Trudeau sidesteps LNG deal with Germany’s Scholz

By Bruce Lantz

Like most politicians, Canadian Prime Minister Justin Trudeau has a bit of the salesman in him. He just takes it to another level, as German Chancellor Olaf Scholz learned during a recent visit to Canada.

It was a momentous occasion: the first visit by a German head of state to this country. Scholz came to Canada to establish a source for the liquefied natural gas (LNG) that his country sorely needs as its supply from Russia has been sorely reduced in the wake of that nation’s invasion of Ukraine. Germany is also making huge investments in the infrastructure needed to get gas from Norway, the Netherlands and other parts of Europe, and has dropped immediate plans to phase out oil and gas use. Good news for Canada, you say, which has more product than it can possibly use? Of course. It would give this nation an entry point into the European market and perhaps beyond.

Enter Trudeau, the former substitute drama teacher who likes nothing better than to take centre stage and spend billions around the globe (billions better spent at home, by the way) to show the world that Canada is — or can be — or should be — a world leader in just about everything. Never mind the myriad of crises his people face at home: a failing healthcare system, homelessness, out of control inflation . . . the list goes on. After all, solving problems at home doesn’t get the attention and respect of other world leaders, does it?

So here he was, in his home country, afforded the opportunity to welcome a foreign dignitary with news that Canada, a world leader in natural resource production after all, would gladly step up and help out our friends in Germany with their LNG needs, while at the same time generating serious profits for industry, which in turn creates employment and pays considerable taxes.

But no.

Instead, Trudeau sidestepped the LNG supply issue by stating that he doubts there is “a business case” to be made for investment in the East Coast LNG facilities that would be needed for export of that product to Germany and other European countries. Instead, he signed an agreement for the export of hydrogen fuel to Germany, a move that will require spending billions on new facilities including massive offshore wind farms required to send that product overseas. Oh, and of course, they signed another agreement that would see Trudeau’s highly-favoured electric vehicles sent from Canadian factories to that European country as well.

LNG? Not so much. With one eye on Scholz, who travelled all this way for an agreement on LNG, and evidencing his own duplicitous nature, Trudeau did say that the federal government might make it easier for companies to get regulatory approval to transport LNG from other parts of Canada to the East Coast for export “because of the difficulty that Germany is facing”. But the German chancellor did not get what he came for: a source of LNG that would help his desperate nation survive in the near term without depending on Russia for its supply.

Well, that makes sense, doesn’t it? When you have an LNG plant in Saint John, New Brunswick almost ready to ship LNG to Europe, and another two in Nova Scotia at Goldboro and Point Tupper wading through the regulatory process so it could do the same, it would seem to make sense. But not according to our prime minister. Trudeau first says he doubts a business case can be made for East Coast LNG facilities because they’re too far from the gas fields in Western Canada, and then in the next breath says he supports the shipment of said LNG to the east. And then what? What coastal facilities are there to handle the flood of LNG as it arrives? Certainly not the three existing and potential facilities, which are struggling with the regulatory process — the same regulatory processes Trudeau volunteered to waive in order to send LNG eastward via pipelines or other means.

Yes, it is ultimately up to the companies involved to determine if there is a dollar to be made by shipping LNG eastward and then off to Europe. And few in the industry would suggest there aren’t billions to be made from opening up vast and LNG-hungry markets in Europe and elsewhere. After all, corporations thrive on money-making opportunities. But according to Canadian Gas Association president and CEO Timothy Egan, they have had more overtures from European governments and industry than from their own government in Canada. And look at what’s happening on the West Coast, where government did not pose so many regulatory hurdles for those who wished to build LNG facilities there. So why should the East Coast be any different from the West? Only the prime minister knows for sure.

What is baffling to most observers is why these two important Canadian forces — government and the oil and gas industry — continue to be at odds with each other. Surely, they both can see that there would be considerable advantage to working together rather than being at loggerheads all the time. Would it be so difficult for government to sit down with industry and ask what makes sense going forward? It would seem that much more progress could be made if the two worked as a team rather than as isolated entities who each do their own thing without seemingly recognizing the other’s existence.

After all, government should want the taxpaying, employment-generating industry to be successful, and industry should want to see government as an ally rather than an opponent, right? It’s called teamwork. Then, thanks to government-industry co-operation, Canada would achieve the worldwide recognition that Trudeau seems to be seeking.

A win-win, right?