The Morning Brief – 11.12.20

By Bruce Carson


United States Presidential Election (Part 4)

Potential Effect of a Biden Presidency on Canada

Energy and Climate Change

It was a week ago when The Morning Brief attempted to deal with Energy and Climate Change issues that would affect Canada as a result of the U.S. presidential election. The election result was not clear at that time as Vice President Biden was not declared to be the President-Elect until last Saturday.

While this morning we concentrate on the effect of a Biden presidency on bilateral relations, it is important to note that President Trump continues to challenge the results in the courts and remains in office until noon on January 20, 2021. One of his recent court challenges is interesting in that if it is successful, it could affect the Electoral College vote on December 14.

Trump is seeking to block the certification of the vote by the State of Pennsylvania. He obviously believes that because of its 20 Electoral College votes, this is the state to concentrate on going forward. If he should be successful in blocking certification, it could open a very narrow path which might allow him to remain in the White House.

As we have learned during the last few days, weeks and months nothing is certain in the time of COVID-19, also nothing is certain in the time of Trump as he clings to the presidency.

The three main areas where Canada-U.S. relations with Biden as President-Elect are affected; include energy and climate change, trade and procurement and international relations including multilateralism and relations with China.

On energy and climate change, particularly energy, the main issue is, of course, Biden’s promise made during the latter part of the campaign to cancel the Presidential Permit signed by President Trump to allow the construction of the Keystone XL pipeline.

Last weekend Foreign Affairs Minister Champagne said that dealing with Keystone XL was “at the top of the agenda” and that “Canada is the most reliable energy supplier to the United States.”

Premier Kenney stated in his congratulatory message to President-Elect Biden that the Alberta energy sector is important to the United States. He noted that the U.S. was Alberta’s top trading partner. He added “U.S. energy security is dependent on Alberta as the U.S. largest source of oil imports. Much of the American economy is fueled by Alberta energy. We look forward to working with President-Elect Biden’s transition team and future administration to ensure that this vital economic partnership continues.”

Kenney added on the matter of utmost importance to both countries “Canada and the United States must work closely together to protect lives and livelihoods through COVID-19 and return our economies to growth.”

Premier Kenney and Alberta which has a financial stake in the future of Keystone XL, have not lacked for advice as to how to approach Biden on the subject of Keystone with a view to convincing him that this is a platform promise, he can afford to set aside.

James Rajotte, former Alberta MP, now Alberta’s senior representative in Washington, on Vassy Kapelos’s Power and Politics said he will engage with the Biden transition team, but also with the current administration in Washington. He said as well as dealing with the transition team, there would be outreach to members of congress.

One of the main arguments he will be advancing is that American refineries around the Gulf of Mexico need heavy crude of the kind produced in Alberta. The pipeline is 10% complete with construction taking place on both sides of the border, First Nations are involved in ownership and during the construction phase, 60,000 unionized jobs will be created in the United States at a time when they are most needed.

However, as a number of commentators have pointed out, Canada has this close relationship with President-Elect Biden through Prime Minister Trudeau.

Convincing Biden to change on Keystone XL will require Trudeau to convince Biden that both Canada and Alberta have regimes in place to fight climate change and they will be increasing emission reduction targets under the Paris Accord in the coming days. This was a promise in the recent Speech from the Throne which dealt with both 2030 targets and legislation being put in place that deals with achieving net zero emissions by 2050.

Trudeau can also point to the pan-Canadian carbon tax, something the United States lacks. He can also tell a good story on carbon capture technology, small nuclear reactors and the development of hydrogen as a clean fuel. These are also arguments which as John Ivison points out, could be used by Canada to seek an exemption from a possible American carbon adjustment tax designed to force countries exporting goods to the United States to meet climate and environmental obligations.

Biden has promised to invest $4 trillion over four years on infrastructure, electric vehicles, zero emission public transit and carbon free power. Trudeau may argue that Canada could be a partner in a North American approach to fighting climate change while at the same time providing jobs for Americans through the construction of the pipeline and energy security for the United States.

Kevin Carmichael in an article published two days ago in the Financial Post argues “if Canada wants Keystone XL, it will have to do even more on climate, such as putting a higher price on carbon and the country’s biggest oil companies will have to show they are serious about their own zero emission targets.”

Whether Premier Kenney likes it or not, the road to keeping Keystone XL permit in place runs through Prime Minister Trudeau and his relationship with Biden as well as Trudeau’s ability to convince the president-elect that the issues of 2015, which led to the pipeline’s cancellation, are not valid in 2021.

There are good arguments to be made for Keystone XL as in the creation of good jobs, investment and Indigenous involvement. For President-Elect Biden to consider allowing the pipeline to be built, he has to deal with and resolve a number of competing interests. He has the left wing of his party to satisfy, as well as the moderates. Is there a role in this for Vice President-Elect Harris?

Biden has an economic and jobs crisis caused by COVID-19 that he has to address and Keystone XL would help him there.

There are members of congress and State Governors that would like to see the pipeline built because of the economic benefits.

In all of Biden’s speeches to date, he has held himself out as a unifier and conciliator, both at home and with allies who have been snubbed by Trump and want to believe that they will be treated differently by a Biden administration.

With Trudeau’s congratulatory tweet and early phone call to Biden, one could argue that Canada is already onside with the new administration, but Biden allowing Keystone XL to proceed could add some quick drying cement to this relationship.

Also if Biden is casting about for advice as to how to keep the Democrats with disparate views in the House of Representatives and Senate onside, he might speak with former Prime Minister Mulroney about his time from 1984 to 1993 when transformational policies were put in place and caucus held firm.

To Come

  • For those looking for a distraction The Masters begins today
  • Senior Deputy Governor of the Bank of Canada, Carolyn Wilkins delivers a speech on Exploring Life Post-COVID-19
November 16
  • Both the Senate and House of Commons resume sitting
  • Monthly survey of manufacturing for September to be released
November 18
  • CPI numbers for October to be released
November 20
  • Retail trade numbers for September to be released

The Morning Brief returns on November 18.

– BC