Written by Deborah Yedlin and Brad Parry for the Calgary Herald
There is nothing better to remind Albertans about the importance of staying in Canada than the blockbuster deal announced this week between Halifax-based Emera and Calgary-based ATCO.
When approved by shareholders of both companies, this $14.3-billion transaction creates a national utility with an enterprise value of $72 billion linked from east to west, that will also rank as the 20th largest in North America. While it means greater access to capital and growth opportunities, there is also another important outcome: it creates a Canadian champion in the utility space that has room to grow — not just in North America, but internationally.
These are the types of transactions that need to happen — as we look to fortify our economic sovereignty during a time of geopolitical uncertainty and an unreliable trading partner south of the border.
And one could make the case that announcing this deal before the Alberta referendum taking place on Oct. 19 is no coincidence.
Would Emera be interested in a deal with a company based in Alberta, about to separate from the rest of the country? Unlikely.
The same could be said for the Pacific Link pipeline — which was designated in the national interest on Oct. 1, with the announcement appropriately made in Fort McMurray by Prime Minister Carney and Premier Smith. It’s unlikely dealing with a de facto international border between Alberta and British Columbia would be in the interest of any of the parties involved — including Pembina Pipeline Corporation and the Indigenous communities that also stand to benefit as owners in the project.
Anything that causes transactional friction — and introduces risk premiums at a time when companies are competing for capital, labour and looking for strong rates of return — means the investment goes to another jurisdiction.
And Alberta loses out. The well-paying direct and indirect jobs go elsewhere, instead of lifting the entire economy. All the meetings with investors that take place in major cities around the world, with the objective of bringing capital to a stable jurisdiction, would prove more challenging and result in investment decisions being postponed rather than accelerated. Either way, it’s not good for Calgary or the province.
In this context, it’s important to note the number of federal legislative changes that have taken place, many of them to the benefit of Alberta.
For starters, Alberta was the first province to sign a Memorandum of Understanding with Ottawa, which led to the Pacific Link Pipeline being designated in the national interest and subject to the new provisions contained in Bill C-39, which commits to a one-year approval process. Perhaps more important, and of interest, is the fact that Alberta, because of the capital investment on the horizon encompassing everything from production increases in the oilsands to increased midstream infrastructure, is that the province disproportionately stands to benefit more from the Mega Productivity Deduction compared with other provinces.
While some may still say it’s important to send a message to Ottawa, the actions that have taken place to open the door for investment, including the recent sanctioning of LNG Canada Phase II, have been made in record time. It shouldn’t be lost on anyone that the Cenovus announcement to buy Athabasca Oil Sands flows from both the Pacific Link project moving forward and the regulatory and tax changes that were announced.
In other words, the economic importance of the energy sector — across the value chain and to the country — has landed, irrevocably, in Ottawa.
This is truly generational for Alberta and Canada. It’s generational in the context of what it means for our children, grandchildren and great-grandchildren. If there is a decision on Oct. 19 to move forward with a binding referendum on separation, the promise of a bright future will have been snatched away.
Now is not the time to look inward or nurse grievances that have been meaningfully addressed. At long last, our economic voice is being heard — loud and clear. The changing geopolitical landscape has given us an unprecedented opportunity to be at the international economic table, and not on the menu.
We have what the world needs. It’s time to be builders, and to lead with an eye on the horizon. It’s what the Emera merger with ATCO represents. It’s what the Cenovus acquisition stands for. It’s why LNG Canada Phase II is moving ahead. It’s what is represented by Pacific Link and the Pathways Alliance.
That leaves all of us with one thing to do on Oct. 19 — to vote for the future, not the past.
