Dissenting report from Conservatives wants to expand oil and gas, not transition it away

 

OTTAWA – Technology, not taxes, transformation, not transition – those were some of the themes brought up by the federal Conservative Party of Canada in its dissenting opinion on a “just transition.”

The House of Commons Standing Committee on Natural Resources Committee report released its “just transition” report on June 19. Entitled “Creating a Fair and Equitable Energy Transformation,” the report means to change Canada in almost every manner imaginable, from powering vehicles and heating homes, to largely winding down one of our nation’s largest industries – oil and gas.

Both the Conservatives and Bloc Quebecois released dissenting reports, while the Liberals and New Democrats supported the primary report. This is the Conservative response.

Shannon Stubbs, MP for Lakeland (the Alberta side of Lloydminster to Athabasca) is vice chair of the committee and Conservative Natural Resources critic. She tabled the Conservatives’ dissenting opinion, entitled, “The Unjust Transition: An Unnecessary Risk to Workers & Communities.”

That dissenting opinion started by saying, “The Liberal Just Transition plan is a dangerous government-mandated threat to kill 170,000 direct Canadian jobs, displace 450,000 workers directly and indirectly working in the energy sector, and risk the livelihoods of 2.7 million Canadian workers, negatively and disproportionately impact sectors, occupations and regions, disproportionately harm different provinces and communities, and drive up energy costs, while undermining energy security, for all Canadians.

“Environmental stewardship must be addressed with realistic, concrete, and effective measures. But this final report from the Natural Resources Committee ignores global realities of growing energy demand, scarcity and security, Canada’s place and potential as a natural resource exporter, and targets Canada’s oil and gas sector to be “transitioned” and shut down, rather than expanded and exported to help lower global emissions.

“Conservatives are unable to reconcile the final report’s recommendations with the realities of Canada’s energy sector, and oppose the damaging direction of the current Liberal government, expressed in this report.

“The reality is the world will continue to need and use oil and gas for decades to come, and major polluters like China and India, generate the vast majority of global emissions – and continue to fire up new coal plants (data from 2022).”

 

Outcome was predetermined, says critic

Pipeline Online spoke to Stubbs by phone from Ottawa on June 20. She said, “It became clear it was leading to an outcome that was already had been predetermined.”

Asked if the committee’s report was talking about essentially the elimination of the oil and gas industry, Stubbs replied, “You’re exactly right.

“This, the “just transition” proposals, supported by the NDP-Liberal coalition, is the end game of the prime minister’s early statements, which were the truth and a tell, rather than a gaffe or a slip, that he intended to accelerate the phase out of Canadian oil and gas.

“This concept of the just transition, and their recent bill, and their intention is to do exactly that. And it is more than that, in my view. It also indicates a fundamental challenge, or a challenge to the fundamental tenets of our Canadian economy. Their approach is anti-private sector, anti-free markets. It is, frankly, anti-innovation and technology, given that the oil and gas sector is, by far, the largest private sector investor in clean tech in Canada, more than all other sectors of the Canadian economy combined. And exactly as you have articulated, yes, it’s a plan to accelerate the shutdown of Canada’s largest private sector investor in the economy and top exports, even though they have incrementally, of course, done their level best over the past eight years to shut it down, and indeed, have done so much damage.”

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No alternatives

Did Stubbs see any alternatives offered in the report for the jobs that would be lost, such as work in industry X or Y?

Stubbs said, “That is the issue that all Canadians should be very concerned about. Frankly, what is known is that this is a direct threat to the more than 100,000 Canadians directly employed in the oil and gas sector. It is a threat, also, to 450,000 workers that are in indirect employment in the energy sector, and will risk the livelihoods of 2.7 million Canadian workers across a whole number of sectors that, of course, are dependent on a thriving energy sector.

“And so, what the NDP-Liberals cannot answer is how those jobs will be replaced, from what sectors. And the truth is that whatever jobs they imagine the government can somehow centrally plan to create will certainly not be the same reliable, well-paying jobs that the energy sector provides, which, by the way in the Canadian context, in Canadian oil and gas, are already sustainable.”

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Coal transition model panned

The Conservative dissenting opinions refers to the recent and ongoing coal transition as a “failed Liberal experiment.” And that transition for coal miners and power generation staff was cited as a possible model for oil and gas by the committee’s report, except that the report said the government should actually follow through with several of the coal transition plans that were never carried out.

The Conservatives said, “In 2017, the Liberals accelerated the timeline for the forced shutdown of coal operations in communities in Alberta, Saskatchewan, New Brunswick, and Nova Scotia, which cost the jobs of 3,000 workers across the four provinces. The promised “Just Transition” did not materialize. Despite spending $150 million dollars, jobs were not replaced and communities were devastated, with municipal representatives worried local governments will not be able to afford to keep the water running and town services operational much longer.”

 

The Conservatives referred to an auditor general report, saying:

First, it took four years after the announcement for the lead department, Natural Resources Canada (NRCan), to start taking any action.

Second, NRCan didn’t actually implement a plan. The Commissioner reported “it did not establish a governance structure that would set out the related federal roles, responsibilities, and accountabilities,” and it did not “have an implementation plan to address a transition that involves a variety of workers, geographies, and federal and other stakeholders.”18

Third, impacted workers were not identified in advance, and 86% of the workforce were left behind with generic, untargeted, and unhelpful programs.

Fourth, none of the recommendations of the ‘Task Force’ that was set up to give recommendations were implemented.

And finally, all of the government departments that were supposed to monitor and report on the status of activities, and measure that whether projects actually helped communities, didn’t report and couldn’t determine whether or not the $150 million in taxpayer money actually did anything.

The Liberals’ “Just Transition” for coal was a perfect and expensive failure trifecta: a failure to plan their plan, a failure to implement their plan, and a failure to measure their plan’s outcomes.

The Conservatives quoted a witness who said, “that the coal transition’s problem was that ‘people didn’t want temporary handouts; they wanted another job.’”

“The reality is that temporary handouts are all that’s really offered by the plans to shut down the economic lifeblood of many communities, like the failure and broken promises of the coal transition that is reasonably expected to be the outcome of the current “Just Transition” plan, and that funding tap runs dry just a few years later.

“Left behind are dozens of communities and thousands of workers and their families, who now have to make new lives for themselves, because far away and out of touch politicians and program administrators implemented an accelerated plan to fire these hardworking Canadians, and make their communities ghost towns,” the Conservative dissenting opinion said.

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Central planning

Asked where report says the money, currently invested in energy, will come from to create different jobs, Stubbs replied, “That’s what the NDP liberals should tell Canadians. And the truth is they can’t.

“So the consequences in the long run of all of this, symbolized by this bill, and by this wrongheaded thinking among the NDP-Liberals in the committee, is really an attempt to move to a top down, central planning of the economy. And all the issues that you’re raising are issues that they can’t account for.

“They can’t and won’t account for where all that investment in innovation in clean tech is going to come from instead, if it’s not coming from the energy sector. They can’t account where the $20 billion a year average annual tax revenue coming from the energy sector to all levels of government, $20 billion, or up to $48 billion last year, for example. They can’t and won’t explain where that revenue to all levels of government is going to come from or be replaced, or what it will be replaced with.

“And the consequences will be to exacerbate their already massive damage as a result of their anti-energy policies that have made it so Canada cannot compete. And it held Canada back, both from ensuring our own energy self-sufficiency and security, but also from exporting our products and our technology to allies and to developing countries.

“And so, Canadians, I hope, will see this for what it really is. It is not a good faith altruistic, government-funded skills and jobs training program. It is actually about a top-down centralized government attempt to turn to turn the economy on its head without being able to account for any of what will be the drastic consequences in Canadians’ live,” Stubbs said.

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Conservatives want to expand, not curtail, energy sector

As for the Conservatives’ alternative solution, she said, “What Conservatives will do is set the investment conditions to attract and increase foreign and domestic investment, to cut red tape duplication. Cut taxes, obviously, maintain world-class standards of which all Canadian oil and gas workers and companies are proud of and have a world class unmatched track record of both standards and performance. And so actually, in our view, the Canadian government’s approach should be to foster the expansion of the Canadian energy sector, so that we can provide for our own needs, and also provide and also be the supplier of choice around the world. That’s an important contribution that Canada can and should make, but it is the NDP-Liberal coalition that is holding Canadians back.”

 

Non-renewable resources factors heavily into the federal equalization program. All the “have” provinces save Ontario have substantial oil and gas sectors, including Alberta, British Columbia, Saskatchewan and even Newfoundland and Labrador. Asked if we got rid of the oil and gas sector, who would pay the bills for equalization, Stubbs replied, “This is why every Canadian in every region, community and province of the country should be concerned about this anti-energy agenda. And it’s a part of what we all have to do, working together, to ensure that all Canadians know the impact and the contributions of the sector, in their own communities and exactly as you’ve pointed out, providing the lion’s share of revenue that is shared across the country for roughly similar programs and services in every corner.

“The truth is that this policy also, of course, will target and disproportionately harm provinces like Alberta and Saskatchewan, Newfoundland and Labrador, New Brunswick, parts of BC. And frankly, it is also a pattern of the NDP-Liberals policies, (which) disproportionately harm rural and remote and importantly, indigenous communities and businesses, who are all in areas where either the natural resources sector, as a whole, and often oil and gas in particular, are among the very few and sometimes, only paths for jobs and economic opportunities,” she said.

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Doubling or tripling the electrical grid

The committee report references the need to double or even triple the generation capacity of the electrical grid by 2050, something that was also referenced in this past spring’s federal budget. But it also notes federal efforts to eliminate fossil fuel-fired power generation by 2035, just 12 years from now. Pipeline Online has repeatedly reported instances of where Saskatchewan’s power was 84 per cent from coal and natural gas, and Alberta’s was 90 per cent, most of which was natural gas. Asked how the grid could be doubled or tripled without natural gas power generation, she replied, “That is exactly what Canadians should be asking the federal government to answer, and to explain. The estimates of what it would take to do what the Liberals are seeing will be achieved in the timeline they say it will be achieved are totally unrealistic and punitive. And they still, right now, can’t account for who will be paying for it, and how this will all unfold.”

The Conservatives point out “Alberta itself was the first jurisdiction in North America to impose a major industrial emitters levy that targeted the funds to innovation and clean technology; has the largest clean technology carbon capture project in the world; is home to the first facility in the world that turned municipal trash into biofuel; and had the world’s first 100% renewable LRT, and the oldest and largest commercial solar and wind farms in Canada.”

 

Labour asked, oil businesses, not so much

Stubbs pointed out that while there was lots of involvement from labour in the development of this proposal, that wasn’t the case with the actual businesses involved. “Very noticeable is that this completely excludes the 92 per cent of Canadian oil and gas companies who have fewer than 100 employees, and a third of those have fewer than five.”

She noted the biggest source of new union jobs is the energy sector new projects or expansions that are going on in certain regions right now.

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Conclusion

She said, “Conservatives want to see the Canadian energy sector expand and thrive. We want, if there is ever a day where the last barrel of oil is used, which doesn’t seem likely by any realistic or feasible assessment of the of the near or even longer-term future, that barrel should come from Canada.

“And Conservatives know the private sector investment and contribution, innovation and clean tech and technology. So, what Conservatives would do with set those attractive investment conditions and help so therefore, help to allow the energy sector to continue the energy evolution that is already leading. This is what is so mind boggling about the NDP-Liberals’ approach to the sector, because the energy sector has always and is on the cutting edge of R&D and technological development and innovation.”

The Conservative dissenting opinion concludes, “The Liberals’ Just Transition must be taken in context of all the cost-increasing measures they impose on Canadians – their carbon tax, their second carbon tax (fuel regulations), methane regulations, electricity standards – the list goes on. These policies will increase the cost of living for every Canadian and kill Canadian jobs and communities; they will risk the economic activity, jobs, and tax revenue to all levels of government of Canada’s largest sector; and they will jeopardize the reliable, affordable, and abundant energy that Canadians need every day.

“This report attacks Canada’s energy industry, rather than examining practical ways and timelines for grid decarbonization without jeopardizing the economy and Canadians’ standard of living. Instead of focusing on actual solutions, this report is designed to prop up the Liberal political approach and silence any dissenting opinions.

“Canadians in communities like Hannah, AB, Estevan and Coronach, SK, or Belledune, NB, know that talk is cheap, and NDP-Liberal action destroys their communities.”

 

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