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Share this Story: Liberals move to Big Oil from Big Oil but there is little relief for oilpatch
Liberals shift focus to Big Oil from Big Banks but there is little relief in oilpatch. Dan Tsubouchi, SAF Group's Dan Tsubouchi, says, "Not for one minute do I believe that Trudeau has shifted away form Big Oil, especially the oilsands." Photo by Jennifer Gauthier/Reuters
Article content CALGARY Liberal leader Justin Trudeaus' move to place the Big Six banks under his ire instead of Big Oil, which was his former favourite target, has caused some temporary relief in Calgary's oilpatch but also anxiety that additional sectors and energy may be targeted during the federal election campaign.
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Article content Trudeau announced Wednesday that he would tax large financial institutions (including banks and insurers) with an additional 3 percent tax on profits exceeding $1 billion. This video is not loading. We are sorry.
Tap here to view other videos by our team. Refresh your browser to see other videos from our team. Liberals shift focus to Big Banks instead of Big Oil. Back to video Dan Tsubouchi (principal and chief market strategist at Calgary's investment firm SAF Group) said that he believes the Liberal rhetoric will cause additional damage to oil and gas executives during this campaign. He said that he does not believe that he has moved away from Big Oil, and in particular the oilsands. He also stated that oil and gas producers had made large profits this year, and may be eligible for the same tax as the banks. Other Albertans believe that the Liberal campaign's focus could shift back to the energy sector or to another sector of the economy. This could affect investment confidence and competition as the wider economy struggles to recover from the COVID-19 pandemic.
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Article content Canada is an ongoing project. We are struggling to be competitive globally. The last thing we should do is fight among ourselves, regardless of whether it is regions or sectors. Adam Legge is chief executive of Alberta's Business Council. Other countries will notice and fly by us, Legge stated. The temptation to campaign against corporate boogeymen across any sector is distracting from a more substantive conversation about policy. It is best to address the root causes. He said that if it is CO2 emissions, then we should talk about CO2 emissions and not just one sector. If it has large profits, talk about competition and not just the banking sector.
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Article content So far, banks' response to Trudeaus election promise was tepid. They mostly channelled their lobbying efforts through their industry lobby group. According to the Canadian Bankers Association, the proposed tax increase would decrease income, which would otherwise benefit most Canadians who own bank shares, or indirectly through mutual funds and pensions, such as the Canada Pension Plan. Victor Dodig, chief executive of Canadian Imperial Bank of Commerce, stated on Thursday that banks have always been at the center of attention. He also noted that Trudeaus previous campaigns had targeted oil and gas.
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Article content. Trudeau's statement that he would not tolerate Big Oil during the French-language television debate caught the attention of English-speaking Alberta oil executives. Oil and gas workers and executives had to confront a slew of issues during the 2015 election campaign, including the merits and integrity of pipeline regulators Energy East and Energy East, according to Glen Schmidt, the former chief executive of Laricina Energy Ltd., an oilsands producer. Schmidt also said that the country's reputation for attracting foreign direct investments could be damaged by campaigning against certain sectors.
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Article content He stated that the result is that many companies are no longer in existence. Tsubouchi stated that the Liberals might propose new policies to target the oil and gas sector to increase their polling numbers. This would help close the gap between the Conservative Party and the Liberal Party. He said that he believes they will act sooner than expected to stem the bleeding. Remember that Prime Minister Trudeaus kickeoff speech stated, "We think more ambition on Climate Change is necessary now." "Some people don't expect that climate change will play the major role in 2021 elections as it did in 2015 and 2019. Duane Bratt from Mount Royal University in Calgary said that it is a shift in tone by the Liberals to focus only on the Big Banks. He also stated that the change is due to the increasing cost of housing.
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Article content Climate and energy are not as important in this campaign than they were in 2019. He said this while pointing out that COVID-19 and health care are the other major issues in this campaign. Bratt stated that the Big Six banks (like Big Oil) are easy targets during campaign and that attacking these industries was a favorite tactic of Jack Layton, a late NDP leader, which Trudeau has since emulated. More on this topic Trudeau criticizes Doug Ford, Ontario Premier, for his $1-billion vaccine passport promise to Philip Cross. We need leaders who are focused on economic growth. Justin Trudeau's poor COVID-19 record. Who is going to defend the big banks? He said that while many companies suffered losses during COVID but not the banks, and that he expected bankers to try to stay out of the limelight until after the election on Sept. 20.
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Article content National Bank made $839 million. CIBC reported a quarterly profit of $1.7B, while Royal Bank of Canada announced a record quarterly profit of $43 billion on Wednesday. Gabriel Dechaine, a National Bank analyst, said that the banks would not delay any further investor presentations or reports in order to avoid more political attention. He said that they don't think they will make any hostile remarks in public. At most, I think they would provide some argument against a move to increase their taxes and I think the arguments around that would revolve around what they did to support Canadians during the financial crisis by deferring mortgage payments or reducing interest rates on certain products. With a file from Bloomberg Email: gmorgan@nationalpost.com | Twitter: geoffreymorgan
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