This is another step towards the radicalization of QS as a separatist party.  There is now a firm commitment to achieve Quebec independence in the very first Solidaire mandate.  This is in sharp contrast with the PQ's Jean-François Lisée's promise not to hold a referendum in his first mandate.

Last May, QS' members unequivocally rejected the possibility of an alliance with the Parti Québécois as part of a wider convergence of sovereigntist forces.  The QS membership expressed itself loudly about their mistrust of the Parti Québécois, notably calling them racists for their identity political plays.  They indicated in all sorts of ways that the Parti Québécois was no longer the vehicle of Quebec's  collective aspirations, leaving Lisée red-faced for being suckered into attempting a rapprochement with QS.  The merger with ON consolidates the Solidaires' attempt to wedge out the PQ.

Mathematically, the meagre points from ON might not boost QS's electoral prospects.  But the symbolisim is strong and the PQ can't be happy about this, considering ON was born out of its ranks.  In fact, if anything, Eric Grenier explains that the PQ could have won two more seats in 2014 with the help of Option Nationale's voters and five more in 2012.

Trying to outflank the PQ on the sovereignty front is not without risk for QS.  A lot of their voting base, especially in Montreal, would actually vote "No" in a referendum.  Now that QS can be described as first and foremost a separatist party, it could push away some of those voters, especially the anglophones and allophones.  In the past, the Quebec Liberals were the big tent party for federalist voters from left and right.  But the Couillard Liberals are quite unpopular and many have simply written them off for the next election.

This combination is exactly what the reborn Quebec NDP is counting on.  Still leaderless, the NDP ran former MP Denis Blanchette in the Louis-Hébert by-election.  Blanchette finished 7th, behind the 4 big parties and also behind the Conservatives and the Greens.  Still, the NDP got 5 times more votes than the Option Nationale candidate.  Many QS members are actually upset to see New Democrats back on the provincial scene.  Blanchette was the first New Democrat to run under the party's banner in 23 years.

QS' strategists are hoping that the PQ pool of voters they could gain is bigger than the number of what they see as "radical federalists" who would endanger their "projet de société" because of a misplaced loyalty to a country that has failed to deliver on the socialist dream.

The views, opinions and positions expressed by columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of our publication.