One of the biggest issues in the election campaign is climate change. We looked at the relevant platforms of the two parties most likely to form the next government – the Liberals and the Conservatives – and concluded the Liberals have the more credible plan.
But what about a related issue – the development of the country’s massive oil and gas reserves? Which party will be best for the industry?
It’s an issue that has to be addressed in the context of climate change. All the parties say, with varying degrees of enthusiasm, that they aim to meet or surpass Canada’s commitment under the Paris Agreement to reduce greenhouse gas emissions by 30 per cent below 2005 levels by 2030.
That necessarily means imposing costs on the oil patch. In 2017, 27 per cent of Canada’s GHG emissions were produced by the extraction and refining of fossil fuels. The combustion of carbon for transport, in industry and for heating makes up much of the rest of our emissions.
But the resource sector, of which energy is a main component, is the third largest contributor to Canada’s gross domestic product. It supports hundreds of thousands of direct and indirect jobs, and is indispensable to the economies of Newfoundland and Labrador, Saskatchewan and Alberta.
As well, oil and gas are Canada’s biggest exports, making up 22 per cent of our global shipments. Canada sits on the world’s third largest recoverable reserves of crude oil, and it is unrealistic to believe that domestic or overseas demand for fossil fuels will suddenly disappear.
The tension between fighting climate change and developing one of Canada’s biggest industries can be seen in the different parties’ platforms.
At one extreme, the Green Party would stop all pipeline construction, including the Trans Mountain expansion, and ban all new drilling for oil and gas, and all new mining of bitumen. Alberta’s oil sands would be phased out of production in as few as 11 years. The NDP, too, is calling for a quick transition to a “carbon-free economy.”
At the other extreme, the Conservatives under Andrew Scheer are overtly pro oil and gas.
A Conservative government would aim to build an ambitious “energy corridor" to carry hydrocarbons across the country; it would end the federal carbon-pricing regime, which is designed to curb demand for carbon products; and it is against proposed fuel standards that would reduce emissions but mean higher costs for producers and consumers.
Mr. Scheer has also vowed to scrap Bill C-69, the new environmental assessment law that the Conservatives contend is tilted against the oil sands, and to fast-track court cases against pipelines through the judicial system.
But speeding up the regulatory process is not entirely in the hands of the government of the day. Its wish is not its command – as Ottawa’s last two governments learned.
If the Trans Mountain expansion has shown us anything, it’s that the courts will insist on extensive consultations with Indigenous peoples, and on detailed environmental assessments, before allowing projects to go forward. Those speedbumps exist regardless of who is in government. And in the case of Indigenous consultation, they are constitutionally entrenched.
It means that, while a Conservative government might try to hurry through projects such as pipelines, there would be limits on how much it could do.
Which brings us to the Trudeau Liberals. They have tried to be both pro-oil and anti-carbon. They sketched out a grand bargain under which carbon pricing would raise the political capital needed to pave the way for growth in Canadian oil production, and the approval of new pipelines.
In our Jenga confederation, with provinces and voters lining up both behind and against the oil industry, the Liberals tried to say yes to both sides. It hasn’t been an easy balance to strike. They bought the Trans Mountain pipeline, but in doing so alienated many environmentalists and some Indigenous leaders. At the same time, many in the oil and gas industry worry the Liberals’ new regulatory regime will never approve another pipeline.
It’s hard to miss the difference between the Conservatives’ embrace of oil and gas and the Liberals’ more reticent relationship. However, it’s worth remembering that both parties tried to get projects approved while in government, and both were bogged down in judicial quicksand. That’s why it’s unclear to what extent the Conservatives’ pro-oil rhetoric can actually deliver more returns to the industry.