CAAM Committee Report

Supplementary opinion of the New Democratic Party of Canada

Line 5 and Energy in Canada

Canada and the world are in the midst of a climate crisis. In order for Canada to do its part in reducing greenhouse gas (GHG) emissions, we must set clear short and long-term emissions reduction targets and take meaningful action to meet them. Any credible plan to do this must include a strategy for Canada’s energy sector.

Unfortunately, Liberal and Conservative governments have shown themselves to be incapable of leading the conversation Canada needs to have about its energy sector. Both parties continue to support and promote a model for Canadian oil and gas development built on an unbridled expansion of Canada’s extractive industry.

The State of Michigan’s unilateral revocation of a permit for Enbridge’s Line 5 pipeline presents us with an opportunity to think about what Canada can do differently, both on climate and on our relationship with our American neighbours.

Enbridge’s Line 5 is a major crude oil pipeline providing feed stock for Ontario and Quebec refineries. Line 5 carries 540,000 barrels per day of light crude and propane. There have been no leaks at the Straits of Mackinac crossing in the 63 years the pipeline has been in operation, and Enbridge’s proposed tunnel would make the pipeline safer without expanding capacity.

Shutting down Line 5 means higher energy costs and job losses at Canadian refineries, without doing anything to reduce our dependence on oil and oil-derived products or reducing our emissions.

As New Democrats, we recognize the importance of trade to Canada’s economic success and that the United States is our most significant trading partner.

The critical area for the future of the US-Canada relationship is how we align to create clean jobs and reduce emissions in sync with each other. Neither of our countries can afford to be climate laggards, and we can only become global climate leaders by working together to drive down emissions and decarbonize our economies.

Studying Canada’s most important relationship is important – but it should focus on these emerging issues of the future instead of only rehashing old debates.

New Democrats recognize that demand for oil and gas will not disappear overnight. Even as we decarbonize our heating and transportation, demand will remain for a long list of products that the petrochemical industry plays an essential role in making, including many of the devices that power the digital economy.

A Canadian government properly focused on the public interest would have a plan for the energy sector that identifies an environmentally sustainable rate of oil and gas extraction built on a carbon budget designed to reduce Canada’s share of GHG emissions to a level consistent with limiting global warming to 1.5 degrees Celsius.

While those targets would, as they must, be driven by climate science, they would also place the Canadian energy sector in a better position to follow the market. More and more economies are transitioning away from fossil fuel use in heating and transportation. Global investment firms, insurance companies and other large economic players are beginning to structure their businesses around the need to transition away from fossil fuels and adapt to the consequences of climate change that we are already experiencing and that will become more pronounced in the decades to come.

Through the first decade of this century the energy market attracted massive investment into the Canadian oil and gas sector and rewarded adoption of the ‘rip and ship’ model. While multinational companies were making huge profits, workers from across the country who could go to work in the oil patch enjoyed steady work and high wages.

Those economic conditions no longer obtain. In the aftermath, we see that the lack of a strategy has left workers unemployed, with homes that are no longer worth the value of their mortgages and a planet that is closer to climate disaster.

With the good times over, private economic actors are trying to squeeze as much value out of their assets as quickly as possible. The question Canadians should be asking is whether corporate strategies for short-term profit are really identical with Canada’s long-term public interest.

Conservatives in Canada answer this question with a ‘yes’. The underlying theme of their statements on energy issues is that anything that is good for oil and gas companies must also be good for Canada as a whole. They have therefore argued in defense of tax breaks and subsidies to oil and gas companies, less stringent environmental regulation – going so far as to deny the reality of climate change – and massive public investment in private oil and gas projects. Alberta Premier Jason Kenney’s recent decision to invest billions of dollars of Albertans’ money into the now defunct Keystone XL pipeline is a case in point.

While Liberals may be more reluctant to say ‘yes’, their actions tell a different story. Despite an alleged revamp of Canada’s environmental review process, controversial natural resource projects, including major pipelines geared toward massive increases in extraction, were allowed to proceed under the Harper-era environmental review even after 2015. The Liberal government has steadfastly supported the Keystone XL pipeline; a project based on increased extraction.

There are other countries that have seen success in reducing their emissions and driving economic activity at the same time, but they have a plan. They are not relying on the vested interests of the current economy to spontaneously transition their economy to a successful, sustainable model. They are attracting international investment not in spite of, but because, they have a clearly articulated plan for climate action.

Canada can do this too, but we are plagued by complacency when what we need is political leadership.

Protecting the Great Lakes is an important priority for New Democrats. We would have welcomed the opportunity to hear from officials from the state of Michigan and affected Indigenous communities about their concerns. We look forward to the timely completion of the replacement tunnel to address these concerns and continue supplying the industry in Sarnia.

This Committee saw important points of common ground between parties. But the debate of the future is about whether Canada will continue to allow large companies to increase the rate at which they extract oil and gas to maximize their short term profits for as long as possible, or whether the federal and provincial governments will finally work together on an energy strategy that seeks to reduce our carbon footprint, provides employment for Canadian workers, holds oil and gas development to stringent climate targets, takes Indigenous rights seriously and aligns its efforts with the US to strengthen the climate action of both countries.

Getting this done will require meaningful public sector leadership that Liberals and Conservatives have so far been unwilling to discuss, let alone provide. New Democrats are prepared to lead the way.