Seen and Heard: The Future of Canada’s Climate Change and Energy Policy

Jordann Thirgood

With the federal election just around the corner, there is a daunting and unavoidable topic on the minds of voters and candidates alike: climate change. On Tuesday October 6th, just under two weeks before Canadians cast their ballots, the School of Public Policy and Governance along with the Munk School of Global Affairs held a panel discussion titled, “Our Future: Canada’s Climate Change and Energy Policy Post Election Day”. The conversation, moderated by co-director of the Munk School’s Environmental Governance Lab, Matthew Hoffman, brought together a diverse and well-rounded group of experts, including Karen Clarke-Whistler (Chief Environment Officer of TD Bank), Shawn McCarthy (Global Energy Reporter at the Globe & Mail), Jeff Rubin (former Chief Economist of CIBC World Markets), and Keith Stewart (Climate & Energy Campaigner at Greenpeace Canada and U of T adjunct professor).

The goal of the evening was to address the likelihood of radical changes in both policy and politics regarding the environment and energy, and the challenges that this will create for the 42nd Parliament of Canada. Confronting these issues is essential after Canadians spent the summer scrolling through news headlines about volatile oil prices and a shaky economy. Jeff Rubin asked a simple question to get the ball rolling: why is our country such an outlier in addressing climate change and reducing emissions? The problem lies in what our country has defined as the engine of economic growth, and our next leader – whoever it is – will face the issue of our prized petroleum profitability becoming strained.

This is not a cyclical downturn or a market-induced contraction. Oil is beginning to look like a stranded asset, which changes the debate over pipelines if the expensive extraction of Alberta’s bitumen is no longer a profitable enterprise. This raises several challenges. If the market cannot finance oil sands expansion, our economy takes a devastating hit. But, on environmental terms, even the current petroleum activity makes the ideal estimated carbon reductions look challenging – and try to imagine the cost of decommissioning an oil sands project. Estimates suggest that the reclamation of land and cleanup costs could run as high as $15 billion, which taxpayers are potentially on the hook for. There’s also an (un)fortunate caveat in commodity downturns: low prices. When the cost of filling up your SUV plummets, consumption dramatically increases. While this is initially exciting for road-tripping Canadians, it’s devastating to the environment and our efforts to reduce greenhouse gas emissions.

There is, of course, a silver lining. Renewable resources are no longer “boutique” and the costs involved with solar energy, storage, and electric vehicles are ever declining. Innovation is key in this respect. As TD’s Karen Clarke-Whistler pointed out, there is no shortage of great ideas. There is a shortage, however, in financial literacy and good management. Renewable technology is constantly evolving in the realm of academia, but moving that to commercial scale is called the “valley of death” for a reason. New ideas are associated with high initial costs and when capital funding is scarce, it is likely to die off before generating steady revenue streams. We can do much more to support this movement and allow innovations to rattle the energy sector. The extent to which governments should fund, promote, and regulate these innovations, however, is another can of worms altogether.

There is also widespread acknowledgement that a real cost is associated with not having policies to adequately address climate change. These costs can occur as a result of the property damage and stalled economic activity that results from extreme weather events. Rewind back to previous elections, and climate change policy was not even a topic up for debate. The issue has finally intensified: people are engaging in direct action protests and are willing to get arrested for the cause. In moving forward, the panelists spoke in detail about sunsetting policies (e.g. a provision to intentionally phase out or terminate something) as a part of the transition process; these options help the energy industry plan proactively for more sustainable resource development. And this process is now only a matter of pace: the energy industry can go kicking and screaming, or it can embrace this movement towards a new low-carbon economy. Government can step in here as well. With the Trans-Pacific Partnership negotiations wrapping up, the government has acknowledged that, like many policy choices, there will be winners and losers. Those who could lose, particularly members of the dairy and auto sectors, would receive compensation to make the transition slightly easier. Such compensation could be an option in transitioning away from a carbon-reliant economy as well.

Regarding provincial leadership, the panel had mixed reviews. Our current federal government has been stagnant on tackling climate change and has refused to meet with provincial Premiers, on any issue, since 2009. Provinces have instead taken progressive steps towards climate action on their own, developing cap-and-trade policies and implementing carbon taxes. The Premiers have also created the backbone of a National Energy Strategy. Karen Clarke-Whistler described a scenario in which our Premiers had a moment of enlightenment last summer: they got together in the absence of the federal government and realized they didn’t even need them there. But does that let the federal government off the hook? Firstly, there is a problem of basic fairness. While Ontario and Quebec have moved forward with cap-and-trade programs, Saskatchewan has done little to nothing at all. This dilemma is common among federations attempting to combat climate change, and the sub-national governments putting forth the most effort are oftentimes those generating the least environmental impact. The federal government should, at the very least, be setting minimum standards for provinces to abide by. The NDP, for example, has proposed a cap-and-trade system in their platform that would allow provinces to opt out if they are making equivalent efforts.

While the leadership of the provinces is inspiring, this is no reason for the next ruling federal party to continue in such a lackadaisical manner. Our next Prime Minister will need to make a decision on whether Canada will remain an energy exporter or not, and this is a federal decision. If we continue as a natural gas exporter, the PM needs to rethink our relationship with the United States, which is becoming increasingly energy self-sufficient. If we stop exporting oil, the PM must decide how to diversify and support new innovative energy solutions. The Premiers have proposed attending the United Nations Climate Change Conference in Paris this December to represent our country, but provincial attendance shouldn’t be an option. We need the Prime Minister to take a leadership role and federal attendance at the conference is necessary to showcase that. The groundwork has been laid for a better outcome this time around – we have learned a lot since the 2009 Copenhagen summit and many have high hopes this year. The role that Canada will play, however, depends entirely on who we send to the conference as our next Prime Minister.

 

Jordann Thirgood is a 2016 Master of Public Policy candidate at the University of Toronto’s School of Public Policy & Governance and a Policy Intern at the Mowat Centre. She holds a Bachelor’s degree in International Development Studies with a specialization in Political Economy and Administrative Change. Her areas of interest include environmental and social policy, as well as corporate responsibility.

 

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