A prominent oil investor says Prime Minister Justin Trudeau’s announcement on Monday that he will step down as leader of the Liberal Party of Canada is good news for Canadian energy companies and their shareholders.
“Today is a fantastic day for energy investors, it’s one that I’ve been praying for for many years,” Eric Nuttall, partner and senior portfolio manager at Ninepoint Partners, told BNN Bloomberg in a Monday interview.
“Justin Trudeau’s economic policies over the past nine or 10 years have been a total failure, but specifically for energy, as Canada’s the third largest holder of oil reserves in the world, the fourth largest producer, it would be impossible to have asked for a more antagonistic prime minister.”
Nuttall said that over the last decade, the federal government has implemented policies that have been detrimental to Canadian oil and gas producers, and ultimately discouraged foreign investment in the sector.
“The interest level in Canadian energy stocks has been high, yet the accumulation of all those antagonistic policies has prevented foreign capital from being invested in Canada and being invested in Canadian energy stocks,” he said.
“So, today’s announcement I think is the beginning of the elimination of the political risk discount being applied to our stocks.”
Nuttall said a Conservative government led by Pierre Poilievre would be friendlier towards Canada’s energy sector and provide a boost to Canadian oil and gas stock prices.
Recent national polling suggests Poilievre would be elected prime minister with a majority government if a federal election was held today.
Nuttall argued that perhaps the biggest positive impact a Conservative government would have on Canada’s energy sector would be to remove existing policies that he says are hurting the industry, such as the contentious carbon tax.
“It’s really the elimination of proposed legislation and the elimination of the potential for any wacko policies further to be announced, and just making our companies more competitive,” he said.
“Our stocks should be trading at a premium to their global peers. We trade at a discount to our global peers, and the only reason for that has been a government over the past nine years that has been incredibly antagonistic towards this space.”