It’s been nearly two years since the Pathways Alliance, a consortium of Canada’s major oilsands companies, was created with the express purpose of achieving “net zero by 2050.” At least, that’s what it keeps saying its purpose is. With each passing day, it gets harder to avoid the conclusion that the real objective is to buy time with advertising campaigns and other public expressions of its good intentions until the next federal election. If that yields a new Conservative government that can relieve the industry of its responsibilities to the environment, the millions fossil fuel firms have spent on advertising and government relations consultants will yield billions in savings on the emissions they won’t have to reduce — or pay for.
That’s the cynical take, anyways. The less cynical one is that the companies want to proceed with these projects, but are unwilling to call out the real impediment standing in their way: Pierre Poilievre’s Conservative Party of Canada. For all of the industry’s talk about “uncertainty” in federal policies around climate change and carbon pricing, the biggest source of uncertainty right now is coming from Poilievre and his promise to “ax the tax.” The threat of a future Poilievre government eliminating the federal carbon tax means oilsands companies can’t bake a rising price on carbon into their economic modelling, which makes emissions reduction efforts increasingly valuable. It’s why they keep asking for something called “carbon contracts for difference,” a financial instrument that will effectively lock in a rising price on carbon even if a future government cancels it.
They need Pierre Poilievre insurance, in other words, not that they’d ever say that out loud. Take Cenovus Energy, one of the biggest oilsands companies in Canada. Its CEO, Jon McKenzie, told investors on a recent earnings call that it won’t hit its own stated emissions reductions targets for 2030 without immediate progress on major carbon capture and storage projects. “There’s no doubt that to reach the 2030 targets of what’s doable, we need to move on that today… But we can’t move on those targets until we get the certainty from the levels of government that we’re currently negotiating with that allow for certainty and investment in these kinds of projects.”
Rhona DelFrari, Cenovus’s chief sustainability officer, echoed that talking point this week. “We’re also dealing in Canada with significant policy uncertainty right now,” she told the Calgary Herald’s Chris Varcoe. “The result is a lack of clarity that companies need to make long-term, multi-decade, multibillion-dollar decarbonization investment decisions.”
And yet, despite many billions in federal incentives and the promise of a rising price on carbon, those decisions are still not being made. There are really only two possible explanations: the industry doesn’t want to risk making them or it doesn’t think it will have to if it waits long enough. Neither is nearly close to good enough.
The federal government isn’t the problem here, as much as industry representatives want to pretend otherwise. It’s been extremely transparent about its intentions, whether that’s financial support for carbon capture and storage projects or the creation of an emissions cap on the oil and gas sector. Bill C-59, the legislation enabling Ottawa’s multibillion-dollar carbon capture and credit incentives, has already been tabled in the House of Commons and is in the midst of committee review in the Senate. And while the Trudeau team made the political decision to carve out carbon tax exemptions for home heating oil, no such relief will be forthcoming for Canada’s largest industrial emitters.
Federal Natural Resources Minister Jonathan Wilkinson is clearly getting annoyed with the oil and gas industry’s ongoing filibuster and its obvious impact on Canada’s decarbonization efforts. “It is now time for the industry to start to show actual progress on the ground,” he said last month in an interview with the Calgary Herald. His press secretary, Carolyn Svonkin, reiterated that message earlier this week. “He is getting more frustrated as they continue to drag their heels, despite the federal government delivering on everything that is promised.”
But Canadians should be just as frustrated here. This is, after all, an industry with a track record of not living up to its lofty promises. The management framework for conventional oil and gas liabilities that the Alberta government announced in 2020 included a promised annual spending quota for cleanup work, one that would begin at $700 million in 2023 and rise to $992 million by 2027. Alas, despite two years of record profits, this talk proved to be predictably cheap. As University of Calgary professors Martin Olszynski and Sara Hastings-Simon noted in a recent op-ed, “The unsurprising result is that this year’s spending didn’t increase, while the forecast increases for subsequent years have all mysteriously vanished. Meanwhile, the liability crisis remains essentially unchanged.”
The playbook, then, seems pretty obvious. Stall for time, make big promises and continue with business as usual for as long as humanly possible. If and when the bill finally comes due, someone other than the current generation of corporate executives and shareholders will have to pay it. For an industry that likes to talk about how ethical its operations are, this is a very bad look — one that will only get worse with the passage of time. If only they cared about things like that.
Brian Mulroney and the death of decency in politics
Brian Mulroney’s passing has prompted a predictable outpouring of grief, remembrances and kind words. Whatever you thought of the man — and I grew up in a family where those thoughts were routinely and often profanely negative — it’s impossible to deny his contributions to Canada or his love for this country. But his passing has also elicited a much more unusual sight: partisans from different parties being nice to each other.
This was a reflection of Mulroney’s enormous charm and his willingness to apply it to everyone he met. Gerald Butts, the former principal secretary to Prime Minister Justin Trudeau, was on a first-name basis with him for years. Bob Rae, the former Ontario NDP premier, shared similarly positive memories of the former Progressive Conservative prime minister. They were hardly alone.
I wonder if the same things will be said by political opponents when today’s crop of political leaders are gone. Our politics are increasingly mean and nasty, and the people practising them often don’t seem capable of thinking or seeing past their next tweet. Rage farming is the order of the day, especially in conservative circles, and their partisan supporters are more than happy to help them harvest that toxic crop on social media.
Not surprisingly, then, the job of serving as a politician is becoming less attractive by the day. It got so bad for France Bélisle, the first female mayor of Gatineau, that she decided to quit rather than continue facing death threats and other forms of harassment. "I wondered about the price to pay to accomplish this demanding work in a context [that is], let's say it, often hostile," she said. “It’s urgent to have a conversation about the climate if we want a continuation of public service."
She’s hardly alone here. As The Canadian Press’s Patrice Bergeron noted, at least 741 of Quebec’s 8,000 local politicians have quit since 2021, while nearly three-quarters of surveyed mayors and city councillors reported experiencing harassment or intimidation. It’s gotten so bad, the province has created a new telephone helpline “to connect officials and members of their families with psychological aid.” Quebec’s municipal affairs minister also suggested that legislation will be forthcoming that tries to address the problem.
Alas, there’s no way to legislate kindness and decency, and any attempt to meaningfully restrict the public’s ability to interact with elected officials will get knocked down by the courts. What we need is a commitment from leaders of all political stripes and sides to refrain from bullying, personal attacks and other forms of behaviour that give the public permission to act badly. Donald Trump, of course, is the leading culprit here, but Canada’s conservatives have seemed far too willing at times to follow in his footsteps when it comes to how they treat and talk about their political opponents.
That might be because this tragedy of the political commons is actually working to their advantage. By raising the cost of getting involved in public life, they effectively discourage the lawyers, doctors, entrepreneurs, teachers and other esteemed Canadians from running. In their place are the political lifers, the ones who have only ever worked in or around politics and don’t understand how dysfunctional that professional culture has become. Political lifers, of course, are much better at following instructions, carrying messages and otherwise serving the partisan needs of their leader rather than the best interests of their varied and diverse constituents.
None of this is good for democracy. None of it is good for our country. We need more people who are willing to reach across the metaphorical aisle, set a good example for their supporters and otherwise raise the tenor and tone of political discourse in this country. And as Brian Mulroney’s death is reminding us, those are fewer and further between than ever.
Geothermal energy is finally having its moment — except in Alberta
The Alberta government’s ongoing attempt to hamstring its own wind and solar industry gets all the headlines lately, and deservedly so. As the Globe and Mail’s editorial board said earlier this week, “It is an attack on private business and it’s an attack on landowners’ rights. It is un-Albertan — the exact opposite of the principles the province holds dear.”
But we shouldn’t ignore the impact it’s having on the province’s geothermal industry, either. Despite being a source of baseload energy — the thing Alberta Premier Danielle Smith keeps saying she’s looking for — it was caught up in the renewables moratorium, and at the worst possible time. That’s because the rest of the world is in the midst of a geothermal renaissance, one that could easily be happening in Alberta if the government was willing to get out of its way.
Take Fervo Energy, the U.S. company that’s applying oil and gas drilling techniques to geothermal energy in the hopes of unlocking much bigger (and cheaper) stores of clean energy. It’s already cut the cost of drilling its geothermal wells in half, and is aiming to deliver electricity at a cost of $100 per megawatt hour. It even has the backing of some big name oil and gas industry players, including veteran trader John Arnold and Devon Energy.
Or, better yet, take Eavor Technologies, a Calgary-based company with a proprietary technology that it has to pilot in Europe. It could, of course, be doing that in Alberta, where the geology (proximity to mountains and old oil and gas wells) is highly favourable for geothermal development. The problem is the political environment, which remains weirdly hostile towards it.
This is a technology that Alberta should be embracing with both arms. It taps into existing geological advantages, puts more oil and gas service companies and their employees to work, and promises an affordable source of clean baseload energy — one that could easily be used to backstop more low-cost wind and solar.
Maybe that’s the problem right there, though. Maybe the current UCP government understands geothermal’s potential only too well and realizes it could both enable more renewable energy development and create a new career path for oil and gas workers. That, of course, would undermine its apparent “fossil fuels or bust” worldview and the economic and political interests that benefit from it protecting the status quo.
The irony of a government that’s supposedly pro-business and anti-red tape deliberately obstructing the creation of new economic opportunities isn’t lost on me. I’m sure it’s not lost on people like the team at Eavor. One can only hope it starts to dawn on more Alberta voters before it’s too late for them to do anything about it.
Andrew Coyne is worried about the economy. We probably should be, too
As columnists, we all have our beats and biases, and that means returning to familiar topics and themes as often as circumstances allow. For the Globe and Mail’s Andrew Coyne, one of those familiar topics is Canada’s ongoing economic decline. In a recent column, he reminded readers that on a per-capita GDP basis, we continue to fall further behind the United States, and suggested that it amounts to a national crisis. “At the very moment we most need growth to pick up, it has all but petered out. What makes this especially galling is that it is almost never talked about in our politics. Party leaders hammer away at each other over growth in the short term, though they can do very little to alter it. But long-term growth barely rates a mention.”
On the facts, he’s correct. The combination of slower economic growth and a rapidly aging population is setting Canada up for a confrontation between the near-term needs of seniors and the long-term prospects of everyone else. Canada’s per-capita GDP is falling behind the United States and other OECD countries and on things like business investment and productivity, things have been particularly anemic since 2015. It would be easy to correlate this with the election of the Trudeau government. To his credit, Coyne doesn’t draw that linkage.
That’s because he understands the real culprit in 2015 was collapsing global oil prices, not a change in government. Indeed, it started to happen in late 2014 as the OPEC-driven price decline put a stop to the construction of multibillion-dollar oilsands mines in northern Alberta, all of which require huge amounts of investment. Here’s the problem: there’s no federal policy — not corporate tax cuts, not subsidies, not anything — that can get those projects going again. And, of course, even if there was, the climate implications would render that moot.
Coyne is right that Canada needs a national conversation about long-term economic growth and where it’s going to come from. Our next federal election, and the months leading up to it, would be a great place for that to happen. We have a choice right now, after all: double down on an oil and gas industry that drove much of our recent prosperity or place some bigger bets on the multitrillion-dollar low-carbon economy that’s going to eventually (and ultimately) define the 21st century.
As business writer and academic John Rapley argued in a smart piece for the Globe, “The world economy is changing rapidly. The likely choice facing Canada is to either get in the race or prepare for a long and eventually irreversible decline.” He notes that Norway and Saudi Arabia, both countries that depend more heavily on oil and gas exports for their prosperity, are investing heavily in decarbonization and the development of new industries. Canada can, and should, do the same. The United States, after all, has already placed its own bets here.
This is what elections are supposed to be for: contrasting visions around key questions about our shared future. If the Liberals want to get back into the game, they need to take ownership of this conversation. They need to present a compelling plan for creating meaningful long-term growth and prosperity, and they need to challenge the Conservative Party of Canada on its refusal to recognize the emerging economic reality of our time. If they don’t, they’ll deserve to lose the next election.
Required Reading
In the Globe and Mail, former CBC broadcaster Wendy Mesley wrote about why she doesn’t get her news from broadcast television anymore. “The current model is not working. I don’t have a magic solution, but it seems there are a few basic considerations. How do we chase an audience? Can a large newsroom or network connect with a large Canadian audience? Can it face controversy and offer two sides on difficult discussions? And if it can, who will pay for it?”
These are good questions, especially when they come from someone like Mesley. I don’t pretend to have the answers, but I sure hope someone at the CBC does.
Speaking of which, my pal Evan Scrimshaw wrote about the Mother Corp’s ongoing challenges on his Substack. I am very much in agreement that the CBC needs a major re-examination of its role and purpose, and while I mused on Twitter that the CBC ought to be aiming for a PBS North-style model, I actually prefer Scrimshaw’s vision.
“Reforming the mandate and focusing less on trying to be Canadian NBC and more on being Canadian HBO will have two effects; it’ll make the products Canadians watch better, and it’ll justify the public broadcaster more,” he writes. “That it’ll also probably make it easier to get people to pay for some form of direct-to-consumer bundle — CBC and the News Network plus a streaming service of all the CBC originals — a lot more palatable if people feel like they have to watch Meech Lake or whatever else the night before.”
I know I’d watch the hell out of that.
And because I always appreciate a skilled defence of the general arts degree, I’d strongly recommend reading this Globe and Mail piece from Queen’s University professor Daryn Lehoux. “People say to me that at some level, universities are businesses, and businesses need to maximize efficiency wherever they can. But I will stress this to my last breath: a university is not like a business in one very important way — education is a value, and education has value, all by itself. That’s it. That’s the deal. Its true worth can’t be displayed in a financial report.”
I’d like to give a resounding “fuck, yes” to all of that, but especially to this: “At universities, we are educating citizens to think critically and to participate intelligently in our democracy, in our society, and in our world. And if money, and money alone, now becomes the top priority of Canada’s research and teaching institutions, then our country and our world are in deep trouble.”
Finally, if you know someone who’s looking to join our team at the National Observer and has a passion for business journalism, please share this job posting with them. I’m delighted that we’re adding a business journalist to our team, and I think they’ll add even more depth and substance to our already substantial offering.
We’re at 3,000 words here, so that’s all for this week. As always, I’m happy to hear from subscribers, and I read every letter.