Meet Tim Hodgson, the new energy minister Mark Carney hopes can bridge the gap with the West

Former investment banker has got the 'most important portfolio' in Carney's new cabinet

Minister of Energy and Natural Resources Tim Hodgson arrives for a meeting of the federal cabinet in West Block on Parliament Hill in Ottawa on May 13. Photo by Justin Tang/The Canadian Press files

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There’s a story about Tim Hodgson’s legendary tenacity from his investment banking days at Goldman Sachs.

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In 1997, so the story goes, Hodgson was working in Goldman’s Canadian corporate finance group in New York when he caught wind of a hostile takeover bid being made for Wascana Energy, then one of Canada’s largest oil and gas producers.

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Goldman prided itself on defending companies subject to hostile takeovers and Hodgson began trying to get a meeting with the leaders of the Saskatchewan-headquartered company to try and convince them to hire his firm.

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“Apparently they wouldn’t take Tim’s call,” said Simon Bregazzi, who worked at Goldman with Hodgson years later. “So he flew to Regina and just parked in reception until they would take a meeting. Apparently he was there for days, until finally the CEO is just like, ‘F— it. Okay, fine. I’ll meet with this guy.'”

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“He was focused, he was aggressive; he was very sharp,” Proto recalled, noting Hodgson ultimately helped Wascana secure a $1.7-billion offer from white knight Canadian Occidental Petroleum Ltd., which later became Nexen Inc. “We ended up with a substantially better deal.”

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Nearly 30 years later, Hodgson’s tenacity and dealmaking prowess are about to be put to an even bigger test.

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Last week, Prime Minister Mark Carney tapped the rookie Member of Parliament to be Canada’s minister of natural resources, making him the Liberals’ point person on energy and a key intermediary with the West.

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Hodgson stepped down from his corporate boards and was sworn into cabinet as minister of energy and natural resources last week. Photo by The Canadian Press files

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Carney has pledged to make Canada an “energy superpower” and to take a different approach to energy and resource development than predecessor Justin Trudeau, but skepticism is high in oil-rich Alberta and Saskatchewan, where Carney’s track record of environmental advocacy has raised fears that his tenure will bring more of the same.

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Separatist sentiment has been rising and premiers Danielle Smith and Scott Moe have moved aggressively to freeze or scrap the federally regulated industrial carbon tax — putting both provinces on a collision course with Ottawa.

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Whether Hodgson can channel his experience on Bay and Wall Streets to defuse those tensions and produce real results that satisfy the oilpatch without abandoning Liberal climate commitments could be a make-or-break question for the new government.

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“He’s got the most important portfolio from a national unity perspective and he’s got the most important portfolio from an economic perspective. Which, in my view, gives him the most important portfolio in the entire cabinet,” said Walied Soliman, Canadian chair of law firm Norton Rose Fulbright.

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Those who know and have worked with Hodgson have no doubt that he’s up for the challenge, and say that his private sector resumé, his familiarity with the West and his personal temperament will serve him well.

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An old colleague of Carney’s at Goldman Sachs, Hodgson rose to become CEO of the investment bank’s Canadian division, then went on to serve on a number of high-profile corporate boards, including as chair of Ontario utility giant Hydro One Ltd., vice-chair of the Ontario Teachers’ Pension Plan and as a director of oilsands major MEG Energy Corp.

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His first foray into public service came in 2010, when Carney called him up after accepting the top job at the Bank of Canada and said something to the effect of, “Hey, time to serve your country, come work with me,” according to sources familiar with Hodgson’s decision.

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Hodgson dropped everything and joined Carney at the central bank for eighteen months as a special advisor, providing guidance on complex financial contracts known as derivatives and the functioning and stability of financial markets.

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When Carney called again to urge him to run in April’s federal election, according to a source with knowledge of the minister’s decision, he was already thinking about returning to public service: “He felt really seized by the moment, by the economic war that the United States had declared on us,” the source said. “That is why he put his hat in.”

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Hodgson, 64, won his seat in the suburban Toronto riding of Markham-Thornhill, stepped down from his corporate boards and was sworn into cabinet as minister of energy and natural resources last week.

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Gregor Robertson, left to right, Rebecca Alty, Hodgson and Marjorie Michel arrive for a cabinet swearing-in at Rideau Hall in Ottawa on May 13. Photo by Spencer Colby/The Canadian Press files

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Though he now lives in downtown Toronto with his wife Linda, Hodgson claims roots on the Prairies, having grown up in Winnipeg, with a grandmother born in Moosejaw, Sask., and family ties to Alberta.

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Jefferies Canada chief executive Bruce Rothney, a friend of Hodgson’s since their university days in Winnipeg, said Hodgson is sensitive to frustrations in Western Canada over the concentration of political power in Ontario and Quebec.

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“I think Tim is very tuned into that personally,” Rothney said. “Which I think is incredibly important and timely right now.”

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He also has longstanding relationships in the Canadian oilpatch, having worked on deals in the energy sector for years as a banker, and from serving three years as a corporate director for MEG Energy during a particularly tumultuous period for the industry.

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Hodgson was recruited to serve on MEG’s board in 2016, arriving at the Calgary-based company two years into a historic downturn in oil prices that had plunged Alberta into recession, resulting in tens of thousands of layoffs, project cancellations and a provincial jobless rate at the highest level in two decades.

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Oilsands firms had levered up during the previous oil boom, and MEG was deeply in debt and struggling to cut costs when the news came down that the Trudeau government had formally rejected the Northern Gateway pipeline.

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“I think we were all disappointed,” recalled one former director. The company had a significant allocation on Enbridge Inc.’s proposed line to ship crude from Alberta to a Kitimat, B.C. and the cancellation triggered an $80-million write-down on MEG’s books that year.

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“He faced sort of a tsunami of issues while he was on the board,” said Deborah Yedlin, chief executive of the Calgary Chamber of Commerce, noting that by the end of 2018, the shortage of pipeline egress from Western Canada had blown out the price differential on Canadian crude, driving benchmark Western Canadian Select (WCS) to a then-record low of US$14 per barrel.

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“He was on the board at a really tough time, no question. He’s seen it all and he understands it all,” Yedlin said.

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Hodgson had a reputation for meticulous preparation and impressed some oilpatch veterans at MEG. It would not be uncommon for him to have read thousands of pages of background material, including footnotes, in preparation for a meeting, a former banking colleague said.

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Former director Harvey Doerr recalled that Hodgson pushed the company to make unpopular but necessary changes and led a committee struck to respond to a hostile takeover bid from Husky Energy Inc., remaining composed in the face of a lot shareholder anger directed at the company at the time.

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“I was very impressed with the way he handled all of that,” Doerr said.

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Andre Mousseau, who worked “shoulder-to-shoulder” with Hodgson for a number of years at Toronto-based venture capital firm Alignvest, said that whatever the job at hand is — and part of the energy minister’s mission will likely be showing that the Carney Liberals will work to get hard things done on a reasonable timeline — he will be driven to deliver results.

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Hodgson does not dither, he added. When a phone call needs to be made, he doesn’t fret over how to navigate the call, he simply picks up the phone and he starts dialling. “Tim is utterly fearless,” Mousseau said. “He moves things forward and he marches in a very straight line with a goal in mind — and he makes things happen.”

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Hodgson grew up a military brat, moving from base to base with his family, served in the Canadian Armed Forces while attending university in Winnipeg in the early 1980s and later dedicated himself to fundraising for military veterans, organizing far-flung expeditions for former soldiers and friends to places like Antarctica, Kilimanjaro and the Himalayas.

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It wasn’t uncommon to see him wearing his 25-pound weighted vest on the running trails of the Toronto ravine system, training for the next expedition, colleagues said. But Hodgson didn’t restrict himself to fundraising.

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Mousseau remembers calling him a couple years back, and upon answering the phone, Hodgson explained that he was somewhere in B.C. helping a veteran he had met get his business off of the ground.

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“He has some incredibly close relationships with veterans who have been through just hellish stuff, to be honest,” said Rothney, who recalled that Hodgson convinced him to join a 120-kilometre trek on skis to the magnetic north pole in 2014.

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“I saw that in the Arctic. Tim just had a natural interest and empathy for that. When I think about him, that’s sort of the highest expression of who he is.”

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Hodgson served in the Canadian Armed Forces in the early 1980s and later dedicated himself to fundraising for military veterans, organizing far-flung expeditions for former soldiers and friends to places like Antarctica. Photo by Richard Vandentillaart

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Jim Leech, who became chancellor of Queen’s University after retiring as CEO of the Ontario Teachers’ Pension Plan in 2014, was also on that memorable seven-day trek to the north pole, alongside wounded Canadian soldiers and Olympic athletes.

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The camaraderie of the trip was part of what prompted Leech to work on Hodgson’s election campaign and publicly support a candidate or political party for the first time.

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“If people with Tim’s integrity and experience are prepared to … serve our country, I feel an obligation to help them,” Leech said.

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Carney may be counting on that ease with people, as well as Hodgson’s fluency in business, to deliver on his economic ambitions for the country.

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The prime minister has said he wants to fast-track projects in the national interest, establishing a single office to assess major federal projects within two years, instead of five.

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During the election campaign, Carney had said he had no plans to do away with policies such as Bill C-69, the Impact Assessment Act and the oil and gas emissions cap — policies that have been criticized for stifling investment in the resource sector — but in an interview on the day his cabinet was sworn in, Carney told CTV’s Vassy Kapelos that he is open to changing legislation: “We will change things at the federal level that need to be changed in order for projects to move forward,” he said.

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There is also cautious optimism that a more collaborative tone from Ottawa could finally yield a breakthrough in talks between the government and oilsands companies over funding for the major Pathways Alliance decarbonization project — a project that is essential to curbing the sector’s outsize contribution to Canada’s greenhouse gas emissions.

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“(Hodgson) understands dealmaking, he understands the economy, he understands corporate Canada, and he came make stuff happen,” said veteran Alberta-based corporate director Ian Bourne.

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These traits should help in the task of unifying Canadians on resource development in what should ultimately be a common goal to wean Canada off its dependence on the United States, Bourne said: “It’s economically the right thing to do, and then (if) you can get the parties around the table, you can get a deal done. And I think he’s very capable of that.”

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Putting some wins on the board over the next year or so will be crucial to winning over Westerners, said Bourne, who first met Hodgson in the early 2000s when he replaced Carney as point person for TransAlta Corp. on the team at Goldman Sachs. At the time, Bourne was chief financial officer of TransAlta.

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“He should relate well to corporate Canada’s CEOs and international players. Hopefully he won’t have too steep a learning curve as a politician,” Bourne said. “He will have to ensure the bureaucracy doesn’t unduly slow him down and avoid interprovincial gamesmanship.”

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The rookie minister has prioritized a trip to the Prairies as soon as possible, with a visit planned to Regina and Calgary this week to meet with provincial counterparts, CEOs and Indigenous and municipal leaders.

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“I have no reason to think that Tim and Mark (Carney) won’t get along very well with Danielle Smith and a couple of the key people in the government. Unfortunately, you can’t predict what they’re going to say, what the provincial people are going to say publicly,” Bourne said. “I don’t think it can derail the things that are behind the scenes, but it can make it a lot more complicated to get it done.”

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Also complicating matters is the left-over distrust of former prime minister Justin Trudeau’s government, something that was evident when former environment minister Steven Guilbeault, who was named to a different role Carney’s cabinet, talked down the idea of building more oil pipelines at a meeting in Ottawa last week.

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Smith was quick to slam Guilbeault’s comments and also criticized Carney’s appointment of Toronto-area MP Julie Dabrusin as minister of the environment, calling the former parliamentary secretary to Guilbeault and Jonathan Wilkinson, Hodgson’s predecessor, “another ‘keep it in the ground’ Environment Minister.”

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Although oil and gas production grew during Trudeau’s time in office, data suggests investment in the sector dropped sharply after oil prices crashed in 2014 and kept falling until the pandemic. Even as prices later recovered, investment never returned to earlier highs — by contrast, investment in U.S. oil and gas has rebounded more quickly after 2020, in part thanks to a more favourable policy environment south of the border.

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Through it all, the Canadian energy sector has more often than not blamed political decision makers, infrastructure constraints, overlapping regulations and protracted environmental assessments for repelling investors and limiting its growth.

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Hodgson will be up against a stubborn conviction in much of the oilpatch that the Liberals have not only been unreliable champions of a sector that’s been a key driver of Canadian prosperity, but that they have actively worked against its growth.

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Germany, Greece, South Korea and Japan, have all come to Canada asking for LNG in the last decade, only to be told that we wouldn’t increase production or expedite LNG capacity, said Adam Legge, president of the Business Council of Alberta, whose members include more than 130 CEOs from across the province.

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“What we want to see is signalling to the world that Canada is open for business. We’re going to produce, we’re going to export our resources for the countries that want to buy it,” Legge said. “No longer will we turn allies away empty handed when they ask for our energy resources.”

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Wilkinson infuriated the oilpatch at times with his public ambivalence towards the sector. In 2023, when Calgary hosted the World Petroleum Congress, one of the largest oil-and-gas conferences in the world, the former minister used his keynote address to talk about the need to transition away from fossil fuel combustion and the likelihood of oil demand peaking by the end of the decade in remarks that went over in the room “like a lead balloon,” according to attendees.

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The perception was that Wilkinson was no champion of Canadian energy, said one source who asked not to be identified: “he took every opportunity to talk about how Canada isn’t going to increase production, we aren’t going to export more, and frankly, it came across that he was not proud of Canada’s resources.”

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The oilpatch is expected to be looking to Hodgson to reverse policies that have posed a problem for the sector, including the oil and gas emissions cap, the oil tanker moratorium on B.C.’s north coast, Bill C-59’s greenwashing provisions, as well as making changes to ease regulatory hurdles for major projects.

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Hodgson hasn’t said much since taking office about his immediate priorities, other than pledging to head West.

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“We look forward to building and I look forward to digging in; we have a lot to do,” Hodgson told reporters last week. “I look forward to working with my provincial and territorial counterparts, our Indigenous partners, our industrial partners and other stakeholders, to build a more prosperous, secure and safe Canada.”

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If the former investment banker with a reputation for persistence and getting things done finds a way to craft a new narrative in the oilpatch that can keep both his boss, his liberal-leaning Toronto constituents — and Alberta and Saskatchewan happy — it could be transformative for the sector and the country.

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