Supporting a transformation to a clean and climate-resilient economy

In the modern era, progressive governments are better stewards of the economy because they have forward-looking ideas. They understand we’re in a period of economic transformation and strive to foster policies that ensure Canada will be leaders in that transition. In addition, greater spending on health care, education and social services ensures that our society is healthy, equipped with a talented workforce and looks after those who would otherwise be left behind.

We’re in the midst of an unprecedented technological revolution, while challenged by a climate crisis, geopolitical crisis and biodiversity collapse. These complex issues make simplified economic solutions ineffective, if not irrelevant.

For example, we can no longer guarantee that lowering corporate taxes will trigger job growth when corporations put their profits into off-shoring operations to countries with cheap labour, incorporating automation, robotics and artificial intelligence technologies that replace workers, and rewarding investors with share buybacks and dividends.

Provinces like Alberta would be better served by policies that encourage the booming renewable energy sector and build knowledge-based and high-skill industries like information technology, clean energy and health care. Simply reducing corporate tax is bad economic policy when backstopped by layoffs for thousands of teachers and wage cuts for health-care workers.

A recent Janet Brown Opinion Research poll revealed that in Calgary, a key battleground in the upcoming Alberta election, people think the New Democratic Party will do a better job of managing the health-care system while holding fast to the opinion that the United Conservative Party is better equipped to manage Alberta’s economy.

A single-minded economic focus on oil and gas will not steer Alberta through some of the most challenging and rapidly changing economic conditions the world has ever seen. This isn’t the time to believe Alberta has little to offer the world beyond oil and gas. Nothing could be further from the truth.

Former premier Jason Kenney handily won the last Alberta election by promising to “stand up for Alberta,” which really meant “stand up for oil and gas.” He quickly cancelled the provincial carbon tax, budgeted $30 million a year for the Big Oil propaganda machine known as the Canadian Energy Centre and announced a risky investment in the now defunct Keystone XL pipeline, which resulted in a $1.3-billion loss.

Premier Danielle Smith is turning the rhetoric into a populist uprising by pushing her Alberta sovereignty agenda. Unfortunately, this is the worst possible moment in history to bet the farm on a resource industry with a dubious future. In spite of the eye-popping value of resources in the ground, there is irrefutable evidence that the consequences of a warming climate are getting overwhelmingly costly for all Canadians, and all nations.

As a result of the climate crisis, the global energy mix is changing right before our eyes. A recent TED Talk by science-fiction writer, lecturer and former Microsoft computer scientist Ramez Naam explains why the renewable energy transition is inevitable and accelerating. Naam points out that solar and wind energy is based on technology and, therefore, follows a trajectory of ever-increasing performance coupled with rapidly decreasing cost.

Fossil fuels are commodities and despite some significant price fluctuations over the years, the average cost of energy is trending higher as the commodity becomes more difficult to extract. The cost of fossil energy will increase further with the implementation of prohibitively expensive emissions reduction technology like carbon capture and storage.

The cost of electricity produced by solar energy has decreased by more than 90 per cent since the 80’s. The cost of wind energy has dropped by 65 per cent over the same time period and the cost of battery technology is decreasing on a similar trajectory. Meanwhile, the cost of fossil fuels such as gasoline has been steadily increasing over the years. Ask anyone who owns an electric vehicle if their fuel costs are now cheaper than when they drove a gasoline vehicle?

If conservative governments make fossil fuels central to their economic strategy, then their legacy of good business sense will be forever compromised by an inability to adapt to a disruptive technology. Premier Smith has declared Alberta a natural gas province and questioned the reliability of renewables. This lack of vision is reminiscent of Blockbuster rejecting a pitch to buy Netflix for $50 million. Sometimes the prosperous incumbent fails to see the writing on the wall.

Kenney stood up for oil and gas by decreasing corporate taxes from 12 per cent to eight per cent, but the COVID-19 pandemic negated any potential job creation from this policy. Alberta’s resource revenues only rebounded strongly after Russia invaded Ukraine, which drove up global oil prices. It would appear global events and market forces have a far greater impact on Alberta’s economy than tax cuts.

While creating policy to help corporations improve their bottom line, the UCP government significantly reduced post-secondary funding and raised the allowable tuition amounts. They also froze the K-12 education budget, ignoring increases in student numbers. This has resulted in increasing class sizes, reduced funding per student and stagnant salaries for teachers, assistants and support staff who suffered layoffs during the pandemic.

In 2019, the provincial government killed funding for a $595-million medical research and testing lab that was to be built at the University of Alberta. The UCP promised to reinvest that money elsewhere in the health-care system, but for the next three years, they fought with doctors, nurses, and front-line workers over pay cuts.

That same year, a promised $100 million in funding for the University of Alberta’s world-class Machine Intelligence Institute was cut. The conservative resistance to economic diversification is exemplified by Finance Minister Travis Toews’ statement made during the 2021 budget announcements, “Some suggest diversifying the economy requires a transition from our traditional sectors such as energy. Let me be clear, Mr. Speaker. That is not this government’s position.”

There is reason to believe Smith will maintain a backward-looking economic plan that spurns diversification. She proposed a potential $20 billion in tax credits to clean up orphaned oilwells, expressed support for coal mining in the Crowsnest Pass region, encouraged Saskatchewan and Manitoba premiers to help build a pipeline to Hudson’s Bay and vowed to promote natural gas electricity generation when the market is driving a renewable energy boom.

Naam’s message is compelling: “Clean energy will win on cost, definitively. But only if we get out of the way and allow it to be built.” The build-out must include the required additional transmission infrastructure and grid storage to eliminate the need for coal and natural gas generating capacity.

Progressive politicians support a net-zero grid and clean electricity policy. They aren’t constrained by climate change deniers and fossil fuel loyalists within their ranks. It’s why progressives will do a far better job of creating conditions that help Canada navigate a rapidly transforming global economy.

Rob Miller is a retired systems engineer, formerly with General Dynamics Canada, who now volunteers with the Calgary Climate Hub and writes on behalf of Eco-Elders for Climate Action. As a climate activist, he works to stop old-growth logging in B.C., to reject coal mining on Alberta’s eastern slopes, to facilitate community involvement in urban afforestation, and to advocate for renewable energy. Miller uses a “systems-thinking” approach to learn, understand, and defend the ecosystems that are under threat by climate change and unrestrained resource development. He lives in Calgary.