Prime Minister Justin Trudeau’s Liberal government vowed to make Canada a world leader in clean technology in Wednesday’s speech from the throne, calling climate action a cornerstone of its plan to create millions of jobs as COVID-19 continues to threaten the economy. Absent were direct references to oil and gas, a sector that’s suffered a historic demand shock on top of the broader stresses of the global pandemic.
Rising cases of the novel coronavirus prompted the Liberals to pump the breaks on a promised “ambitious green agenda” in favour of greater focus on navigating the country through a potential second wave.
For the most part, the government repeated existing climate commitments. New additions included plans for a fund to spur investment in manufacturing zero-emissions products, a 50 per cent cut to the corporate tax rate for companies creating jobs in clean tech, and plans to put its goal of net-zero emissions by 2050 into legislation.
The government said it will “support [the] manufacturing, natural resource and energy sectors as they work to transform to meet a net zero future, creating good-paying and long-lasting jobs.” However, the words “oil” and “gas” were nowhere to be found in the nearly one hour speech by Gov. Gen. Julie Payette.
“There was a lot of talk of energy workers and natural resources, but [they’re] definitely avoiding the ‘O-word,’” said Rory Johnston, managing director and market economist at Price Street. “I don’t think the story with oil writ-large is necessarily a positive one right now for this government.”
Jason Kenney reacts to the throne speech
Alberta Premier Jason Kenney also picked up on the omission, noting “not one word recognized the crisis facing Canada’s largest industry” in his response to Wednesday’s speech. He referred to new data from Statistics Canada showing the “steepest decline ever recorded” in natural resource sector employment in the second quarter, amounting to the loss of nearly 43,000 jobs, as evidence that Ottawa needs to do more for the energy patch.
Others were glad the government did not pay lip service to propping up carbon-intensive energy production. Tom Rand, managing partner at the clean tech venture capital fund ArcTurn Ventures, said the sector itself is recognizing its looming obsolescence. He points to the trend of major oil companies investing in alternative energy and paring back exposure to conventional drilling and refining.
Last week, BP (BP) predicted oil consumption may never return to levels seen before the coronavirus crisis took hold. On Thursday, French oil giant Total SE (TOT) announced it will spend US$582 million by 2024 replacing its Paris-area facility with renewable-fuel and bioplastic plants.
“They know they’re in a sunset industry,” Rand said.
His main critique of the government’s messaging on Wednesday is that it wasn’t forceful enough. Given the massive financial support for the private sector that Ottawa rolled out in response to COVID-19, he believes private businesses of all types should be forced to back government efforts to green the economy.
“I want to see Trudeau start to twist some arms,” Rand said. “I’d like to see a more muscular approach, saying to the private sector, ‘We saved your butt. You’re going to have to be more aggressive about being a partner on this [green] transition than you are today.’”
On the government’s commitment to add legislation to its net-zero by 2050 objective, he wants to see five-year milestones set in order to track progress. He’s anxiously awaiting the federal budget to see how Ottawa’s commitments will translate into dollars and cents.
“After the next budget, there is nothing left in the cupboard for the next decade,” he said. “The public sector will be totally broke.”
Isabelle Turcotte, director of federal policy at the Pembina Institute, said she was relieved to see the government broadly stick to its climate agenda in the face of the COVID-19 threat. Like Rand, she’s glad the “O-word” did not make it into Wednesday’s speech.
“This moment is about making a down payment for a reliant economy,” she said. “We’re happy to not see any additional or direct support for the oil and gas sector in terms of money without strings attached.”
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.