The big news yesterday was that oil and gas company Encana decided to decamp their headquarters and head to the US under a new name to try and attract more investors there, and Jason Kenney and his ministers freaked out. They railed that this was Trudeau’s fault – despite Encana’s CEO saying otherwise, and despite the fact that there are to be no job losses in Alberta or loss of existing investments – and Kenney upped his demands on Trudeau (including the ludicrous demand that Trudeau fire Catherine McKenna as environment minister). And while the Trudeau blaming gets increasingly shrill and incoherent, there are a few things to remember – that Encana’s stock price has hewed pretty closely to the price of oil, that it lost more value under Harper than it did Trudeau, and that even bank analysts are mystified by the move. Perhaps Kenney’s blame is misplaced – imagine that.
Re: Encana, on the products they produce most in Canada, they have realized prices 17% above comparable products in the US for liquids, 4% below their US average for gas. They also have firm pipeline capacity for their expected growth in Canada. pic.twitter.com/eXHjMGpogX
— Andrew Leach (@andrew_leach) October 31, 2019
I made you all a fun graph. I hadn't expected this to be quite this stark, but there you have it… #encana pic.twitter.com/NCoHJUGW21
— Andrew Leach (@andrew_leach) October 31, 2019
https://twitter.com/kevinmilligan/status/1189992947615289345
Quick calc (on my phone, so very approximate numbers): Encana shares lost an average of around 15% per year during the time Stephen Harper was in gov't, and about 6% per year during Trudeau's time in office.
— Andrew Leach (@andrew_leach) October 31, 2019
Scorcher on @encana from @the_Jeff_Jones. Yeeouch, that graph… https://t.co/g87abizW26 pic.twitter.com/5arEq3Umw5
— Andrew Leach (@andrew_leach) November 1, 2019
Also CIBC, paraphrased: Rebranding isn't gonna help, either. pic.twitter.com/NthqGPG1hu
— Carrie Tait (@CarrieTait) October 31, 2019
There have also been a number of voices making the absurd comparison that governments are quick to help companies like Bombardier and SNC-Lavalin but won’t offer it to oil companies – which ignores that the Harper government also helped those same kinds of companies, while Trudeau bought a pipeline in order to de-risk it and ensure that it gets completed, not to mention that other companies usually asking for loan guarantees and aren’t reliant on oil or commodity prices. There is a lot of false comparison going on in order to nurse this sense of grievance, because that’s what this is really all about.
Meanwhile, here is some additional context on the economic situation in Alberta and Saskatchewan that we shouldn’t overlook as part of this conversation.
Lots of reactions to this. My takes:
1) No, we`re not facing a banking crisis.
2) SK problems started when potash prices fell.
3) AB problems started when oil prices fell.
4) Blaming Trudeau for the fall in oil and in potash prices puts you in the crazy *and* stupid category. https://t.co/bsFlEhAxZz— Stephen Gordon (@stephenfgordon) October 31, 2019
I mean, yes, AB and SK are facing serious problems, and environmental activists would do well to remember that these are real people whose livelihoods are being affected, not just some abstract Big Oil from outer space.
But blaming Trudeau is also unhelpful.
— Stephen Gordon (@stephenfgordon) October 31, 2019