Will the incoherence of federal climate ambition hurt national unity?

CHELSEA, QUE.—Well, that didn’t take long. Mere weeks after the federal budget offered a generous tax credit to help oil and gas companies create carbon sequestration projects—aimed at redirecting greenhouse gas emissions from oilsands projects underground, or into storage—industry pooh-bahs are moaning that the government proposal isn’t generous enough. As Cenovus CEO Alex Pourbaix complained recently, carbon-capture-and-storage (CCS) projects are costly and complicated and the industry isn’t sure they will pay off in the long term, due to oil’s uncertain future. Despite the dizzying profits of recent months, this is one gamble Big Oil isn’t willing to take. Instead, it wants taxpayers—federal and provincial—to pick up the tab for cleaning up the industry’s growing emissions. Instead of the 50 to 60 per cent tax credit Ottawa offered—worth a notional $8.6-billion by 2030—the industry wants governments to cover at least 75 per cent of the cost of CCS, a technology that has existed for decades, but has yet to be successfully adopted for large-scale use. The so-called Oil Sands Pathway Alliance, representing the six largest companies in the patch, points to Norway, where government has taken on much of the direct cost of building CCS. However, National Observer columnist Max Fawcett points out that Norway also has an equity stake in the country’s Equinor oil company and receives a reported $100 in tax revenue from every barrel produced, compared to the puny $20 per barrel that flows to government coffers in Canada. Here, of course, the industry is privately owned. And the $47-billion the four largest fossil fuel companies will generate in free cash flow (after operating expenses), this year and next, will largely reward investors, not the public purse —and certainly not emissions-mitigating technology. Now that she is safely out of politics, former Liberal environment minister Catherine McKenna, takes sharp issue with this development in an interview with Energy Mix, an online climate newsletter: “When you see companies issue large dividends, fail to invest in technology, and make large profits, then ask government to step up—but say there is no way they’d do it themselves—it actually makes you wonder about the business model.” It also makes you wonder when federal attempts to entice and cajole a recalcitrant industry will give way to muscular regulation—the long-promised cap on oilsands emissions, currently (seemingly permanently) in the pre-consultation stage. Anyone who listens carefully to federal Natural Resources Minister Jonathan Wilkinson, will not be reassured. In a recent interview on the popular Herle Burly podcast, Wilkinson justified his recent decision to allow the oil patch to increase production by 300,000 barrels a day—allegedly to replace the Russian oil that keeps European homes warm. Asked if this extra production doesn’t upend federal emissions reduction targets, Wilkinson insisted: “You can actually do both.” He then points proudly to the Liberals’ recent climate plan—“the most detailed climate plan on the planet”—which foresees a short-term increase in production, but, in the long-term, eventually, somehow, will ensure we meet our Paris targets before the world is plunged into a cauldron of climate madness. Or so says the plan. Like his boss, he confuses a “plan” for the urgent action required. In fact, the ill-advised CCS credit and permissive attitude towards increased oil production, point to the folly of the Liberal “you can do both” mantra. It is contradictory and self-defeating. It might have sounded sensible once, but it has turned into a handy way to avoid tough choices. Nor has the constant appeasement of Alberta’s powerful fossil fuel industry and its political spear-carriers—federal cash to clean up abandoned wells, reduce methane emissions, buy a pipeline to the coast!—done anything to fortify national unity, much less lower emissions. If anything, it has exacerbated divisions. When it comes to climate change, for instance, Quebec may as well be a separate country. It recently became the world’s first jurisdiction to ban further oil and gas exploration. This wasn’t a federal initiative, of course, nor is it entirely a mark of the province’s superior virtue. But it does point to the wisdom of previous provincial governments, that prudently developed Quebec’s abundant hydro power. Those investments, mostly in James Bay, are now paying dividends in both international exports of green power and the emerging electrification of transportation. Quebec is second only to British Columbia in sales of electric vehicles and Quebec-made electric vans and buses are making inroads domestically and abroad—with the financial support of the federal and provincial governments. Even so, EV sales are minuscule nationally, which makes Wilkinson’s “plan” that 60 per cent of cars sold in Canada by 2026 (four years from now) be electric, laughably ambitious. That said, Ontario’s important auto industry, unlike oil and gas, has embraced the future and is embarked on a transition to electric vehicles, with the applause—and significant financial support—of both federal and Ontario governments. A campaigning Doug Ford is showing up with federal counterparts, grinning broadly, as billions in federal-provincial funding is directed at retooling assembly lines, setting up battery manufacturing facilities, and establishing EV research centres at car plants across southern Ontario. (Last week, some $3.6-billion federal-provincial-private money was announced to upgrade assembly lines in Windsor and Brampton, thereby securing well-paying jobs.) It is quite a conversion for Ford, who railed against the carbon tax and eliminated consumer rebates for EVs early in his first term. But the car industry is changing and Ford has no choice but to get on board. (Although he is still championing new highways on vulnerable land.) Last week’s announcement also underscores federal contradictions: subsidize a transition to clean transportation in one province and help sustain oil and gas production in another. While Central Canada moves, albeit belatedly, towards a zero-carbon future, federal Conservative leadership candidates are back-pedalling furiously on climate, joining western premiers, like Kenney and Saskatchewan’s Scott Moe, in denouncing a carbon tax and endorsing an expansion of the fossil fuel industry. Even former champion of cap-and-trade, Jean Charest, has rejected the federal carbon tax. Patrick Brown, who included a carbon tax in his provincial platform when he was an Ontario PC leader, is calling for “consultation” with party members before he reveals his climate plans. The front-runner, Pierre Poilievre, wants to revive the Energy East pipeline, the Northern Gateway, and, basically, every LNG project anywhere. This leaves federal climate debate, literally, all over the map. There is incoherence and mixed signals from the Trudeau government, hostility and denial from the Conservatives and no unity among premiers. As the climate crisis becomes more immediate for voters—with India baking under record heat, severe tornadoes in Oklahoma and another summer of climate threats looming at home—you wonder when, and how, the political fault lines will occur. You even wonder how the country will stay united, in the face of such contradiction and complacency on a vital issue. Susan Riley is a veteran political columnist who writes regularly for The Hill Times. The Hill Times