Canada is not an economic giant when compared with other global energy producers, but we compete head to head with the world’s energy leaders in the marketplace. Canada is one of the few countries in the world where the energy industry is led by the private sector and the government is not generally involved or a leading player through nationalized initiatives. Attempts to modify or create policy in the energy sector require total integration and consideration of most other federal and provincial government economic policy initiatives. Anything other than a whole-of-government approach to energy policy puts our country at a disadvantage in the global marketplace.
In October 2017, Jim Carr, the Minister of Natural Resources, hosted a forum in Winnipeg as part of a long series of consultations on Canada’s energy future. Generation Energy: Moving Canada Forward is a process initiated and guided by Natural Resources Canada that seeks the opinions of everyday Canadians, regional and demographic stakeholders and diverse economic interests in Canada’s energy sector. The engagement of industry and stakeholders is a good thing. Given Canada’s division of powers, the involvement of provincial governments is also essential. The Generation Energy process has highlighted the enormous task ahead for Canada.
According to Carr, the 2015 provincial and territorial Canadian Energy Strategy is the road map for our country. The largely undeveloped strategy outlines three themes: “sustainability and conservation, technology and innovation, and delivering energy to people.” The federal government will need to encourage and engage with the provinces and territories to develop a robust and inclusive strategy for the long term that addresses these themes.
Complicating matters further in the context of Generation Energy is strong global economic growth powered by populous countries like China and India. Are state-owned energy enterprises skewing the international marketplace for energy and putting Canada at a further disadvantage by investing large sums in industry? According to the World Bank, China’s GDP growth in 2015 was 6.4 percent and India’s was 6.3 percent. According to reports from the China Europe International Business School and HSBC India, state-owned fixed investment in both countries was up year over year and private sector investment was down.
At the same time, there is increasing international pressure on industry and individual energy users to reduce carbon emissions. This drive has the potential to constrain investment and limit the expansion in the energy sector that Canada has become accustomed to. It is too soon to gauge the economic impact of Canada’s efforts to price carbon.
If Canada wants to make the most of its energy sector, it must engage in a brutally honest and wide-ranging national economic conversation.
Meanwhile, in Ontario, consumers have forced the end of some government incentives promoting green energy due to the exponential growth in household electricity costs that these programs caused. The second phase of the Large Renewable Procurement Program, worth approximately $4 billion, was suspended, and feed-in tariffs have ended. It appears consumers are not ready to pay more to support alternative energy sources through their own electricity bills.
So where does Canada take energy conversation next? If Canada wants to make the most of its energy sector, it must engage in a brutally honest and wide-ranging national economic conversation that breaks out of the confines of Natural Resources Canada and addresses a full range of policies for skills training and human resources, taxation, trade and industry. Generation Energy is a good start, but continued action is required.
- We must talk about Canada’s education system from a national perspective, working to link skills shortages with skills training in our economy. Do universities, colleges, polytechnics and private trainers have the information from industry they need to plan for future skill shortages? Canada must improve coordination between industry and the education system to increase participation in and completion of apprenticeships in every province and territory. According to a recent Statistics Canada report, about two-thirds of unfilled jobs in Canada require a high school diploma, while almost 50 percent of unemployed persons have a post-secondary education.
- We must talk about new investment in infrastructure for electrifying transportation, as well as in connecting Canada’s electricity grids and provincial markets to each other. With more flexibility to move electricity between jurisdictions at predictable prices, industries can plan new projects with more certainty, in remote regions as well as built-up areas.
- We must talk about a renewed, modern and more flexible regulatory regime for nuclear energy that exceeds community safety standards but also respects the possibility of bringing new kinds of reactors onto the market for electricity generation or industrial applications. They could allow remote communities to decrease reliance on diesel fuel for power and at the same time provide electricity for future economic endeavours. The oil sands could decarbonize by removing fossil fuels like natural gas from their feedstock.
- We must talk about building codes that promote energy efficiency but do not put the cost of home ownership out of reach for most middle-class Canadians. New and existing high-density residential buildings could be retrofitted with innovative insulation and heat systems, while new single-family homes could incorporate renewable-energy generation into their original designs when feasible. We need to ensure that homeowners have access to adequate financing for efficiency retrofits or the purchase of new, more expensive and efficient homes.
- We must ensure a predictable operating environment for Canada’s oil and gas sector. The decarbonization of the industry shouldn’t come at the expense of stability and investment. The oil and gas sector (and related construction and maintenance activity) employs more than 400,000 middle-class Canadians.
- We must get serious about continuing the conversation with Canada’s Indigenous peoples and ensure meaningful participation in the labour force for Canada’s fastest-growing demographic group. Governments and the private sector have the opportunity to choose who makes up the workforce of the future through training opportunities and corporate policies. A balanced, customized approach to providing education, essential skills and labour mobility measures is required for success.
The outcome of the conversation — if we choose to have it — will be a world-class strategy and extraordinary returns for Canadians well beyond the oil patch. We can achieve inclusive growth that keeps us highly competitive in the global energy marketplace.
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