A Canadian energy framework can be built only within federal scaffolding, and with the full participation of federal, provincial and territorial governments.
A Canadian energy framework must be built within the scaffolding of a federal state where all governments have at least some constitutional purchase on energy policy. Just as the provincial ownership of natural resources precludes a unilateral Government of Canada framework of any significant scope, utility or legitimacy, the federal government’s responsibilities with respect to international and interprovincial trade, nuclear energy, endangered species, navigable waters and taxation, to list just a few, also preclude an interprovincial framework of any significant scope, utility or legitimacy. A Canadian energy framework must be a federal-provincial-territorial construct; the national interest must bear the imprimaturs of the federal, provincial and territorial governments.
Unfortunately, Canadians are far too quick to throw up their hands in despair at the prospects of intergovernmental cooperation, particularly when it comes to difficult policy files such as those relating to energy and climate policies, where jurisdictional competition is reinforced by the uneven distribution of resources. Too quickly we proclaim that “the provinces will never agree,” or that “Alberta and/or Quebec will never agree.” Fortunately, this is nonsense. Much of the policy architecture of the Canadian federal state has been built on a solid foundation of intergovernmental cooperation: health care, post-secondary education, social assistance, pensions, immigration, the Trans-Canada Highway and water management are all ready examples. To conclude that intergovernmental cooperation is impossible in the design of comprehensive policy frameworks is to deny our political history. It is defeatism in the face of a vast body of evidence to the contrary.
Now, admittedly, energy policy poses a particularly difficult intergovernmental challenge. Although Canada is richly endowed with energy resources, this endowment is unevenly distributed across the landscape, with provinces differing greatly with respect to their resource base, energy mix, patterns of production and consumption, and economic reliance on energy exports. These differences are further compounded by jurisdictional complexities within the provincial, territorial and federal governments. Responsibility for energy policy does not reside with a single government department that can then negotiate with its federal or provincial counterparts, but rather rests with a multitude of departments covering, at the very least, energy, the environment, finance, transportation and trade. Moreover, the importance of energy resources to the provincial and national economies means that first ministers seldom stray far from the energy file. Layered onto this intrajurisdictional complexity are semiautonomous regulatory agencies (e.g., the National Energy Board) and Crown corporations that bring their own responsibilities, processes and interests into play. Siting decisions engage local authorities and First Nations. In addition, the courts are increasingly active policy players. In short, energy policy is impossible to pigeonhole within single departments, much less single governments.
How, then, do we unlock this difficult situation? How do we realize potential policy gains? How do we create a Canadian energy framework?
Let’s begin by being blunt: provincial governments are unlikely to be the primary impediment, the villains of the piece. To date, they have been at least as engaged in energy policy development as has the Government of Canada, if not more so; Alberta, British Columbia, Ontario and Quebec are all examples. The provinces have also been very engaged in intergovernmental negotiations related to climate and energy policy with their provincial counterparts and American state governments; the Western Climate Initiative and the Western Energy Accord are but two examples. If anything, it is Ottawa that is coming late to the game.
The key to moving forward, therefore, is to find a way to bring the federal government to the table. Here, two basic issues must be addressed. First, is there indeed a role for the federal government in a Canadian energy framework? I note only my personal conviction that a persuasive case can be made for a federal government role in an integrated national energy framework with significant reach across the Canadian federal state. Such a framework would tap new efficiencies and strengths by reducing the costs, complexity and uncertainty for business, providing greater policy coherence at home and on the international stage and strengthening the contribution of the energy sector to Canadian economic prosperity while protecting the economic union from further policy fragmentation.
Admittedly, energy policy poses a particularly difficult intergovernmental challenge. Although Canada is richly endowed with energy resources, this endowment is unevenly distributed across the landscape, with provinces differing greatly with respect to their resource base, energy mix, patterns of production and consumption, and economic reliance on energy exports.
If we accept the need for a federal role, then the second issue is to sketch in what that role might be. What might be the terms of engagement for the federal government? Here we can draw from our vast intergovernmental experience, with the Canada Health Act providing a useful if not definitive model. The Act legislatively enshrines a set of principles relating to insured health services — public administration, comprehensiveness, universality, portability and accessibility — that the provinces and territories must follow in order to qualify for federal funding. Within that principled framework, and with only a few exceptions, health care delivery rests with the provincial and territorial governments.
Could we build a Canadian energy framework in a similar fashion, identifying overarching principles and then leaving their implementation to provincial and territorial governments? Could we agree on overarching principles while recognizing that their implementation must be flexible given provincial energy differences? A good place to begin in this respect is with the key pillars identified in the background paper for “Towards a National Clean Energy Strategy,” a conference held in April 2010 in Banff:
- a commitment to sustainable end use of energy
- a commitment to sustainable energy resource development, production and transportation
- a sustainable approach to energy and climate change
- an ongoing social licence to build and operate
- continuous improvement in capacity and capability
- a collaborative approach to intergovernmental engagement
In a fashion analogous to that underlying the Canada Health Act, could these principles, refined as necessary, provide a framework within which federal, provincial and territorial energy policy could be housed and developed? Certainly identifying those principles is not beyond our reach.
The Canada Health Act analogy brings a number of other considerations to the fore. In the past the Government of Canada has purchased interprovincial cooperation in many fields through conditional funding; the federal spending power has provided the means to avoid constraints arising from the constitutional division of powers, and thus has been an essential lubricant for intergovernmental collaboration. Could we embed similar incentives in a Canadian energy framework? If we envision some federal revenue generation through a national carbon tax or cap-and-trade system, it is possible that such revenue could be used in part to lubricate the intergovernmental gears of a Canadian energy strategy. It could also be used to pursue policy objectives and projects that might be beyond the reach of individual provincial governments, or are inherently transboundary in character.
Second, an important shortcoming of the Canada Health Act as a prototype for a Canadian energy framework is that the Act needs to accommodate a much smaller degree of interprovincial variation than would be the case for an energy policy framework. True, there are some provincial differences in preferences with respect to health care delivery, but a hip replacement in Nova Scotia is not radically different from one in Manitoba. In the case of energy policy, however, interprovincial differences in energy resources and interests are vast. It is therefore essential to recognize that any federal role, any national identification of overarching policy principles, must be able to accommodate very large provincial differences in energy resources and interests. It must accommodate both hydro and hydrocarbon economies, and thus there would have to be much greater accommodation of difference than the Act confronts.
At the end of the day we should not expect the same degree of coherence in energy policy as we find with respect to health care delivery. Provincial differences are simply too great, and any expectation of a one-size-fits-all policy framework should be discarded at the outset. However, it is not clear that we need the same degree of policy coherence in the energy field. We need a Canadian energy framework, but one within which differences in provincial circumstances can be accommodated. Just as the international negotiations on climate policy recognize the fundamental need to accommodate national differences in circumstance, so too must we recognize provincial and territorial differences in circumstance. But, and to draw further on the international experience, those differences do not preclude a reasonable modicum of policy integration, a common policy framework.
Perhaps we can find better models and analogies than the Canada Health Act from our vast reservoir of intergovernmental experience. Nevertheless, the point to stress is that we have a great deal of experience on which to draw. There is no reason to sell ourselves short, to assume that a Canadian energy framework is somehow beyond our reach. Although this is a big nut to crack, without such a common framework and policy language, our full energy potential will not be realized and international and continental commitments to carbon management will not be met. Although the task of constructing a modestly robust Canadian energy framework is admittedly very difficult, the risk is very real that without such a framework the larger national interest will be lost, that we will not become the “clean energy superpower” envisioned by Prime Minister Stephen Harper.
The bottom line is not that governments eschew cooperation, but rather that cooperation is difficult in a very complex federal state where provincial differences in interest are real, large and unavoidable. Indeed, policy coherence is sometimes difficult to achieve even within single jurisdictions. The point, then, is not to beat up on governments for insufficient cooperation, but rather to recognize the intrinsic difficulties they confront in this respect, and to contribute to developing and implementing constructive solutions.
A great deal of inertia exists within intergovernmental relations, making sweeping national policy initiatives difficult. Visionary is rarely an adjective used to describe intergovernmental relations, and even at its best the Canadian intergovernmental system is slow and cumbersome. Intergovernmental relations are rendered even more difficult by regionally unbalanced minority governments in Ottawa, and there is little prospect that this situation will change in the near future, even though the partisan composition of those governments may change.
This inertia leads to a difficult paradox. Although to this point the Government of Canada has displayed the most reluctance to “come to the table,” federal leadership is critically important. Experience teaches us that collaboration follows federal leadership, that it is difficult for the 13 provincial and territorial governments to act without a federal initiative to react to. Here, however, the Government of Canada needs some help, and a useful analogy is the signature line from the book and movie A Field of Dreams: “If you build it, they will come.” If the appropriate stadium can be built, if the appropriate policy blueprint can be designed, then governments might well come to play. The task of the nongovernmental sector is to create an expanded policy space, or solution space, and to demonstrate that policy initiatives for a Canadian energy framework can find a receptive audience. Nongovernmental actors can create a safe space within which policy options can be debated, and a principled framework within which that debate can take place.
A collaborative approach to intergovernmental engagement on the energy file is not beyond our reach despite the heavy sledding we will have to do if we are to achieve a degree of policy coherence that respects rather than overrides very real differences in provincial interests, and that avoids excessive centralization or one-size-fits-all policy prescriptions. There is simply too much at stake, and too much experience to suggest that while success may be elusive, it is not impossible.