Big money for big oil?
Canada faces hard choices when it comes to balancing priorities of economic recovery, climate change
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Hey there, time traveller!
This article was published 27/03/2020 (974 days ago), so information in it may no longer be current.
In times of crisis, it is not uncommon to see governments step in and provide help to industry to keep big businesses from failing.
As the chips fell in the 2008 financial crisis, the United States bailed out big banks; in Canada, the federal government backstopped the auto industry.
Hard decisions were made — and the federal Liberal minority government now faces similar choices amid the 2020 global economic slowdown and pandemic.
A lot of noise is being made about the potential of a bailout for one industry in particular: oil and gas.
“Albertans expect at least that kind of help for the industry that has done more than any other to create jobs, wealth and opportunity,” Alberta Premier Jason Kenney said March 11 in Calgary, before he flew to Ottawa for a meeting of the first ministers.
The ask has been made. Kenney’s outlook for his western province is bleak, as oil prices have reached new lows since the novel coronavirus pandemic spread to North America, paired with a price war between Saudi Arabia and Russia.
The Globe and Mail last week reported a $15-billion federal aid package is in the works and could be announced in short order. The news has spurred many to stand in opposition.
“This would dig us deeper into a form of carbon lock-in and not into a different kind of economy,” University of Alberta political science Prof. Laurie Adkin said.
Adkin is a lead author of an open letter to Prime Minister Justin Trudeau, published this week — and signed by 265 fellow academics, experts and advocates — that decries any move toward backstopping the fossil fuel industry.
“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,” the letter reads.
Adkin said, at this juncture, Canadians and their elected officials should not ignore the damage fossil fuels have caused — not only with respect to climate change, but also the environmental cleanup costs with no one to foot the bill for remediation.
As an alternative to kick-start the economy, clean energy experts are hoping projects that had previously been put on hold could now be green-lit.
Electric vehicle infrastructure, solar farms, wind farms — there are many examples across the country that have been drawn up and are shovel-ready but need to be paid for, said Merran Smith, executive director of Clean Energy Canada (a program based at Simon Fraser University in B.C.).
“I think this is an opportunity to design a sustainable stimulus package, one that is investing in jobs but also supporting the clean energy technologies, and accelerating the path that we are on — that Canada has committed to,” Merran said.
She also pointed to the possibility of the government backing energy-efficiency infrastructure projects, such as building retrofits, to conform with emission reduction targets.
Canada has committed to reducing greenhouse gas emissions by 30 per cent below 2005 levels by 2030, and being a net zero emitter by 2050. It has fallen so far behind the feasibility of achieving the goals has been called into question.
On the other hand, Canada is the fourth-largest oil exporter in the world, according to Natural Resources Canada.
Those who are in favour of federal supports for the fossil fuel industry are quick to point out these resources are integral to the functioning of other big business, such plastics, shipping and airlines.
“It’s an important source of income, not just to the people living in an oil-producing province like Alberta or Newfoundland, but also to Canada as a whole,” said Jack Mintz, an Alberta economist and chairman of the province’s newly-minted Alberta Economic Recovery Council (which has among its members former prime minister Stephen Harper).
Mintz said he doesn’t understand why the federal government would pay for supports for workers who, if industry doesn’t survive, would have no job to go back to.
Adkin, however, is tired of hearing the party line, saying the industry is only ever worried about job loss during hard times, but never when it is looking at trimming the fat to maximize earnings. “It’s insulting to Canadians. It’s as if we are, somehow, the servants of this industry.”
Federal Finance Minister Bill Morneau has said this week further announcements will be made about how the government plans to support not only the fossil fuel industry, but all the hospitality and airline industries — which have also been hit hard by the pandemic.