USask Professor: New Oil and Gas Policies Would Divide Canada

According to a professor of political science, a new policy involving federal investment in oil and gas companies might potentially create a greater rivalry between Eastern and Western Canada.

Policy guidelines setting the terms of future federal involvement with Canadian oil and gas corporations are due to be published by Federal Environment Minister Steven Guilbeault.

Canada has promised to reduce subsidies that promote wasteful consumption and slow action on climate change for the past 14 years, and this policy is expected to be very similar to the one announced by the federal government last year, which effectively ended most of Canada’s public financing for international fossil-fuel projects.

This means that in the future, the federal government will only fund domestic fossil fuel projects if they can be made suitable for Canada’s climate obligations.

“Canada will no longer support subsidies that are directly aimed at the oil and gas sector that give that sector an advantage in comparison to other sectors and subsidies that help the production of fossil fuels,” said Guilbeault last week.

Premier Scott Moe of Saskatchewan tweeted: “If it wasn’t clear before, it is now. The Trudeau government doesn’t want to just reduce emission in our energy sector, they want to completely shut down our energy sector.”

In an interview held on Friday from Brussels, Guilbeault stated that government funding or tax credits that help companies reduce their emissions would continue, even for fossil fuel corporations. Not included is the recently established tax credit for carbon capture and storage systems.

Ken Coates, a retired professor of political science from the University of Saskatchewan, has said that the growth of the oil and gas industry has been crucial to Canada’s economic success during the past four decades.

“The government of Canada has a very peculiar approach to this,” he said. “This approach has not been followed by other oil-producing countries, including places like Norway. It’s incredibly environmentally sensitive but it’s actually pushing back very strongly against the Trudeau-esque approach to dampening down oil production.”

He highlighted that the industry is essential to the Prairie provinces’ ability to trade with the United States.

“From a Western Canadian perspective, why us? Why are you taking the entire burden of dealing with climate change and putting it on the backs of one part of the country?”

The ‘burden’ of mitigating climate change would be more fairly distributed if put on consumers of oil and gas rather than producers, he argued.

“Go into small-town Saskatchewan and talk about electric vehicles, particularly in the middle of wintertime and see if you think people really believe this is going to solve a problem. Same with the rural parts of Alberta. We are still going to need oil and gas.”

Premier of Alberta Danielle Smith, who sided with Moe, argued that the established mandates would be terrible for the Western Canadian economy and unconstitutional.

“Instead of seeking ways to sow investor uncertainty and reduce support for Canadian energy globally, the federal government should focus on partnering with Alberta and investing in our national energy sector to achieve carbon neutrality by 2050, while simultaneously increasing energy production, jobs and economic growth for Canadians,” Smith said in a statement Saturday.

She continued by saying that Alberta would not comply with federally mandated carbon reduction objectives for the oil industry in the province.

According to Coates, energy consumption in Canada will remain high forever.

“We have a huge country, large spaces to cover, extremely cold winters and we will always overconsume energy relative to the rest of the world. It’s simply the reality of being in Canada.”

He mentioned that Saskatchewan supports the development of small module reactor technology as a means of contributing to worldwide efforts to reduce greenhouse gas emissions.

“The country can’t stand too much more of this,” he said. “The potential animosity between east and west is huge. We do not see central Canadian politicians defending the oil and gas industry. There’s an east-west rivalry here that could become very intense.”

“We will pay a price in terms of economic development, prosperity, government services and tax revenue. This is hard for any other reach of the country to stomach.”