By Gary G. Mar and Carlo Dade
Published in the Calgary Herald
October 19, 2022
A question that probably crossed Deputy Prime Minister Chrystia Freeland’s mind as she gathered with global finance ministers last week in Washington, D.C., was on which side of the room was Canada.
In one corner were countries like the U.S., Norway, Australia and now Mexico that have rushed to provide energy to European democracies being blackmailed by Russia. On the other side, were authoritarian regimes like Saudi Arabia, Venezuela and Iran cutting oil production and making matters worse. In between were a lot of countries indifferent, unwilling or unable to help.
And that is where Canada stands.
Our allies, none of whom are that much more energy-rich than Canada, have responded with urgency to the threat of democracies in Europe being held hostage by Russian energy extortion and their citizens freezing. Meanwhile, our prime minister in response to a request from the German chancellor for desperately needed help in the form of Canadian LNG told the chancellor that there has never been “a strong business case” for LNG on Canada’s East Coast.
It appears though that the deputy prime minister has joined our allies in having enough of this line of short-sightedness. Weapons are needed in Ukraine; energy is needed in Europe. Contributing one without the other may win one battle, but it will lose the other.
The fight in Europe over Ukraine is not only for democracy against the threat of political pressure from authoritarian Russia. It is also a fight against the longer-term threat from climate change by allowing countries whose populations are faced with freezing this winter to choose gas over coal and continue, instead of reversing, their orderly transition to a less carbon-intensive future.
A new glimmer of hope in this struggle came from Freeland in her address in Washington where she signalled a possible change in Canada’s isolationist energy position when she called on democratic countries to confront tyrannical regimes and wean themselves off energy produced by “petro-tyrants.” She also said that “Canada must and will show … generosity in fast-tracking, for example, the energy and mining projects our allies need to heat their homes and to manufacture electric vehicles.”
While laudable, Freeland’s remarks may have been met by our “friends” with incredulity because their experience is of a foot-dragging, navel-gazing country unable (or unwilling) to rise to the impacts of the Russia-Ukraine conflict on energy supplies. But could Freeland’s remarks signal a possible change in federal politics? Could we see the country step off the sidelines and step up to join the fight of our time?
She has at least talked the talk, the test is what if anything the federal government does next.
The business case for LNG in Canada suffers not from traditional business barriers such as lack of supply and demand, but from the political risk facing approval of new projects like pipelines and LNG facilities. And given the size of investments involved in energy (especially lower carbon energy) and mining, the private sector will not move based on a soundbite. Industry needs long-term certainty and that has to come from all sides of the aisle through a bipartisan policy solution that will last longer than the current government stands.
Although this might seem implausible, it’s not impossible.
European and Asian countries are wondering why, in a moment of such desperate urgency on the energy front, they are looking at a winter of deprivation and a return to coal while, in their view, Canada “hoards” energy. This question of Canada’s isolationist energy policy brings something that has been missing from Canada’s debates about energy and the environment — the true global impact of our actions. These debates now have the added urgency of the fight for the survival of democracy.
Or to put it more bluntly, with democracy in Europe under siege and progress in fighting climate change at stake, where does Canada stand? With the Norways of the world or with the Saudi Arabias?
In this response, there should be no equivocation.
Gary G. Mar is CEO of the Canada West Foundation. Carlo Dade is the Director of the Trade and Investment Centre.