The Right Honourable Justin Trudeau, Prime Minister of Canada

RE: Economic Recovery Planning in response to COVID-19

Dear Prime Minister,

We, the undersigned are reaching out to you today in full acknowledgement of the tremendous challenges you are currently facing to navigate our country through the COVID-19 pandemic. As such, we do not request your attention lightly. We are, however, gravely concerned about the potential for regrettable decisions to be made in such times of urgency. In particular, we would like to raise concerns regarding news that the Globe and Mail reported on March 19 that the federal government is preparing a $15-billion “bailout package” for oil and gas companies. Given that your government’s announcement seems imminent, we worked hard to prepare this letter collaboratively, in only two days, and in 24 hours we have gathered 265 signatures from Canadian academics at 33 universities, as well as 12 associations.

There is no question that Canada faces an immediate health crisis that is compounding an economic crisis, and urgent action is called for. However, decisions made by the federal government at this crucial moment will shape the future of Canada, and must reflect the interests of all Canadians, and a vision for rebuilding sustainable economies in recognition of the confluence of global shifts currently unfolding. Given that the proposed bailout package has been negotiated secretly with the United Conservative Party (UCP) government of Alberta and the Canadian Association of Petroleum Producers (CAPP), Canadians have a right to be concerned that its contents may represent only a narrow set of perspectives and interests.

As Canadian researchers in multiple fields related to the climate crisis and the economy, we urge the government to channel public revenues both to the immediate health crisis, and toward economic planning that will provide long-term benefits for Canadian workers and families, our ecosystems and the climate. We also urge governments at all levels to avoid sacrificing democratic principles in the name of expediency, by including a broad range of civil society representatives in decision-making about how these large investments in our future will be made. It is not acceptable to give privileged access to big business associations while excluding representatives from trade unions, universities, municipalities, Indigenous communities and non-profit organizations that work on behalf of the public interest.

The UCP government and the Business Council of Alberta have proposed that the federal government buy shares in “distressed” oil and gas companies. In addition, oil and gas corporations have asked for further reductions in their income and property taxes, interest-free bank loans at a time when many financial institutions have significantly reduced financing of fossil fuel extraction, and the freezing of the federal carbon tax rate.

However, public investment in oil and gas at this time is a highly speculative proposition, and particularly unwise given the urgent need for strategic investments in economic recovery. Canadians are already saddled with an enormous environmental debt — both for the remediation of thousands of orphaned oil and gas wells and for the eventual “clean-up” of the oilsands mines and tailings ponds — estimated by the Alberta Energy Regulator to be as high as $260 billion, roughly equivalent to all of the royalty revenue paid by the industry to Alberta from 1970 to 2017.

Premier Kenney argues that Canada “cannot afford to lose the single largest subsector of the Canadian economy.” We question whether Canada can afford to continue to support it. To presume that this industry can be protected with subsidies from the broader circumstances threatening the oil and gas sector globally is folly. As the current price war makes clear, Canada has no control over global oil prices, and growing demand for climate-friendly energy sources further threatens the viability of high cost, carbon-intensive oilsands production.

Canada’s subsidies to oil and gas companies reached $3.3 billion in 2015 alone, contravening our commitments to climate change mitigation. Instead of purchasing equity in oil and gas, Canadian governments should pursue the retraining of fossil fuel workers, and public ownership of Canada’s renewable energy sector, where government coordination and large scale investment are needed in the short term and where investments will be repaid. Funding is also urgently needed to support energy and water conservation, public transportation, regenerative agriculture and other areas of mitigation and adaptation to global warming.

The health crisis unleashed by COVID-19 has highlighted in vivid terms the need for social services and public investment and economies that support the health, wellbeing and futures of all Canadians, and the sustainability of all our communities. De-unionization and privatization of long-term care and health facilities, and the move toward the ‘gig’ economy for social services, have left us highly vulnerable. In addressing the urgent need for job creation, research shows that investments in both social services and sustainable energy produce far more jobs than comparable investments in the capital-intensive oil and gas sector.

In addition to supporting immediate financial relief due to the COVID-19 pandemic, we call for federal leadership to support an economic recovery plan that encompasses a green transition, not stop-gap measures, with income security for workers and a strong public sector. To ensure that the interests of all Canadians are served, such planning must be transparent, with the inclusion of representatives from all sectors of society, including unions and Indigenous communities. We have no more time to lose; we must stop investing in the past and start investing in the future.

Lead authors:

Laurie Adkin, Professor, Department of Political Science, University of Alberta, [email protected], tel. 780 492 0958

Debra Davidson, Professor, Department of Resource Economics and Environmental Sociology, University of Alberta, [email protected], tel. 780-492-4598

Contributors:

Marjorie Cohen, economist, Simon Fraser University, [email protected]

Anna Zalik, political economist, York University, [email protected]

Kathleen Lahey, law professor, Queen’s University, [email protected]

Regan Boychuk, policy analyst, Reclaim Alberta, reganboychuk[email protected]

Emily Eaton, geographer, University of Regina, [email protected]

Emma Jackson, sociologist and researcher, 350 Canada [email protected]

We would like to raise concerns that the federal government is preparing a $15 billion “bailout package” for oil and gas companies.

Angela Carter, political scientist, University of Waterloo, [email protected]

Trevor Harrison, sociologist, University of Lethbridge, [email protected]

Mark Hudson, political economist, University of Manitoba, [email protected]

Éric Pineault, economist, Université du Québec à Montréal, [email protected]

Cc: Ministers William Morneau (Finance), Chrystia Freeland (Inter-governmental Affairs), Jonathan Wilkinson (Environment and Climate Change), Catherine McKenna (Infrastructure)

thank you. let's hope Trudeau realizes the rage he will bring down on his party if he gives Kenny and big fossil MORE tax money instead of following the wise advise that makes us all win EVEN Kenney and the benighted brainwashed alberarns who voted him in.

This crisis is the perfect opportunity and spur to changing paths on energy investments. Money should go to the workers to retrain them, and to support them and their families through this crisis, like other laid off or suffering workers, who may also not have a viable industry to return to, at least for some time. Billions should go to creating renewable energy jobs for the fossil fuel contingent, should they wish to stay in energy generation, or subsidizing education for other choice careers of the future. Everyone in my family supports and would like to add their signatures to this letter, had we the chance. The corporations should not get a bailout, but should feel lucky they haven't yet been asked to pay reparations for the harm their industry has brought to so many households across our country, with increasingly severe and unpredictable weather events. It would constitute a moral crime to pay them money to continue their damaging operations in the face of the science on climate heating. We finally have politicians realizing that public health figures and scientists are not fantasists, but people who deal in facts and consequences. Ridiculous to listen to them on COVID19 but ignore them on climate heating. Trudeau, you have a greater responsibility to everyone currently fighting to return to a liveable world. We need to keep it liveable.

Excellent comments. I would only add that the corporations should be required to clean up the toxic mess that they have left from their activities, not just removing the pollution but to restore the land to its previous condition. Similarly logging companies should have to plant a tree for every tree they cut and not just a single species, but a variety that recreates the forest.

I sign this letter.
Vincent Pigeon, BA, LLB, Vancouver, BC

A superb letter, this is absolutely critical.

This letter must be sent to Mr Kenney who will not fail to notice that the lead authors are from his province and that all but 3 contributors are from west of Ontario. These authors are well aware of the financial importance of the oil industry at this moment, but also see the need to plan for the long term with much less oil.

An excellent letter on challenges facing the government on the environment, social support, indigenous peoples and what the government needs to do.
Missing in this is any reference to the need for all members society, including the authors to reduce there fossil fuel use, reduce energy use etc. This is just as important as the other points made in the letter.
No reference in the need for an overall plan to accomplish what is necessary.
Its time for us all to tackle the elephant piece by piece.

What well-reasoned and constructive arguments from these academics. What bothers me most about the proposed bailout of the industry is that the UPC and the Business Council of Alberta seem to be dictating the components of this package. They and the federal government appear to be deciding together on these components IN SECRET. I initially thought that the Globe's report must be inaccurate, given the lack of transparency surrounding the paper's sources. However, if the report is substantially correct, and if the package as described is indeed being "negotiated" in secret, politics will have once again triumphed over more rational decision-making. The government could spend that bailout money so much more effectively and wisely, as the authors of the letter have pointed out.

Let’s hope the government will listen to these academics but I doubt it. They are too busy supporting their own. The only bright thing in this pandemic is that areas hard hit by this pandemics are showing immense reduction in pollution, see pictures in the Weather app. I am over 70, have COPD, no I never, ever smoked, and may well die in this crisis but I worry about my children, grandchildren and the children of the world. Don’t waste or money on very big polluters, invest in the future of our planet so that your children and grandchildren do not hold you responsible for the destruction of their futures.

Can somebody who knows the legal language PLEASE start a Government of Canada e-petition:

https://petitions.ourcommons.ca/en/Account/Login

that incorporates the above letter?

We can circulate Canada wide & force the government to only give bailout money to: individual citizens, individual workers and small businesses.

This is such an egregious amount of money to prop up a sunset industry. I find it abhorrent that the negotiations are being conducted under the cover of a pandemic, in secret directly with the only beneficiaries, and with no public oversight. It's the Canadian way, and has been since the voyageurs.

The feds and Alberta have all the data at their fingertips they need that strongly signifies world oil demand is likely to collapse well before 2030, but not before roller coaster prices yank Alberta's chain more. The lack of investments in new production, the institutional and financial sector divestments in fossil fuels, the hundreds of billions being invested in non-petroleum transportation, notably electric vehicles and transit, and the initiatives by the EU, India and China to counter the internal combustion engine, all driven by the mounting climate science and direct evidence, tells the only story Canada and Alberta need to know.

What is most demeaning to the electorate is the shameless hypocrisy of Trudeau who relied now twice on the climate action vote. Win an election on "solemn" pronouncements about climate mitigation, sign the Paris Agreement with no meaningful follow up, take an entire 4-year cycle to enact the simplest of carbon-fighting devices (a carbon tax), then take all of a week to buy a pipeline and its export-only expansion, totalling at least $12 billion. Then win another election on the same "solemn" promises, which are empty enough to lose hundreds of thousands of votes from smart people, and now another $15B shovelled at the dying industry on top of the annual subsidies.

Fool me once .... you know how it goes. The third vote may go Conservative, who are worse than the Harper Lite we got with the Kid. The Liberals and Conservatives together have a majority of votes, so on carbon the power of the minority partners in the minority government is not enough. In Alberta, the UCP is safe. Together, the climate and economic consequences from rapid decreases in demand once cheap EVs appear on Calgary car sales lots in 2024-25 are depressing in the context of the biggest industry subsidies ever paid out to one sector by future generations of taxpayers.

That leaves economics, which was very wisely utilized in the above exemplary letter. At this juncture, it's easy to conclude that the best friend climate action and economic efficacy will have will be demand destruction of fossil fuels. Sad to say.

While we will be burning much less fossil fuel to produce energy, oil and natural gas will continue to be used for plastics, agriculture, and other large scale applications for at least the proposed lifetime of the Canadian pipeline projects currently underway because of the size of the fossil fuel based infrastructure and the billions of people who are dependent on that infrastructure.

Revolutionaries advocating "demand destruction of fossil fuels" need to take that into account when sharing their thoughts on a "free" internet infrastructure that demands 2+% of worldwide electricity and depends on throwing away millions of tons of plastic-encased and -based electronics yearly.

The "revolutionaries" include professional independent industry analysts, economists and business columnists. We are talking primarily about liquid petroleum fuels burnt in internal combustion engines, not plastics and paints.

I believe you missed the point that it will likely be economics that will affect the fossil fuel industry more than any "revolutionary" can, despite a decade or more of trying. The competitive auction price points in wind and solar in Alberta and elsewhere prove it. Then there is the promising, affordable technology soon to be released in electrical storage, namely liquid metal batteries, which will provide stable, on demand baseload power from renewable intermittent sources. Moreover, farmers on the Prairies are now moving toward conservation tillage and nutrient-fixing cover crops that require far less fossil input (fuel and fertilizer) and water, as reported by researchers at USask. Farmers not only make more money with per hectare increased yields, but the carbon-absorption sink inherent in these practices is vast.

The Great Pandemic Recession about to befall us is a time to reset the 21st Century economic model toward conservation and away fro the 17th Century resource rip 'n ship model.