The Ben Mulroney Show - Canada's infrastructure plans -- no pipelines on the list!

Episode Date: September 11, 2025

- Jason Kenney/Former Alberta Premier - Eric Kam/TMU Economist   If you enjoyed the podcast, tell a friend! For more of the Ben Mulroney Show, subscribe to the podcast! ⁠⁠⁠⁠⁠⁠https://link.chtbl.com/bms⁠⁠⁠⁠⁠⁠ Also, on youtube -- ⁠⁠⁠⁠⁠⁠https://www.youtube.com/@BenMulroneyShow⁠⁠⁠⁠⁠⁠ Follow Ben on Twitter/X at https://x.com/BenMulroney Insta: ⁠@benmulroneyshow⁠ Twitter: ⁠@benmulroneyshow⁠ TikTok: ⁠@benmulroneyshow⁠ Enjoy Learn more about your ad choices. Visit megaphone.fm/adchoices

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We're talking pipelines. And Mark Carney, our prime minister, is scheduled to speak at 10.15 a.m. Eastern. And if there's anything germane to the conversation, we will try to pull that into this segment. But yesterday, let's go back to last week when it was leaked to the Globe and Mail a list of just over 30 projects of national interest that were supposedly on Mark Carney and the liberal government's list of projects that we were going to get shovels in the ground and boots on the ground and people put to work to build this country in a way that we've been derelict in for 10 years. And yesterday it was announced that there is a list, we're told a partial list, pipelines are not on it. Premier Daniel Smith of Alberta said Carney's list with no pipeline on it is not the final list. We have been assured there are pathways to get projects on the list as they become ready to be on the list.

So to get a sense of where we are today, we're joined by former Alberta Premier Jason Kenney. And Mr. Kenny, thanks so much for joining us on the Ben Mulroney show. good morning ben um so look i i i'm entirely willing to believe that this first tranche is not the final tranche that's fine but i'm trying to square it sir with the promise of building the canadian economy at lightning speed at speeds that we have not seen since the second world war i i don't know how tranches fit with lightning speed exactly i i think you're right to be but skeptical here I mean, we've been hearing sky-high expectations about unleashing the Canadian economy with the fastest growing in the G7 and all of these major projects that we're going to go forward. In fact, this seems like a really tepid, cautious, Ottawa-style process.

And, you know, Ben, I do a lot of work with major companies now and the resource and other Canadian industry sectors. What they're saying over and over again is please don't run this. like Ottawa knows best, picking and choosing which projects should proceed, just deregulate and let the market decide. You know, this was part of the problem with the Trudeau approach when he said there was no, quote, no business case for exporting LNG. Well, why don't you let the businesses decide that? If there are companies willing to risk shareholder money on billions of dollars for a major project, they're the ones who decide whether there's a business case or not. So I really don't understand the Prime Minister Carney's approach. You know what? I want him to succeed. Canada needs

to turn this lagging economy around, but proponents are not going to come forward with potentially $10,20 billion on an oil pipeline to the West Coast, as long as a lot of these policies like the emissions cap remain in place. Right. So if I'm understanding, when Prime Minister Carney told Danielle Smith that a private developer has to step forward so that a pipeline can advance. And so far no company has shown interest. What I'm gleaning from what you just said is, well, of course, no one's coming forth yet because you still have all of these resource industry killing pieces of legislation on the books. It is reported that the CEO of Suncor, one of the largest oil companies, Rich Kruger, said to the prime minister at a roundtable in

Calgary a few weeks ago, that he said, we could build a shiny new pipeline, but as long as you have the emissions cap in place and other policies, we're never going to be producing the oil to fill it. So I think that, you know, Ottawa doesn't seem to understand the complexity, let's talk about oil pipelines, or the oil economics. We've got these major producers. They're producing 5 million barrels a day, about 4 million of that out of the oil stands in northern Alberta, for them to, let's say we get another pipeline built that could per ship a million barrels a day more, well, they can't just flick a switch.

They've got to invest in new greenfield development on leases that they hold. That means years of capital planning, of hiring new people, buying new equipment, of supply chain challenges. It means redirecting capital from dividends or other purposes in their companies, finances like these are complex multi-year decisions that they cannot make as long as

there's an emissions cap in place for example so that's why uh the idea of just a list of linear infrastructure like pipeline simply isn't going to work yeah so a couple of places i want to go with this conversation i want to talk about the knock-on effect of a world where a pipeline doesn't get built and i'm here in manitoba i've been in winnipeg for three days and um why Bob Canoe, the Premier, is very bullish on one of these projects of national importance being a sort of reinvigoration of the Deepwater Port at Churchill. And I've got to wonder if we don't have the natural resources that we're extracting from places like Alberta, I don't know that there is a business case to build a deepwater port in the way that Wab Canoe wants. Yeah, again, by the way, let me just say I really appreciate the positive and constructive approach of Premier Canoe is taking time. towards these issues, and I've always hoped that the Port of Churchill, Hudson's Bay,

would be an opportunity for egress, for shipments of resources. I must tell you, I'm a little skeptical because all this stuff about people seem to think, oh, climate change is going to open up the Arctic for shipment for several months or year-round. I, you know, most people will tell you that the polar ice cap in the winter is actually thickening. And so I'm a little skeptical that that is going to work any time in our lifetime. But let's pursue it. And if private sector proponents come forward, that's great. But again, any pipeline that takes oil to any port, whether it's down to the U.S. Gulf

Coast or Hudson's Bay or Energy East or the West Coast, is going to require a signal for upstream producers to spend billions of dollars of capital to produce more. And right now, all the policy signals are against that. Let's finish our conversation with the idea of maintaining order in the liberal caucus. A lot of the people that are on his front benches are from the previous government. And if you take Mark Carney at his word and there's no reason not to, he is not the same kind of liberal leader as his predecessor, but he's got baggage that comes from 10 years of the other guys. So he's got competing interests in that caucus. Now, you were part of a very large caucus under Stephen Harper, somebody I had the pleasure of spending time with last night in conversation.

Talk to me about competing interests inside the cabinet room and inside a caucus. What sort of pressures is he dealing with those who are true believers in the Green Revolution that has yet to arrive and those who believe we have to open up the economy by responsibly developing our natural resources? Yeah, I think that's a really big question. And quite frankly, Ben, I have a hunch that Mark Carney, as governor of the banks of Canada and England, he was the boss. And there were none of his subordinates who could block him from a policy decision.

He had to build consensus, ideally. But that's a very hierarchical organization. And that would have been similar to his experience in the private sector as well. It's a totally different kettle of fish when you are leading a caucus. in the cabinet. And at the end of the day, if they don't support a particular policy or initiative, you have a hell of a hard time getting it through. Your dad was an absolute genius at keeping caucus on side, motivating them, even on the toughest issues with the GST was super popular. He got caucus to vote for it because he persuaded them. It was in the country's

best interest. But, Mr. Kenny, if I can jump in for just one moment, one could argue that Mark, without Mark Carney, this liberal party might be in second, third, or possibly fourth place in the House of Commons. In other words, he doesn't owe anybody anything. They owe everything to him. Wouldn't that suggest that he's got complete control here? That is exactly my view. And so I don't understand why, given that, he appointed people like Stephen Kippo and Gregor Robertson to Cabinet,

both of whom called himself socialist, you know, in the case of Mr. Robertson five minutes ago, was in the NDP. And both of whom were rapidly opposed to resource development. I'll tell you, Jean-Cretchen had the benefit of a cabinet of sensible, pragmatic, pro-business liberals who were very aligned on this stuff. I think Mr. Carney may find that he misses that kind of lineup because these people for them, this stuff that the green causes has like a virtually religious dimension. They're not bound to, they're not tending to compromise on these issues. So I think he's going to have a real problem on his hands with

some of his MPs who did not get into cabinet for whom this is their central issue and some of his ministers. I wish him well. Mr. Kenny, thank you so much for being here. You promise me that when that trunch comes out that does unlock the potential of a pipeline, you'll come back to the Ben Mulroney show. 100%. All right. Let's take a deeper dive into the pipeline story and answer the question, why did Canada never nationalize its oil reserves? That's next right here on the Ben Mulroney show. This show is sponsored by BetterHelp.

Let's be honest. We've all shared our problems in some pretty funny places, the group chat, your barber, maybe even a stranger on a plane. And, hey, sometimes that helps. But when it comes to stuff like stress, anxiety, or relationships, it makes a big difference to talk to somebody who's actually trained to help. That's what BetterHelp is all about. They connect you with credentialed professional therapists online. And what makes them stand out is their therapist match commitment.

After a quick questionnaire, BetterHelp does the hard work of finding someone who fits your needs. Most people get it right the first time. But if it's not a match, you can switch counselors anytime at no extra cost. It's flexible, totally online, and you can hit pause whenever you need to. With over 5 million people supported to date globally, BetterHelp is now available in Canada with a network of counselors who have expertise in a wide range of specialties. With a 4.9 out of 5 rating based on over 1.7 million client reviews. BetterHelp makes counseling affordable and convenient, and you can switch counselors at any time for no cost.

Our listeners get 10% off their first month at BetterHelp.com slash Mulrooney. That's better H-E-L-P.com slash Mulroney. As a BMO Eclipse Visa Infinite Cardholder, you don't just earn points. You earn five times the points. On the must-haves like groceries and gas and little extras like takeout and ride share. So you build your points faster. And then you can redeem your points on things like travel and more. And we could all use a vacation.

Apply now and get up to 60,000 points. So many points. For more info, visit bemo.com slash eclipse. Visit us today. Terms and conditions apply. Welcome back to the Ben Mulroney Show. I want to thank you all for joining us. And in our previous segment, we're speaking with former Alberta Premier Jason Kenney

about the state of play in Alberta with the announcement of the first tranche of projects of national importance by the liberal government. And the absence of any mention of a pipeline. I don't think anybody is sounding the alarm that this is the end of those problems. There are many more to come. Perhaps a pipeline will be one of them. But it's really a fight between two sides, one saying, well, you need a business case and nobody from the private sector is stepping up. And the other side saying, well, of course nobody's stepping up because you still have these industry killing pieces of legislation like the emissions cap and the oil tanker ban on the West Coast, making it impossible to square the circle and make it so that these private industries are going to want to risk investor capital. on such a huge project.

So it's a wait-and-see approach. I don't think anybody is saying that the game is over. My one criticism was it feels like this is happening a little slower than we were promised. We were promised lightning speed on a number of files. And to have to wait for another tranche seems anathema to that notion. But now we want to talk about a different aspect of pipelines. and ask, we want to ask ourselves, could we have developed these resources as a nation and perhaps Alberta as a province differently so that that wealth that we generated over the course of decades since the inception of the oil sands? And by the way, anybody who calls it the tar sands is agenda driven because there's no tar there.

We're joined by Dr. Eric Cam economics professor at Toronto Metropolitan University. Doc, welcome to the show. Benedict, how are things in Winnipeg? They are great. Great. I've had a wonderful, wonderful time. Eric, let's talk about sort of a large question. I think I've touched on a number of times today. But what are the economics behind pipelines?

Why aren't there a number of massive natural resource companies stepping up and having their voices heard saying, hey, if this project is offered, we can make it work? You know, I'm glad that we're talking about this because it gave me a chance to do some research into pipelines. as an economist, I think I have it down to three or four. The first one, I think, which is almost obvious, is just the capital intensity and the risk, right? These projects cost tens of billions of dollars, and that's up front. And returns are really long-term and hopefully stable, but only if the project isn't delayed or canceled. And we know in this country, multiple pipelines, Northern Gateway, Energy East have been delayed. And so investors don't like that, right?

We know that investors don't like risk and uncertainty. You have to look at the regulatory and the legal uncertainty, right? The approval processes, especially in Canada, are lengthy, and they take a very long time. And then back to real, just traditional economics, market conditions then have shifted. In the 2000s, early 2000s, production was booming, and new pipelines look very profitable. But now with the energy transition potentially, global oil demand forecasts have already plateaued. So the economic case for building these pipelines just looks a little bit weaker. So if you want the, you know, what I call the 30-second radio blurb, too risky, too expensive, and right now

too political, Ben? Are Canadians or our companies risk-averse knowing that looming over the construction of any new potential pipeline is the specter of the boondoggle, the $23 billion dollar boondoggle that has been Transmountain? Well, yeah, I think that's exactly what's going on. I think, and you have to couple that. You have to marry that with the sort of the environmental, social, and governance pressure, right? The global capital markets and our big banks, right, they're pulling back from fossil fuel infrastructure.

So even if Canadian firms wanted to build, how are they going to go about attracting outside financing at interest rates that they're able to afford, right? And people think, well, can't the government just be the backstop? But as you said, that trans mountain expansion is a prime example. No private company is going to touch that, you know, within 10,000 feet once the cost ballooned and the legal fight mounted. I mean, you're talking about a government that had to step in, right? Costs are now well over about $35 billion from the original seven. And as I'm saying this, you know, Ben, that the financial markets, the credit markets are running as fast as they can from

projects like this. Yeah, yeah, absolutely. Let's switch to a conversation that I know we as a nation had, I got to say about 15 years ago, when people were comparing and contrasting Alberta's development of the resource sector that has huge deposits of oil and Norway. And Norway essentially nationalized their sector and then partnered with the private sector so that a big chunk of those funds would be placed in a sovereign wealth fund, which would just generate capital at an incredible rate. And it's called the government pension fund global. It's now the world's largest.

The amount of money that that fund is sitting on per capita in Norway, I mean, they could hand massive checks to every single Norwegian person walking around today. That's how much money they have in that. And nothing similar, at least to me, has a piece. in Alberta. Now, Alberta can't have a sovereign fund. They're a sub-sovereign government. But talk to me about where those two parallels intersect and where they contrast. And could we build something like this in Canada, a sovereign wealth fund for Alberta? The long answer is no. We can get to that in a second. By the way, full disclosure, my daughter's

moving to Norway in January for a six-month school term. So I'm going to go check this out myself. Again, just doing a little bit of research and what I know, right? What's going on there is that Norway is a unitary state. They have one government calling the shot. Canada, as you know, is federal and provinces have their own natural resources. So you have a lot more characters, Alberta, Saskatchewan, that they want to come in and put in their own constraints to the game, in a sense, skim off their wealth into the national pot, right? So this political fragmentation in Canada, I think, makes the Norwegian style sovereign wealth. fund kind of impossible. Also, just as a note, I'm not an expert in this, but Norway's offshore oil

was very light and cheap to extract, which made it globally competitive. Ours are heavier, what I've been told by experts, higher costs, carbon intensive, and so profits look thinner. And then, of course, we've got to go back to just public sentiment, right? In Norway, there was broad national consensus. Oil belonged to the people of Norway. In Canada, we should be able to do that for anything, but sure as hell not oil, because everybody seems to have a stake in this, and they see Alberta sees this as their treasure, you know, other provinces as their treasure. So why can't Canada do it now? I thought about this last night. I would say three things like I like to make lift. Number one, it's kind of late in the game, right? Oil, as we sit today, is it really a

growth industry anymore with we know global demand has already peaked? Number two, the cost overrun. Hold on. I mean, I'm sure it's peaked in the near term. I don't know enough about the industry to be able to say with confidence that it's not going to boom again in a couple of years. No, but that's right. That's uncertainty. We don't know if it's going to boom. Norway had its boom when the world was dead thirsty for more. Yeah. Are we facing that right now? Is that where our market is right now? Well, again, if you look at things like demand for oil, it's kind of neutral right now. So now you're just betting whether the market's going to go up or it's going to go down. you mentioned what's going on with TMX that's going to scare anybody and then just again you know I hate to come back to political realities but Canada never did the Norway model because of bad timing this fragmented federalism and the fact that we're just it's just more expensive and politically divisive could it be done I think it could have been done but not to sound like Jackie Mason but

today well I think it might be we may have missed that boat on a number of different levels then It's such a shame because, you know, I view this through the eyes of a very simple child as somebody with no domain expertise, but if we had been able to come up with some sort of system that created something like this, the amount of money that would have been generated would have been more than enough to keep everyone happy. The people on the left would have had their social safety net, their environmental pet projects. Alberta would be richer than anyone on the planet. And we would have roads and bridges and airports that would be the envy of the world. world. Like I said, I see that through the eyes of a child. That's just me, but I do appreciate

the conversation today. Eric, thanks so much. Stay healthy, Ben. I dare you to pay attention. I dare you to speak up. I dare you to try to speak up. I dare you to try to. something new. I dare you to challenge what you think you know. I dare you to think differently. I dare you to show up. Paul and Blurview dares to shape the future of disability health care for kids. Together we dare. Donate today at togetherweedare.com.