Around The World in 100 Words - September 2016; Week 34

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This week’s ATW blog highlights the difference between what is said in the media, and the reality of the situation. In this case, the situation I am referring to is the Obama Administration’s dogmatic insistence over the past 8 years, that their decision to kibosh Keystone was based on environmental considerations. Opposition to Keystone by groups including farmers, ranchers, native peoples and Hollywood celebrities on both sides of the border, were said to be rooted firmly in the need to protect the environment, even if it meant leaving Canada’s oil in the ground. Obama’s veto of the project was welcome by activist groups celebrating “victory” for the environment over Big Oil.  
Attached is a picture of the much-lesser-known Dakota Access Pipeline which has not only received approval by the White House, but was fast-tracked to ensure its completion by the end of 2016. Much of the pipeline is already in the ground and with little or no outrage by our Prime Minister Trudeau –the elected official entrusted with safeguarding Canada’s economic interests. As is evident to all looking at the picture, the Dakota Access Pipeline is the Keystone XL Pipeline, just built slightly to the east, and tapping into American Bakken oil in North Dakota. Then-Prime Minister Stephen Harper called the approval of Keystone a “no-brainer”. In fact, the opposite was true. Its rejection was a no-brainer, but not for the environmental reasons given. Rather, it was a no-brainer for Obama to say no, as to do so meant that their competing pipeline could be built to ship American oil to south-west refineries, leaving Canada’s oil stuck in the ground. 



Presidential hopeful Hillary Clinton similarly opposes Keystone XL pipeline, claiming to be interested in saving the planet. Nothing could be further from the truth. It’s all about vested interests (Big American Oil Producers) protecting US oil from Canadian competition and engaging in selfinterested protectionist behaviour at the expense of Canada. Our now sitting Prime Minister has yet to comment on the Dakota Access Pipeline, insisting on a collaborative approach that effectively stops oil sands development. Ultimately, this failure to stand up for Canada negatively impacts the Canadian economy and the standards of living of millions of Canadians. 

Rest assured that the institutional wealth management companies we partner with are aware of this, and it is for this reason that our client portfolios are lightweight in Canadian equity exposure. If Prime Minister Trudeau won’t stand up for the Canadian economy, we certainly won’t risk our client’s capital investing back into it. Leadership matters, and until that changes, we see better opportunities elsewhere including the US side of the border.