Two new reports call for end to subsidies and phase-out of Canada’s oil and gas industry

Two new reports expose Canada’s continuing financial support of the fossil fuel industry and call for a phase-out. These appeared in the same week as the federal government reported Canada’s latest National Inventory of Emissions to the United Nations’ UNFCC, showing that the oil and gas industry is the top source of carbon emissions in Canada.

The first report, by Environmental Defence, is Paying Polluters: Federal Financial Support to Oil and Gas in 2020 , released on April 15. It estimates that the government has provided or promised at least $18 billion to the oil and gas sector in 2020 alone, including  $3.28 billion in direct subsidy programs and $13.47 billion in public financing. Paying Polluters decries the lack of transparency – especially for funding through Export Development Canada  – but nevertheless attempts to list the tax subsidies and direct spending programs, in an Appendix at the end of the report. In addition to obvious subsidies, the tally includes loans for pipeline construction, research into new technologies for cleaner processes, job subsidies for reclamation of oil wells, and even policing costs for pipeline construction – think $13 million taxpayer dollars paid to the Royal Canadian Mounted Police to protect the construction site of the Coastal GasLink pipeline.

Environmental Defence concludes with five recommendations, including a call for greater transparency, and for “a roadmap to achieve Canada’s commitment to phase out inefficient fossil fuel subsidies before 2025, and shift these investments and public finance towards supporting a path to resilient, equitable zero-carbon societies.” It should be noted that the government first pledged to phase out these subsidies in 2009. The report is summarized, with reactions, by Sarah Cox in The Narwhal, on April 16.  

A second report, Correcting Canada’s “One-eye shut” Climate Policy, was released on April 16 by the Cascade Institute. It summarizes Canada’s history of fossil fuel production, and refutes those who argue that we are a small country whose emissions don’t compare to those of China or the U.S. Calling on Canada to accept its global responsibility, the authors state that “Canada’s 2021-2050 oil and gas production would exhaust about 16 percent of the world’s remaining carbon budget. Canada is indeed a “carbon bomb” of global significance.”  This is the first of many hard-hitting, frank statements in the report, including a highly critical discussion of the “fool’s gambit” of hydrogen production, and an assessment that “A highly resourced and well-organized “regime of obstruction” has developed in Canada to block effective climate action and ensure increased fossil fuel extraction.”

Correcting Canada’s “One-eye shut” Climate Policy references the Environmental Defence  Paying Polluters report, agreeing with the call for a phase-out of government support and subsidies. It also offers more information about subsidies – for example, an estimate that the provincial supports, including royalty credits, constitute an additional estimated $4.2 billion a year. Other less-than-obvious examples of support for oil and gas:  subsidies that encourage fossil fuel consumption, like aviation or mobility investments,  and over $250 million  directed to four oil sands major companies under Canada’s Emergency Wage Subsidy during Covid-19.  The report states that Imperial Oil alone received $120 million in wage support while concurrently issuing $320 million in dividends. Yet on the issue of oil and gas jobs, the authors state that in 2019, the oil and gas sector represented just 1 percent of direct employment in Canada, and 5.5 percent in Alberta. “To save costs, the industry has aggressively cut jobs, by 23 percent over the 2014 to 2019 period, even as oil and gas production increased by 24 percent, reaching record highs, over that same period.”

The One-Eye Shut report goes further, offering specific policy options within the federal jurisdiction to phase out the industry, including: “prohibiting the leasing of federal lands and waters for fossil fuel production and infrastructure; implementing a “climate test” on all new fossil fuel projects and removing federal impact review exemptions; canceling the Trans Mountain expansion pipeline; divesting federal public investment funds from fossil fuel production; and removing federal subsidies and public financing that supports fossil fuel exploration, production, or transportation, including federal funding for technologies that delay a transition away from oil and gas.”

Correcting Canada’s “One-eye shut” Climate Policy: Meeting Canada’s climate commitments requires ending supports for, and beginning a gradual phase out of, oil and gas production  is a Technical Paper written by University of Waterloo professor Angela Carter and PhD. Student Truzaar Dordi, and published by the Cascade Institute.   Participating Institutions include the Corporate Mapping Project, University of Waterloo, Royal Roads University, and the McConnell Foundation.

Federal Advisory Committee on Net Zero policies appointed to augment existing research and recommendations

In late February, the federal government appointed a Net Zero Advisory Committee   with fifteen expert members, including Canadian Labour Congress President Hassan Yussuf and  Climate Action Network-Canada (CAN-Rac) Executive Director Catherine Abreu, as well as  Linda Coady,  Executive Director of the Pembina Institute,  climate scientist Simon Donner from University of British Columbia,  Assembly of First Nations Regional Chief Kluane Adamek, and others from government and  industry.  As explained in  “Canada’s new Net Zero Advisory Body and Bill C-12” (March 4) by the Climate Action Network Canada, this Advisory Committee was a platform promise made by the Liberals during the 2019 election, and is intended to provide ongoing expert advice until 2050 to the Minister of Environment and Climate Change. Its mandate, here, is to provide advice on the next framework for Canada’s climate change policies, as currently before the House of Commons in Bill C-12,  the Canadian Net-Zero Emissions Accountability Act.

An article in The Energy Mix emphasizes the independent nature of the advisory body, and the fact that there are no current oil and gas industry representatives included.   However, in “Accountability Bill Lacks ‘Clear Path’ To Net-Zero Targets, Climate Scientist Warns Ottawa”, Catherine Abreu is quoted as saying that despite the Advisory Committee, Canada still lacks clear accountability in climate policy, and that Bill C-12 is  “not the robust piece of legislation we need to make sure Canada never misses another climate target. To make sure it’s set up to drive up ambition, especially in the near term, we need the 2025 goal and a stronger 2030 goal enshrined in law.”

Other policy voices on the Net Zero ambition are found in Canada’s Net Zero Future: Finding our way in the global transition, released on February 8  by the Canadian Institute for Climate Choices , and described by the Institute as “the first in-depth scenario report to explore how Canada can reach net zero emissions by 2050”. It  advocates for two pathways: “safe bets” in the short term, and in the long term, “wild cards” which include negative emission technologies that are not yet commercially available.

On March 11,  the Pembina Institute released  How to Get Net-Zero Right,  which recommends top priority for “early, deep, sustained, and technologically feasible direct emissions reductions in every sector. …..Canada’s pathways must define an appropriate role for carbon removal and offsets. Achieving net-zero will require the use of carbon removal to address hard-to-decarbonize sectors or essential end uses that cannot yet be decarbonized. Carbon removal and offsets, however, cannot be approached as an alternative to mitigation, but rather in addition.”

How to Get Net-Zero Right  is the first of a promised series of reports on the issue by Pembina, and will consider social justice and equity concerns.

Fall Economic Statement paves the way for a Green Recovery: energy efficiency, care economy, electric vehicle infrastructure, and nature-based solutions

On November 30, Canada’s  Finance Minister Chrystia Freedland presented the government’s Fall Economic Statement to the House of Commons, Supporting Canadians and Fighting COVID-19.  At over 200 pages, it is the fullest statement to date of how the government intends to finance a green recovery from the Covid-19 pandemic, but Canadians must still wait for a full  climate change strategy, promised “soon”.

The government press release summarizes the spending for health and economic measures, including, for employers, extension of the Canada Emergency Wage Subsidy Canada, the  Emergency Rent Subsidy and Lockdown Support , and new funding for the  tourism and hospitality sectors through the new Highly Affected Sectors Credit Availability Program.  In Chapter 3, Building Back Better,  the Economic Statement addresses the impacts of Covid-19 on the labour market and employment. It includes promises to create one million jobs, invest in skills training, reduce inequality, attack systemic racism, support families through early learning and child care, support youth, and build a competitive green economy.  Most budget allocations will be channeled through existing programs, but new initiatives include “the creation of a task force of diverse experts to help develop “an Action Plan for Women in the Economy”;  launch of “Canada’s first-ever Black Entrepreneurship Program”;  and a task force on modernizing the Employment Equity Act to promote equity in federally-regulated workplaces.  Under the heading, “Better working conditions for the care Economy” comes a pledge: “To support personal support workers, homecare workers and essential workers involved in senior care, the government will work with labour and healthcare unions, among others, to seek solutions to improve retention, recruitment and retirement savings options for low- and modest-income workers, particularly those without existing workplace pension coverage.”

Climate change provisions and a Green Recovery:

Another section in Chapter 3 is entitled A Competitive, Green Economy, which  reiterates the government’s commitment to achieve net-zero emissions by 2050, and reiterates the importance of the Canadian Net-Zero Emissions Accountability Act, currently before Parliament. Funding of  $2.6 billion over 7 years was announced to go towards grants of up to $5000 for homeowners to make energy-efficient improvements to their homes, and to recruit and train EnerGuide energy auditors. A further $150 million over 3 years was announced for charging and refuelling stations for zero-emissions vehicles, and  $25 million for “ predevelopment work for large-scale transmission projects. Building strategic interties will support Canada’s coal phase-out.

Under the heading of Nature-based solutions, proposed investments address the goal of 2 billion trees planted with a pledge of  $3.19 billion over 10 years, starting in 2021-22.  A further $631 million over 10 years is pledged for ecosystem restoration and wildlife protection, and $98.4 million over 10 years, starting in 2021-22, to establish a new “Natural Climate Solutions for Agriculture” Fund.

Reactions from unions, think tanks:

Among those reacting quickly to the Economic Statement, the Canadian Labour Congress  stated generally  “While today’s commitments on key priorities remain modest and reflect past promises, the government has signalled it will make further investments as the recovery begins to take shape.” Unifor issued two press releases, the first stating “This fiscal update shows that Canada’s workers are being heard, and must continue to advocate for the lasting changes required to secure a fair, resilient and inclusive economic recovery”, but a second complains “Canada’s fiscal update fails to support all airline workers .  The Canadian Union of Public Employees similarly issued two statements on December 1:  “Liberals’ economic update offers more delay and disappointment”  and “Canada’s flight attendants union disappointed by the federal economic update” .

Bruce Campbell reacted in The Conversation (Dec. 7)  that “The pace of government action to date does not align with the urgency of the twin climate and inequality crises. Nothing it has done so far is threatening to the corporate plutocracy and its hold on power.”   Several experts from the Canadian Centre for Policy Alternatives contributed to a blog,  A fiscal update for hard times: Is it enough?”, with the answer from Hadrian Mertins-Kirkwood re the climate change provisions : “Planting trees, retrofitting buildings and increasing ZEV uptake doesn’t go far enough without a clear timeline for winding down oil and gas production.”  Climate Action Network-Canada agrees with Mertins-Kirkwood when it states: “ today’s update includes a summary of new and existing spending that we hope will provide an important foundation for Canada’s new national climate plan that we expect in the coming weeks.  ….As part of a larger package, along with Bill C-12, the Canadian Net-Zero Emissions Accountability Act, and the pending new national climate plan, today’s fiscal update provides the backbone to guide Canada through some of the most important global transitions in generations.”

Other reactions:  “Feds’ fall economic statement shortchanges climate” (Corporate Knights, Dec. 2) quotes one observer who calls it  a “meek” effort, and offers a comparison of  the allocations in the Fall statement with earlier proposals from Corporate Knights  and the Task Force for a Resilient Recovery in September . The Energy Mix also cites the Task Force for a Resilient Recovery in its analysis of  the energy efficiency provisions of the Economic Statement , stating, : “the  recommended by C$2.6 billion allocated for a seven-year program raises questions about how seriously the Trudeau government is prepared to confront the climate crisis. In mid-September, the Task Force for a Resilient Recovery called for a $26.9-billion program over five years.”

Costs of climate change in Canada go beyond wildfires and floods: a call for urgent action to build resiliency

 The Tip of the Iceberg: Navigating the Known and Unknown Costs of Climate Change in Canada was released on December 3 by the Canadian Institute for Climate Choices, providing eye-popping evidence of the damage of climate change. Using data from the Canadian Disaster Database (CDD) and the Insurance Bureau of Canada (IBC) – (provided graphically here ) –  the report states that insured losses for catastrophic weather events in Canada totalled over $18 billlion between 2010 and 2019, with the Fort McMurray wildfire of 2016 the largest single weather-related insurance loss event in Canadian history, with nearly $4 billion in insured losses and broader costs of almost $11 billion when property, infrastructure, business interruption, and other indirect economic losses are included.  The report also notes the growing trends: the number of catastrophic events has more than tripled since the 1980s, and the average cost per weather-related disaster has soared by 1,250 per cent since the 1970s.

The main message of this report is directed at policy-makers, and goes beyond costing out the catastrophic losses. It warns that other types of climate change damages are more gradual and less dramatic in extreme events, and that Canada lags the U.S. and other OECD countries in assessing the overall and complex impacts of climate change. The report hearkens back to 2011 as the  last examination of the broad range of national costs to Canada, in Paying the Price: The Economic Impacts of Climate Change for Canada, a report by the now-defunct National Round Table on the Environment and the Economy, archived in the ACW Digital Library .

The main message of the report appears in this 6-page Executive summary , in the three over-aching recommendations, and in these selected quotes:

 “The imperative to reduce greenhouse gas emissions tends to dominate the debate over Canada’s progress in addressing climate change. Yet, as a climate solution, adaptation—ensuring human and natural systems can adjust to the spectrum of effects of climate change— will have a critical impact on the well-being and prosperity of all who live in Canada in the decades ahead. Current adaptation policies and investments in Canada fall far short of what is needed to address the known risks of climate change, let alone those that are still unclear and unknown. This has to change…..

……It’s essential to transition from a state of ad hoc responses to a changing climate and weather-related disasters to one of building resilience. This includes continual learning about what works, what doesn’t, and how to plan for uncertainty. Instead of waiting for more information, the uncertainty inherent in climate change requires acting decisively on what we already know while also developing improved foresight.”

 

The Canadian Institute for Climate Choices intends to follow up from The Tip of the Iceberg with other reports over the next two years, focused on health, infrastructure, macroeconomics and the North.

 

Newly-elected government in Canada outlines its climate priorities; faces first major test in the Frontier mine decision

Canada’s minority government is back in session after the October 2019 election, launched by the Speech from the Throne on December 5.  The Throne Speech traditionally is used to outline government priorities, and signals that Justin Trudeau and his Liberal party will try to stay in power by balancing the demands of the oil and gas proponents in Alberta against the environmental concerns of the rest of the country. The Toronto Star parsed the speech in “What does it mean? The Throne Speech Interpreted “.

On the issue of climate change, here are the actual words of the Throne Speech:

“In this election, Parliamentarians received a mandate from the people of Canada which Ministers will carry out. It is a mandate to fight climate change, strengthen the middle class, walk the road of reconciliation, keep Canadians safe and healthy, and position Canada for success in an uncertain world.”… A clear majority of Canadians voted for ambitious climate action now. And that is what the Government will deliver. It will continue to protect the environment and preserve Canada’s natural legacy. And it will do so in a way that grows the economy and makes life more affordable.

The Government will set a target to achieve net-zero emissions by 2050. This goal is ambitious, but necessary – for both environmental protection and economic growth.

The Government will continue to lead in ensuring a price on pollution everywhere in this country, working with partners to further reduce emissions.

The Government will also:

help to make energy efficient homes more affordable, and introduce measures to build clean, efficient, and affordable communities;

make it easier for people to choose zero-emission vehicles;

work to make clean, affordable power available in every Canadian community;

work with businesses to make Canada the best place to start and grow a clean technology company; and

provide help for people displaced by climate-related disasters.

The Government will also act to preserve Canada’s natural legacy, protecting 25 percent of Canada’s land and 25 percent of Canada’s oceans by 2025. Further, it will continue efforts to reduce plastic pollution, and use nature-based solutions to fight climate change – including planting two billion trees to clean the air and make our communities greener.

And while the Government takes strong action to fight climate change, it will also work just as hard to get Canadian resources to new markets, and offer unwavering support to the hardworking women and men in Canada’s natural resources sectors, many of whom have faced tough times recently.”

 

Reaction from environmentalists and Opposition party leaders appeared in the National Observer, in  “Liberals commit to carbon-pollution target of net-zero by 2050”   (Dec. 5); and in “Throne speech climate commitments dwarfed by spending on Trans Mountain” by the Dogwood Institute .

The Canadian Labour Congress reacted with this generally supportive statement:  “We need bold targets to fight climate change, we owe that to our children …. “We also owe the next generation good jobs and commitments to minimize the impact on workers. Today’s commitments move us towards a greener economy.”   In advance of the Throne Speech, the Green Economy Network, a union network of which the CLC is one member, had made  a harder-hitting statement: “The GEN is demanding that the Prime Minister make climate job creation a priority through investments in renewable energy, energy efficiency and green buildings, public transit and higher speed rail transit.”

Also in advance of the Throne Speech, a group led by the Smart Prosperity Initiative  delivered an Open Letter outlining detailed demands for clean economy initiatives. The twenty-six signatories include leaders from business, environmental advocacy groups, and the United Steelworkers and BlueGreen Canada.

One of the first major tests for the minority government, should it last that long, will be the decision required by the end of February on whether to approve the application by Teck Resources for the massive Frontier oil sands project – a $20-billion, 260,000-barrel-per-day open-pit petroleum-mining project near Fort McKay in northern Alberta. The Canadian Environmental Assessment Agency website provides official documentation, including the July 2019 Joint Review Panel Report , which includes discussion of the  economic and employment impacts of the project (beginning page 883).  Critiques of the Joint Review Panel approval were published in July by The Narwhal here  and the Pembina Institute here .

And now, as Parliament reconvenes and the COP25 meetings are underway, the Frontier mine is becoming the  litmus test of Canada’s climate change policy, as laid out in  “Trudeau will fuel the fires of our climate crisis if he approves Canada’s mega mine”, an Opinion piece by Tzeporah Berman which appeared in The Guardian on December 10.  Also on December 10, Greta Thunberg and fourteen other young people released an Open Letter to government leaders of Canada and Norway, calling on them to block any new oil and gas projects and quickly phase out existing ones. The National Observer explains in  “Greta Thunberg and other youth call on Trudeau to ditch fossil fuels” (Dec.9) .