WEXIT support in downtown Calgary

Rick Peterson, Founder and Director

Last Thursday we wrapped up the fourth stop in the Suits and Boots Face-to-Face Resource Sector Tour with a great meeting in Calgary.

It’s been hugely surprising, rewarding, and encouraging – as well as a little frightening, as you’ll see at the end when we offer up our preliminary conclusions so far.

Before Calgary’s stop last week, we visited Vancouver, Toronto and Montreal. We have another ten stops planned in the first three months of 2020. Here’s a link to our New Year’s schedule.

I thought I’d share with you Ten Things that we’ve learned so far on this trip, and offer three preliminary conclusions after meeting about 250 people from all sides of the resource sector/climate change debate in those four cities:

  1. More than 90% of the people we’ve met believe that Canada needs to support its resource sector and pipelines.
  2. More than 90% of the people we’ve met believe that climate change is a real issue that needs to be addressed at all levels of government.
  3. More than 90% of people believe that individuals need to take more responsibility to help reduce Greenhouse Gas emissions – but nearly all of them are at a loss at what they can really do except buy electric vehicles and maybe stop using plastic bags at the supermarket.
  4. The most partisan and shrill voices that dominate social media and much of what passes for debate on these issues comes from a small minority on either end of the spectrum. In other words, there is more common ground on issues of resource sector and climate change than might appear to be the case.
  5. The energy sector is widely believed to be poor communicators – language too technical and scientific, and the inability to tell meaningful stories that highlight its points.
  6. Politicians and angry proponents of either side of the debate create a lot of heat and light, but are largely ignored by most mainstream people who believe in compromise.
  7. Many supporters of an aggressive climate change agenda on Canada’s West Coast also support TMX. The lessons learned from the Lac-Mégantic rail disaster were clearly learned in BC.
  8. That’s not the case in Quebec. Outside of Montreal, support for pipelines and access to Western Canadian oil is very strong. What people there cannot understand is how pipeline supporters weren’t able to win social license for pipelines in Quebec after Lac-Mégantic.
  9. Most Ontario residents have very limited understanding of the key issues facing the energy sector.
  10. Canada’s investment community – on Bay Street in Toronto but across the country  – very much treats climate change as a priority issue, perhaps more so than the average person on Main Street realizes. Pension fund and Investment Advisors are all extremely sensitive to ESG (environmental, social and governance) screens on all companies to help determine which companies have taken steps to mitigate potential damage to their businesses from climate change-related events. In other words, you should maybe check to see if those people managing your RRSP, RRIF and TFSA are up to speed on this.

Three preliminary conclusions we’ve come to at this point:

  • Canada’s investment industry is far ahead of the mainstream population in understanding and addressing climate change and quantifying the cost of failing to address it.
  • Reasonable people can disagree on elements of the pipeline and climate change discussion, and there is a reasonable path to accommodate both sides. We’re not ending our reliance on fossil fuels tomorrow, nor are we on the cusp of a climate disaster. That said, no reasonable person is advocating a head-in-the-sand position on both sides. Consensus clearly says that the negative effects of ignoring climate change imperatives will arrive a lot faster than the end of our reliance on fossil fuels.
  • Nobody outside of Alberta believes WEXIT could happen, and none of them want it to. Inside Alberta, however support for WEXIT is clearly strongest in two areas: a strong populist sentiment fuelled by the real pain and hardship being felt at the grassroots levels across the province; and – surprisingly – very much so from the capital markets and financial sectors of Calgary.

This last point is key: WEXIT support in certain (not all) Calgary energy executive suites is clearly very strong – probably more so in the mid-cap, small-cap and private equity sectors and among a wider-than-you-might-think swath of Investment Advisors. These are the people with the ability to fuel the flames of separatist sentiment with real money. Boris Johnson’s crushing pro-BREXIT win last week has given this Western Canadian WEXIT group even more wind in their sails. They won’t openly say it – many will pay lip service to the fact that they don’t want to see the country broken up – but it is clearly there. Scratch the surface a bit and spend some time in the towers along the Plus 15 walkway that connects downtown Calgary’s office towers, and it doesn’t take much to see how powerful this strain is, and where the WEXIT support will come from if allowed to spread.  

This, more than anything, is the most worrisome thing we’ve seen on the road – the potential for significant WEXIT support in Alberta, sparked by populist groups who are hurt and angry, and fuelled by cash from financial sector backers. How this will play out is going to be one of the key focuses of our Tour in the New Year.

Thank you for your support of our Tour so far. I hope this gives you an idea of the opportunity and challenges ahead. If you’d like to help us finish off this important work please chip in here.Chip in to support the Tour.

In the meantime, all the best to you and your family for a Merry Christmas and a Happy and Prosperous New Year.

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