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A strange dynamic has emerged in Canada whereby the industry that needs a climate solution most, is the industry most identified with the problem - oil. Sophisticated leaders in the oil industry know this more than anyone. That is why we have seen oil company CEOs and Alberta-based energy analysts speaking out on the need for effective and stable climate policies, including carbon pricing – at price levels higher than they are today.
Yet the political parties who pretend to represent the interests of the oil industry are the ones dismantling carbon pricing and other policies that would help Canada transition to a clean economy. Add to that the McCarthy-esque Kenney “war room” trying to suggest that foundations and charities are somehow not permitted to weigh-in on the world’s great challenge of climate change, and oil industry lobby groups sponsoring nonsense to support this kangaroo-court sham, and we have the makings of the true demise of Alberta as an economic player going forward.
To understand why and how this will happen, we need only turn back the clock to the days of Harper and the various Alberta premiers whose collective intransigence led to Alberta and Canada being a global punching-bag as climate laggards. Forgotten, it seems, is that the Conservatives in power federally and provincially were still incapable of getting a pipeline built, mainly because of their climate science avoidance and disrespect of due process. How then do they imagine that even greater ignorance, and more egregious due process will succeed?
If Scheer wins, this is what the Canadian political playbook will look like. First, Conservatives (or at least the Reformers at the helm) will be gloating in a false victory for those who do not accept the urgency. Second, a strong coalition of leaders who seek to delay action will dig in on dismantling climate policies, ensuring that Canada returns to global pariah status on the international stage. Third, as a consequence of the first two, anti-Alberta campaigns will ramp-up and the Kenney war room will be exposed for the boondoggle it is. And finally, the international investment community will hasten the already rapid withdrawal of investment from Alberta accelerating the provinces economic woes. At this point new pipelines will not be needed as the industry will be contracting. There is now an active and sophisticated global movement on sustainable investing and if Canadian businesses (financial and fossil fuel) aren’t actively defining how to invest in the transition out of oil, the scenario painted above will come faster and harder.
The picture gets worse if we toss in a strong Bloc Quebecois showing in Quebec and the idea of a minority Conservative government propped-up by an anti-oil, anti-pipeline, essentially anti-Alberta party. A party that wants to redefine transfer payments based on the carbon intensity of provincial economies. This would be akin to having two provincial parties representing their narrow parochial interests pretending to care about the rest of Canada. This might lead to the great Canadian unity irony – where the rest of Canada separates from Alberta and Quebec!
Fossil fuels aren’t going away tomorrow and having Alberta supply Canada and the rest of the world with Canadian fossil fuel is a much better scenario for Canada than shutting down one of the largest economic engines, while other countries eat our lunch. Contrary to popular wisdom, demand for fossil fuels is still growing. The Americans are massively expanding their domestic oil and gas production to record levels, the Norwegians still drill for oil offshore, the Germans mine coal etc. The only option for Canada is to understand and embrace the complexity of how to finance the transition to a clean economy through a measured, long-term transition investment strategy that sees the cleaning up of the fossil fuel sector in a way that demonstrates global leadership. Politicians pitting different parts of Canada against each other is about the worst possible outcome for Canadians and a sad reflection on the narrow-mindedness of our Balkanized politicians. We need to be competing with the world, not each other.
Bruce Lourie is one of Canada’s leading environmental thinkers, the President of the Ivey Foundation, and a Director of Philanthropic Foundations Canada and Canadians for Clean Prosperity.