Conservative victory in Canada's Alberta may spell trouble for Trudeau

By Nia Williams
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Alberta's premier-designate Jason Kenney speaks to the media in Edmonton

Jason Kenney, Alberta's premier-designate and leader of the United Conservative Party (UCP), meets with the media in front of the Legislature Building in Edmonton, Alberta, Canada April 17, 2019. REUTERS/Candace Elliott

By Nia Williams

Calgary, Alberta (Reuters) - The landslide election win of a right-leaning, pro-energy industry party in Canada's main oil-producing province of Alberta signals momentum may be building against Prime Minister Justin Trudeau months ahead of a federal election in October.

The United Conservative Party (UCP) trounced the left-leaning New Democratic Party (NDP) government in Tuesday's provincial election by tapping into frustration over the economy and a struggling oil and gas industry.

"Alberta is open for business!" UCP leader Jason Kenney said in a victory speech in Calgary on Tuesday.

Kenney's supporters, many wearing cowboy hats, roared when he drove directly into the venue in his blue campaign pickup truck emblazoned with the slogan, "Alberta Strong & Free."

Kenney, who had dominated in opinion polls ahead of the vote, promised to defend Albertans against Trudeau and the federal government who, he said, were taking advantage of the province and its oil and gas.

The vote comes at a challenging time for Trudeau, who has been mired in a scandal https://reut.rs/2Zhjx2P over allegations of interference in a corporate corruption case that has led to the resignations of two Cabinet members and his top adviser.

The scandal has cost the Liberal Party prime minister his lead over Conservative Party leader Andrew Scheer, opinion polls show.

Kenney's victory also appeared to signal a conservative shift in the country ahead of the national vote. Alberta is the third major province to have picked a right-leaning premier over the past year, following Ontario and Quebec.

Results of the vote, with the count nearly complete, showed the UCP won 63 out of 87 seats in the provincial legislature. Kenney, 50, a former federal Cabinet minister, will be sworn in as premier on April 30 and the legislature will convene in the third week of May.

Shares of major energy companies climbed, with the Toronto Stock Exchange energy index closing up 1.4%. Cenovus Energy Inc rose 3% to C$13.56, and Canadian Natural Resources Ltd surged 3.2% to C$41.80.

A number of Canada's largest energy companies including Suncor Energy Inc, Imperial Oil Ltd and Husky Energy Inc said they looked forward to working with the new government.

"To many of our fellow oil and gas workers who are out of work, underemployed, or otherwise without hope, it feels like spring has returned to Alberta," said Mark Scholz, chief executive of the Canadian Association of Oilwell Drilling Contractors.

Tim McMillan, chief executive of the Canadian Association of Petroleum Producers, said Alberta now had an opportunity to lure back investors that left the province during the past few years.

'CLEAR MANDATE'

Kenney has promised to champion Alberta's energy industry and step up the fight to get new oil export pipelines built, but he will face the same dependence on fluctuating oil prices that previous Alberta governments faced.

"This is a pretty clear mandate for the UCP. Now we have to see if Jason Kenney can live up to his promises, especially in reviving the economy," said Andy Knight, professor of political science at the University of Alberta.

"He's going to face some of the same challenges that (Alberta NDP Premier) Rachel Notley had."

Notley's government introduced a carbon tax to help cut emissions of greenhouse gases in 2015, when Trudeau took power. Kenney said on Wednesday the first bill in the new legislative session would be to repeal the provincial carbon tax.

Such a move by Kenney could be countered by federal government measures. Earlier this month, Trudeau imposed a carbon tax in four provinces that do not have plans to tackle global warming, and has made clear he would do the same for Alberta if needed.

Kenney has blamed Trudeau for a lack of progress on new oil export pipelines, including the Trans Mountain expansion that will triple the amount of crude reaching the Pacific Coast from Alberta's oil sands.

The federal government bought the project from Kinder Morgan in August 2018 to ensure it gets built, and will announce next month whether the expansion is still in the public interest. The project faces fierce opposition from environmentalists, indigenous groups and the government of British Columbia.

Kenney said his government on being sworn in would immediately enact legislation giving Alberta the option to turn off the flow of energy to British Columbia, and use that as a bargaining chip in negotiations with its neighboring province.

"This is not a bluff," Kenney said on Wednesday. "Alberta will no longer stand by as others stand in the way of our future."

(Reporting by Nia Williams; Editing by Steve Scherer, Bernadette Baum and Peter Cooney)