Last week, Prime Minister Mark Carney took another swing against climate action when he announced a pause and review of the EV sales mandate, and all eyes are on whether more climate policy will be on the chopping block, as the Liberal caucus meets this week in Edmonton.
Federal officials are preparing a climate strategy, Carney teased Friday, which will mark the prime minister’s first foray into detailing his government’s plan to cut emissions. The announcement comes at the same time Ottawa embarks on a massive “nation-building” agenda that he suggested could result in a wave of new fossil fuel infrastructure .
According to sources familiar with its development, the “Canada Climate Competitiveness Strategy,” is scheduled to be released this fall on the heels of a stocktaking exercise carried out by the Privy Council Office (PCO). The office developed a list of emissions reduction policies, detailing their cost and greenhouse gas emission reduction potential, sources say.
Dominic LeBlanc, president of the PCO, was not made available for an interview and his office passed questions posed by Canada’s National Observer to PCO officials for response. But PCO officials passed the request to Environment and Climate Change Canada, which did not respond to a deadline extension offered by CNO.
Some government sources, granted anonymity by Canada’s National Observer to discuss the plans, expect the industrial carbon price and methane regulations to be strengthened, and Carney to hold the line on clean electricity and clean fuel regulations. The proposed cap on oil and gas emissions, on the other hand, appears the most vulnerable.
Between repealing the consumer carbon price, pausing the EV sales mandate, and potentially dropping the proposed oil and gas emissions cap, concerns are mounting that Canada will fail to reach its legally binding emission targets to slash 40 to 45 per cent of emissions by 2030 and 45 to 50 per cent by 2035 from 2005 levels.
Industry Minister Melanie Joly deflected questions about whether those targets are here to stay in a recent interview with CTV, while Environment and Climate Change Minister Julie Dabrusin said the government is committed to its net-zero by 2050 target and plans to provide an “update” to its interim targets.
Carney hinted he’ll soon release a ‘climate competitiveness strategy’ that insiders expect will boost industrial carbon pricing while cutting other emission reduction policies, echoing previously failed attempts at striking a grand bargain.
“Canada has made significant progress in putting the foundational policies in place to bend the emissions curve,” said Keean Nembhard, press secretary to Dabrusin, in a statement. “Taking into account the evolving global and economic context, the federal government will provide an update on its emissions reductions plan as we strive towards our 2030 and 2035 targets.”
Outdated ideas
Keith Stewart, senior strategist with Greenpeace Canada, said it’s difficult to know just how out of reach the 2030 and 2035 targets are currently because it’s possible that scrapped policies could be replaced with new measures. However, he warned the focus on striking grand bargains over fossil fuel development, that could see policies like the proposed emissions cap axed in exchange for stronger industrial carbon pricing, won’t lead to a lasting truce.
The proposed cap on oil and gas emissions is a cap and trade system, meaning a ceiling for emissions is put in place that allows a certain amount of pollution to occur. As the cap is tightened, companies would be obligated to cut their emissions or buy credits from companies that do. An industrial carbon price, on the other hand, does not impose a ceiling, but does put a dollar figure on each tonne of pollution that increases each year, offering incentive to companies to lower emissions.
“The problem there is [stronger industrial carbon pricing is] not going to be enough,” Stewart said. “The oil industry’s end game is to get the federal government out of pricing and regulating carbon and have them leave it to the provinces.”
Relying on an industrial carbon price requires cooperating with provinces. In Canada, provinces and territories have first crack at designing their own carbon-pricing systems that meet a federal benchmark, meaning the federal carbon price is a backstop policy. But it has been controversial. Alberta Premier Danielle Smith froze the industrial price with no plans to resume its scheduled increase in May, Saskatchewan Premier Scott Moe decided to simply not collect the industrial carbon price, and Conservative Party Leader Pierre Poilievre said he would repeal the policy entirely. In other words, Carney’s decision to rely on it further is a risky bet, Stewart said.
“If you’re doubling down on a policy that requires the cooperation of the provinces, and the two major petroprovinces aren’t cooperating right now, why do you think they’ll cooperate on a stronger one?” he said.
Framing the climate strategy as a “competitiveness” strategy underscores Carney’s long-held belief that managing the risks posed by climate change are of the utmost importance to financial institutions and investors. But it also hints at the more industry-friendly side of Carney that has dominated since he was elected prime minister. Carney has spent months discussing the potential to develop billions of dollars’ worth of new fossil fuel infrastructure, from pipelines to LNG export terminals — an economic strategy firmly at odds with climate science and international energy forecasts.
Laura Tozer, an assistant professor at the University of Toronto who researches energy transition issues, said Carney’s decision to backslide on the EV sales mandate and appoint Dawn Farrell, CEO of Trans Mountain, to lead his Major Projects Office are worrying signs that the prime minister is working with an “outdated idea” on what economic competitiveness means.
“Competitiveness internationally means participating in the sustainable energy transition,” she said. “What we should be trying to do is leading by going where the puck is going, and that takes a rejection of [fossil fuels] that has been a key part of Canadian politics for so long.”
Economic competitiveness won’t be achieved by trying to be both a clean and fossil fuel energy superpower, the way Carney has pitched, she said.
“That’s a losing idea. It undercuts any kind of gains you’d get from sustainable energy investments… and sinks more losses into fossil fuel infrastructure.”
Lobbying influence
The climate strategy does not have a firm timeline for public release, but the upcoming first tranche of major projects is set to come out this week.
The first batch of projects is widely expected to focus on port infrastructure and projects considered by federal officials to be “stuck” in the regulatory process, which could include new fossil fuel projects, such as LNG Canada Phase 2 and Cedar LNG. Some climate advocates see the climate strategy as a way for Carney to distract from a list of major projects that could worsen climate change.
The climate strategy may also be a way for Carney’s government to preview measures that will be funded in the upcoming federal budget — when close political observers expect so-called grand bargains to be revealed.
It is not yet known what exactly will be in the plan, but the Liberal election platform promised a range of climate measures, including building an east-west electricity grid; boosting the Development Finance Institute Canada’s lending capacity to invest in emission-reducing infrastructure; changes to industrial carbon pricing; prioritizing sustainable building materials and energy efficiency in government buildings; adopting carbon tariffs and contracts that guarantee a certain price on carbon; and requiring climate risk disclosures for companies, among other policies.
Despite making these promises, little has been publicly acknowledged to date about their progress.
Typically, as a climate strategy is developed, federal officials are lobbied by climate advocacy groups and the fossil fuel industry — each trying to pull policies in their preferred direction.
Canada’s National Observer combed through federal lobbying records from 10 of the largest environmental groups since the federal election, and could only identify one (Clean Prosperity) that has managed to score meetings with the Prime Minister’s Office (PMO) staff — and none that met with Carney directly.
Of the 10 environmental NGOs analyzed (WWF Canada, Environmental Defence, David Suzuki Foundation, Nature Conservancy of Canada, Nature Canada, Climate Action Network Canada, Pembina Institute, International Institute for Sustainable Development, Canadian Climate Institute and Canadians for Clean Prosperity), at least 102 meetings with federal officials were recorded, compared to three meetings with policy advisors at the PMO.
Over that same period, 10 of the largest oil and gas companies and their lobbying organizations (Suncor, MEG, Imperial Oil, Cenovus, ConocoPhillips, Enbridge, TC Energy, the Canadian Association of Petroleum Producers (CAPP) and the Pathways Alliance) recorded at least 138 meetings — 18 of which with PMO officials. That’s more total meetings than days since the federal election.
Oil and gas companies have also met with Carney directly. On April 30, days after being elected, Carney met with Suncor, according to the registry. On June 1, Carney met with several CEOs of multiple oil and gas companies, including Imperial Oil, Enbridge, the Pathways Alliance and CAPP. And on June 20, Carney met with TC Energy.
The federal lobbyist registry only records meetings initiated by the companies, not meetings initiated by government officials, so all meetings identified are likely an undercount. The registry also does not include details of precisely what was discussed at each meeting.
Still, the pace of meetings is an indication of the significant lobbying effort afoot.
“I can’t think of any worse way to make a climate plan than to consult with the oil and gas companies,” Tozer said. “We have extensive research showing ways that fossil fuel companies have delayed and destroyed our climate action.
“It’s such a shame if that’s what’s shaping this climate plan, when there are so many good ideas across Canada about how climate action can advance our economic competitiveness.”
For some climate advocates, there is a pervasive feeling of being shut out from the PMO — a sharp contrast to when Carney first became prime minister in March and met with leading climate groups the morning before he announced he would officially repeal the consumer carbon price.
“The Carney government has really opened the door to corporate lobbyists,” Stewart said. “It’s not clear to me if they just think they can take the environmental constituency for granted, or if they’re actively avoiding us until they come up with their plan for what they’re going to do.
“But it’s been hard for environmental groups to get meetings with real decision-makers.”