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Canada’s Coercive Diplomacy: How the Liberals Impose the Woke Agenda on Developing Countries

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From the C2C Journal

By Anna Farrow
When – or perhaps if – Canadians think about “foreign aid”, they probably imagine idealistic aid workers treating patients in a remote health clinic, a technical expert designing a new bridge or perhaps an academic offering advice on operating fair courts of law. But these are all being pushed into the background as ideology takes over the planning and provision of Canada’s foreign assistance programs. Not only have bridges and tractors given way to morning-after pills and wind turbines, but aid programs are being shaped to serve only certain kinds of people. The kinds Liberals like. Anna Farrow charts the radical remaking of foreign assistance in which Canada uses foreign aid to interfere in the domestic politics and local cultures of recipient countries, turning the mild-mannered middle power into a practitioner of coercive diplomacy and cultural imperialism – arguably even neo-colonialism.

“Far from deploying Canadian aid workers to African countries to listen, learn and craft policies that promote development in line with local goals and aspirations,” Mulroney said in an e-mail interview, “Canada simply transfers funds to its likeminded partners in multilateral organizations, progressive foundations, and the big abortion providers like Planned Parenthood.”

Climate, contraception and the queer-nexus. This unlikely triad of foreign assistance priorities has become the face of Canada in the developing world. Foreign policy – and how Canada applies it on the world stage – usually receives scant public attention. Amid the current array of domestic troubles – cost of living, housing crisis, urban blight, opioid overdoses, revolving-door criminal justice – it is hard to excite voters about how Canadian taxes are being used overseas.
Spectacular fiascos: Canada’s “front end” international reputation has been in decline throughout the Liberals’ nine years in office – thanks to, among other incidents, Prime Minister Justin Trudeau’s odd sartorial decisions during his 2018 visit to India (top), Canada’s disintegrating military (middle), and the foreign policy establishment’s failure to secure a seat on the United Nations Security Council in 2020 (bottom). But what happens in the “back end” – like foreign aid – is equally important. (Sources of photos: (top) The Canadian Press/Sean Kilpatrick; (middle) Canadian Army; (bottom) IAEA Imagebank, licensed under CC BY 2.0)

When foreign affairs do get noticed, typically the front-facing actions of the prime minister, foreign affairs minister or defence minister are scrutinized. And why not, since it’s a target-rich environment, with Canada experiencing some spectacular failures over the Liberals’ nine years in office. In 2020, after an intense and costly push, Canada failed to secure a seat on the United Nations Security Council that its foreign policy establishment had long craved. A year later, Canada was left out of AUKUS, a new defence and security pact among the United States, United Kingdom and Australia intended to counter China’s expansionism. Just last month, 23 U.S. senators from both parties issued a letter deeply critical of Canada’s parsimonious defence spending. And then there’s the symbolic damage wrought by Canada’s performative prime minister, such as his cringeworthy decision on a 2018 state visit to India to dress himself and his family in traditional Indian wedding garb.

A largely unexamined though arguably even more important feature of foreign policy, however, is the back end, the foreign assistance administered and funded through Global Affairs Canada. Under the Justin Trudeau government, assistance diplomacy has been transformed – and in ways at least as worrisome and damaging as the more high-profile examples cited above.

The words “development assistance” probably conjure up images of Canadian specialists overseeing the provision of clean water in dirt-poor rural areas, conducting immunizations of vulnerable children, building roads, planning much-needed energy infrastructure in regions that still use dung fires and candle-light, constructing new schools, fighting forest fires, or organizing and staffing colleges that turn out agronomists, foresters, hydrologists, engineers and so on. In other words, doing the things needed to, first, address crises that are killing people and shortening lives, and second, providing poor countries the tools needed to lift themselves out of poverty over the long term.

But if these were ever the priorities, they have been deliberately cast aside. In 2017, then Foreign Minister Chrystia Freeland and Minister of International Development Marie-Claude Bibeau produced a 77-page policy document, Canada’s Feminist International Assistance Policy. The paper is explicitly calibrated to the United Nations-sponsored Transforming our world: the 2030 Agenda for Sustainable Development. The Agenda, a multilateral agreement signed by Canada in 2015, describes itself as “a global blueprint…to achieve gender equality, reach net zero emissions, halt and reverse nature loss, build resilient and inclusive societies and economies, and make sure everyone has access to quality education and health care.”

Sharing whose “values”? Canada’s Feminist International Assistance Policy, unveiled in 2017 by then Foreign Minister Chrystia Freeland (left) and Minister of International Development Marie-Claude Bibeau (right), places “the right to access safe and legal abortions” “at the core” of Canada’s foreign policy, accompanied by a $14-billion budget over a 10-year period. (Sources of photos: (left) OEA-OAS, licensed under CC BY-NC-ND 2.0; (right) The Canadian Press/Adrian Wyld)

Like the 2030 Agenda, Canada’s Feminist Foreign Policy advocates an “intersectionality” that ties together climate action and feminism. Bibeau described it as a “new vision for international assistance” and proclaimed that Canada should play “a leading international role.” In her preface to the document, Freeland wrote that, “Canadians are safer and more prosperous when more of the world shares our values.” For the average Canadian, the word “values” probably brings to mind things like a commitment to democracy, individual equality, tolerance of minorities and religions, or being left at liberty to pursue a livelihood and build a family. But those are apparently not the most important values of the people who plan and implement Canada’s foreign assistance effort.

Freeland performed a nifty conceptual shuffle by moving from the innocuous statement that “women’s rights are human rights” to an explication that those rights include “sexual and reproductive rights – and the right to access safe and legal abortions,” and then to the pronouncement that, “These rights are at the core of our foreign policy.” In Freeland’s world Canadian “values” – and the values Canada seeks to transmit to other countries – are focused in very particular areas and skew towards a particular end of the ideological spectrum. Whatever your view is on contraception and abortion rights, the idea that sexual and reproductive “health and rights” are top-tier Canadian values, should drive foreign assistance funding and lie at the “core” of the nation’s foreign policy should surely all be matters for serious public scrutiny and debate.

The money was fairly quick to follow the policy directives flowing from the 2017 paper. In 2019, Trudeau announced that Canada would spend $14 billion to “support women and girls’ health around the world”, with half of the funds earmarked for sexual and reproductive health and rights. The funding envelope was to extend for 10 years. The $1.4 billion per year represents 9 percent of the approximately $16 billion Canada spent on foreign assistance in fiscal 2023 and 79 percent of the amount allocated to health. The Liberals’ most recent budget includes a further $4.2 billion over six years for the provision of contraception and abortion globally. This funding was included in the section of the budget document entitled “Upholding Canadian Values Around the World.”

It appears the ideological commitment to what is always termed “modern contraception” and abortion as the tickets to women’s freedom and economic independence precedes engagement with the countries in which Global Affairs is involved. David Mulroney, Canada’s former ambassador to China under Prime Minister Stephen Harper, has consistently hammered away at this point. “Far from deploying Canadian aid workers to African countries to listen, learn and craft policies that promote development in line with local goals and aspirations,” Mulroney said in an e-mail interview, “Canada simply transfers funds to its likeminded partners in multilateral organizations, progressive foundations, and the big abortion providers like Planned Parenthood.”

Billion-dollar business: A foreign aid effort that once focused on roads, bridges, immunization and schooling – and did not discriminate among favoured identity groups – now lavishes billions of dollars on sex-ed, contraception and abortion – couched euphemistically as support for “women and girls’ health around the world”. (*Sexual and reproductive health and rights.) (Source of graph: Global Affairs Canada)

In many cases, Global Affairs is not doing the development work but outsources it to agenda-driven, left-leaning non-governmental organizations (NGO) whose missions align with that of the current government. A quick search of the government grant site gets 48 hits on the keywords “Planned Parenthood”. Many of these are smaller grants to local Planned Parenthood Canada offices through the government’s Summer Jobs program, but the search shows that close to $78 million has been provided to International Planned Parenthood or Action Canada through Global Affairs programming.

Given the level of funding that many of these organizations receive, and the close ideological affinity between the two parties, they cross the line from NGO to QUANGO, or quasi-non-governmental organization (better terms might be “pseudo-governmental organization” or “government proxy”). One example is Action Canada for Sexual Health and Rights, also known as Planned Parenthood Canada. The organization disclosed in its 2022-2023 financial statements that close to 60 per cent of its annual funding is derived from government sources.

Global Affairs Canada delegates much of the program implementation to like-minded organizations such as Planned Parenthood, whose Canadian program funding is used to produce sex-ed (top) and school learning material with explicit (and wildly promotional) sexual content, and whose international branches distribute similar material in developing countries.

Much of the program funding is designated for sex-ed, which is couched in grant-writing language as a matter of access to reproductive rights. But the curriculum developed for these subsidized programs is not comprised of straightforward biology lessons with age-appropriate information about available forms of contraception. The keyword is “comprehensive” sexual education (CSE), which follows a “pleasure-based” methodology. The “right” to sexual pleasure – to “satisfy yourself”, as a Zambian government document aimed at children puts it – is now one of the reproductive rights children are being taught they are entitled to.

In 2020, Global Affairs funded a four-year, $11 million project with Action Canada and the International Planned Parenthood Federation entitled “Rights from the Start” that targeted four South American countries: Ecuador, Bolivia, Guyana and Peru. To take a few selected development indicators, less than 20 percent of Ecuador’s road system is paved. The average life expectancy in Bolivia was 63.6 years in 2021 – and falling. Guyana’s was slightly higher – but also falling. Peru ranks 129th worldwide in the number of motor vehicles per capita.

Coercive diplomacy in action: Canada’s “Rights from the Start” project pushes unrestricted abortion access along with “gender equality outcomes” in Ecuador, Bolivia, Guyana and Peru – countries where abortion is illegal or severely restricted and opposed by large proportions of the population. Shown, anti-abortion demonstrations in Quito, Ecuador (top) and La Paz, Bolivia (bottom). (Sources of photos: (top) AP Photo/Dolores Ochoa; (bottom) AP Photo/Juan Karita)

But these nuts and bolts issues aren’t of any concern to the Action Canada project, which instead lists a number of expected “gender equality outcomes”, including the “strengthened capacity of partner organizations to develop and implement advocacy plans for the fulfilment of human rights comprehensive sexuality education.”

Abortion, interestingly, is illegal in Ecuador, Bolivia and Peru, except for cases of rape, incest or endangerment to the mother’s life, and illegal after eight weeks’ gestation in Guyana. It is not a big leap to conclude that the choice of those four countries upon which to push unrestricted abortion is not accidental and that Global Affairs is essentially funding an activist group to lobby a foreign government to effect legal and political changes there. Whatever one thinks of abortion and how freely available it should be, such programs appear to cross the line from “development assistance” to ideologically driven political agitation.

The queer-nexus (aka LGBTQ2SI) funding also sees Global Affairs outsourcing program delivery to advocacy groups. In 2019 – the year Trudeau announced the $14 billion for women’s health – Bibeau announced $30 million over five years and $10 million in every subsequent year “to advance human rights and improve socio-economic outcomes for LGBTQ2 people in developing countries.” We are now a very long way from building the proverbial water well in the poor village – let alone one that’s available to every villager. Canada is instead targeting its expertise and its taxpayers’ funds at particular types of people deemed worthy of help – and they happen to be the very sorts of people the Trudeau Liberals also favour in their domestic policies.

Under an agreement entitled LGBTI Pathways, Global Affairs last year granted over $1 million to ILGA World (the International Lesbian, Gay, Bisexual, Trans, and Intersex Association) “to improve the lives of LGBTI persons across the world.” How was this goal to be achieved? Largely, it seems, by teaching global LGBTI organizations how to lobby for more funding. The project’s two expected outcomes were “enhanced awareness of donors on the priorities, strategies, and funding gaps of the international and regional LGBTI movements…and an increased capacity of LGBTI-led organizations…to advocate with donors to influence policy making and funding strategies.”

The same year, Global Affairs gave nearly $500,000 to Égides, a Francophone non-profit, to advance the “Rights and Well-being of LBTQI+ Women and Girls in West Africa and International Spaces.” Also in 2023, a Global Affairs-funded agreement with Rainbow Railroad, a U.S. and Canada based non-profit that “helps at-risk LGBTQI+ people get to safety worldwide,” provided $700,000 to conduct a meta-analysis, convene roundtables and hold a “3-day conference on policy issues related to forced displacements in a Global South transit country.”

One might think it would be hard to tie feminism, sexual liberation, queer- and transgenderism, foreign policy and climate policy all together but, according to the Government of Canada, “environment and climate action is a pillar of” the Feminist International Assistance Policy. Why would that be? “Research has shown,” the document continues, “that climate change and environmental degradation disproportionately affect women and girls, and that women and girls can be powerful agents of change if given access and control over environmental resources. Since the introduction of the [Feminist Policy], Canada has strengthened its work at the nexus of gender and climate action.” This has become a standard intersectional verbal slide of ministers and apparatchiks.

Improbable nexus: The Trudeau government’s foreign aid effort has somehow merged feminism, sexual liberation, transgenderism and climate-change policies – by, for example, claiming that “climate change and environmental degradation disproportionately affect women and girls.” (Sources of photos: (left) agroffman, licensed under CC BY-NC-SA 2.0; (right) Julie Gorecki, retrieved from The Feminist Wire)

The Liberal policy also is being pushed by Canada’s left-wing opposition parties. In late May, NDP MP Laurel Collins addressed the House of Commons Standing Committee on Environment and Sustainable Development, saying (at 16:00 in the linked video for May 23), “Climate emergencies are not gender neutral. The degradation of ecosystems disproportionately impacts women and girls, and I am wildly emotional. This is the existential crisis of our time.”

Whether it is actually occurring or not, this “existential crisis” is certainly costly, already resulting in the transfer of large amounts of money from taxpayers in the Frozen North. Canada is currently on the tail end of a five-year, $5.3 billion International Climate Finance Program that encourages recipient countries to adopt practices that may not even be to their benefit.

A portion of those billions was, for example, allotted to the Canadian Foodgrains Bank, which received $35 million to undertake a project entitled “Nature Positive Food Systems for Climate Change Adaptation.” The project “aims to improve low carbon, climate-resilient economies in rural areas of Ethiopia, Kenya, Mozambique and Zimbabwe for enhanced well-being of communities, especially women, girls, and other vulnerable groups.”

Canada’s $35-million “Nature Positive Food Systems for Climate Change Adaptation” project seeks to enhance “well-being of communities, especially women, girls, and other vulnerable groups” in Ethiopia, Kenya, Mozambique and Zimbabwe – countries where men live far shorter lives than women. Shown are rural areas of Ethiopia (top) and Kenya (bottom). (Sources of photos: (top) Rod Waddington, licensed under CC BY-SA 2.0; (bottom) ELIX, licensed under CC BY-NC-ND 2.0)

The average life expectancy at birth in these four countries is, incidentally, five-and-a-half to seven years longer for women than men, suggesting men might actually be the “vulnerable group”. Instead, men presumably will be left to fend for themselves in the allegedly hotter, drier, more hostile and unpredictable climate that is to come. Who knows, perhaps simply by stealing some of that delicious “nature-positive food” that will be grown by all those aid-receiving, longer-lived women and girls.

Even were we to stipulate that women and girls in certain developing countries are in greater need of Canadian largesse than their shorter-lived male compatriots, the evidence doesn’t appear to matter one way or the other, as the Liberals are immune to facts that undermine their woke agenda. Consider war-torn Ukraine, a country whose men are exposed to nearly all the risks of combat, do nearly all the fighting and dying – with 200,000 killed or wounded (many of them permanently crippled) since Russia’s invasion in February 2022 – and are subject to special laws preventing men aged 18-60 from leaving Ukraine, while over 6 million Ukrainian women and girls have sought safety abroad.

Among its aid programs, Canada in February announced it would contribute $4 million to help Ukraine remove some of the millions of dangerous mines sown during the war. But instead of focusing on the technical aspects of doing this difficult job safely and efficiently, i.e., getting the most mines removed for the effort expended, Canada has pressured Ukraine to ensure there are plenty of demining jobs for members of designated groups – namely women and transgenders. Along with this “gender-inclusive demining” aid, multiple other Canadian aid programs also explicitly tell the Ukrainian recipient agencies to focus “in particular [on] women and vulnerable groups” (other than men, of course).

“There is no Western nation that developed minus oil, minus [natural] gas,” says Jusper Machogu (top), a Kenyan engineer, farmer and advocate of modern agriculture and fossil fuel development in Africa, which he argues should be far higher priorities than worrying about the threat of future climate change. At bottom, Kenyan farm workers process maize in Uasin Gishu County. (Source of bottom photo: Jen Watson/Shutterstock)

Returning to the issue of climate, there are plenty of Africans who believe their continent is facing bigger and more immediate problems than the threat of future climate change. Jusper Machogu, for example, is a young Kenyan man who uses social media to advocate “fossil fuels for Africa” because he believes Africans above all need access to reliable, affordable energy. “Most people over here don’t really know what [the UN’s] Sustainable Development Goals are about or what the UN is truly doing in Africa,” Machogu says in a lengthy interview. “They say that there are these 17 big problems that Africans, or developing countries are facing. I’m surprised to see climate change as one of those problems.”

Machogu bristles at the hypocrisy of prosperous aid-giving countries now expecting Africa to develop in an ideologically prescribed – and, he argues, ineffective – manner. “There is no western nation that developed minus oil, minus [natural] gas,” he notes. “The four pillars of modern civilization are cement, fertilizer, plastics and steel.” This is the core argument made in How the World Really Worksthe 2022 book by Vaclav Smil, Distinguished Professor Emeritus in the Faculty of Environment at the University of Manitoba (Smil specifically cited ammonia, a key constituent of fertilizer). Machogu says Africa requires much more of each pillar – and all four in turn depend on large amounts of plentiful, affordable and reliable energy to produce (with fertilizer and steel also containing a fossil fuel as an ingredient).

In addition, natural gas and propane are much cleaner-burning fuels than the wood and dung still used by millions for cooking and heating. There’s even a gender-equity dimension, notes journalist Anthony Furey in a recent column: millions of African women and girls spend hours each day walking in search of wood fuel and carrying it back home. Making fossil fuels widely available at reasonable cost could begin to liberate them from this drudgery while improving air quality in homes and villages.

But instead of helping Africa develop more of its significant oil and natural gas potential, Western nations and multilateral institutions are relentlessly pushing wind and solar power. “They say we’re going to get you loans, but if we’re going to give you a loan, you must invest in renewable energy,” says Machogu. “When they say renewable energy, they don’t mean hydro or geothermal. Power usually means solar and wind.”

“If we’re going to give you a loan, you must invest in renewable energy”: Global Affairs Canada and other globalist institutions seek to control Africa’s development by agreeing to sponsor only solar and wind energy. Shown at left, solar panels outside shacks in a remote village with no electricity in rural Woqooyi Galbeed region, Somalia; at right, a wind and solar power installation on a farm in Upington, Northern Cape Province, South Africa. (Sources of photos: (left) Voyage View Media/Shutterstock; (right) Grobler du Preez/Shutterstock)

He is certainly right about Global Affairs Canada. A recent analysis by the Epoch Times shows that aid for renewable energy was the fastest-rising category of foreign assistance, reaching $555 million in fiscal 2023, and expected to rise further in the coming years. Virtually zero was allocated to natural gas or even nuclear energy, which emits no carbon dioxide while generating electricity. Meanwhile, spending on traditional bread-and-butter areas like transportation, storage and disaster risk reduction has been cut sharply in recent years.

Machogu remains unconvinced that solar and wind power – which are expensive, intermittent and unreliable – are the solution for Africa. “What’s going to make an average African rich?” he asks rhetorically. “Solving agriculture. Today about six to seven out of 10 Africans rely on agriculture for their livelihood. How do we solve agriculture? Of course, we need fossil fuels. We need farm machinery. We need irrigation. We need nitrogenous fertilizers. That’s what the crop needs to grow or to do better.”

The West’s climate fixation means that oil and natural gas development in Africa remains woefully underfunded, and hydroelectric facilities receive much of their capital from Communist China. Shown at top, liquefied natural gas project at Cabo Delgado, Mozambique; middle, the Mukuyu-1 exploration well in Zimbabwe’s Cabora Bassa Basin; bottom, the Grand Ethiopian Renaissance Dam, which will generate 5,100 megawatts of electricity on the Blue Nile. (Sources of photos: (top) Sigrid Ekman, retrieved from African Arguments; (middle) The Africa Report; (bottom) Daily News Egypt)

But on this issue, Canada is as stubborn as the EU, the World Bank and other international organizations with which its policies are aligned, refusing to provide any loans or other financial assistance for oil and natural gas development in Africa. As Machogu notes, even hydroelectric dams – a foundation of the electricity networks in numerous Western countries, especially Canada – are now virtually anathema. Ethiopia, for example, recently began producing power from the enormous Grand Ethiopian Renaissance Dam on the fabled Blue Nile, and wishes to build several more dams on other rivers. It seems a reasonable goal, as barely half of its population has access to electricity.

And yet while this dam site was originally surveyed using U.S. aid money in the 1960s, Western nations bowed out of the project one by one, while environmental groups as well as neighbouring Egypt fought vehemently against it, and the World Bank now stubbornly pushes only wind, solar and geothermal power. So Ethiopia had to scratch together funding from its own meagre public finances, from crowd-funding, investment by dam employees and, finally, a $1 billion loan from China. China unapologetically uses aid to advance its geopolitical agenda while enriching Chinese construction companies and equipment manufacturers to which some of the loan funds are tied. The story has been similar on several other recent Ethiopian dam projects. These are foreign policy win-wins for China, Ethiopia gets its dams – and Western nations look arrogant and inept.

Canada’s Liberal Party prides itself on its woke bona fides. From the early days of Trudeau’s appointment of a gender-equitable Cabinet “because it’s 2015” to its intimate ties with Canada 2020, the self-described “upstart think-tank for Canada’s progressive community”, the current government understands itself as a standard-bearer of progressivism. Most Canadians know that by now; but most perhaps don’t know that this agenda extends to pretty much every South American or African village where Canadian aid money finds its way.

After one recovers from the eye-watering – and rising – amounts of money that the federal government is spending on climate, contraception and the queer-nexus triad, the next question is, is it money well-spent? Even if you are ideologically aligned with the goals, are the people Canada’s government favours in developing countries – women, girls and LGBTQI+ – less poor than they were before? More climate-resilient? Eating nature-positive foods? Where is any bang for the billions of Canadian bucks? In what world could this magic be brought into effect, one where reducing the carbon footprint, providing contraception and changing the mores in developing countries increases the safety and wealth not only of the (sometimes unwilling) recipients, but of Canadians (as Freeland claimed her policy aims to do)?

The experience of other aid-giving countries suggests such an approach does not work and eventually may even backfire in the donor country. Freeland and Bibeau may have taken their lead in crafting the 2017 Feminist International Assistance Program from Sweden, which in 2014 had adopted a similar policy directive. Perhaps Global Affairs Canada should look once more to the Nordic country, because in 2022 Sweden announced it was abandoning its feminist foreign policy. Tobias Billström, Sweden’s Minister for Foreign Affairs, that year told the newspaper Aftonbladet that, “Gender equality is a fundamental value in Sweden and also for this government, but we’re not going to continue with a feminist foreign policy because the label obscures the fact the Swedish foreign policy must be based on Swedish values and Swedish interests.”

Pushback from aid-receiving countries: “Many Western leaders have revealed themselves to be modern colonial masters,” asserts Nigerian scientist Obianuju Ekeocha, who warns of the West’s manipulative tactics to impose the globalist agenda on Africa. (Source of photo: Catholic Digest)

Something needs to give in Canada as well, because not only is the current approach not working, there’s at least some evidence it’s angering more and more people in aid-receiving countries. Groups have been founded, in fact, specifically to oppose Western aid if it comes with too high an ideological price.

Obianuju Ekeocha is a Nigerian scientist and founder of Culture of Life Africa, an organization that seeks to push back against what it terms “unbelievable cultural pressure that is beginning to erode and alter the trajectory of the African cultural values of life, marriage, motherhood, family and faith.” She has written and spoken extensively on the misalignment between the actual needs and desires of African women and the funding priorities of Western nations. To her, the 21st century coercive diplomacy and haughty ideological conditions evoke sinister overtones of relations in past centuries. “Many Western leaders have revealed themselves to be modern colonial masters, threatening to withdraw aid from countries such as Nigeria and Uganda unless they accept their global sexual agenda,” Ekeocha writes in her 2018 book Target Africa: Ideological Neo-Colonialism Of The Twenty-First Century.

Machogu, for his part, goes even further. “I think it boils down to [a goal of] depopulation,” is his stark assessment. “They’re trying to keep Africa poor.”

Anna Farrow is a Montreal-based journalist for The Catholic Register.

Source of main image: Shutterstock.

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C2C Journal

Why the Trump Administration is Unlikely to Impose Import Tariffs on Canadian Oil and Natural Gas

Published on

From the C2C Journal

By George Koch

Few things about Donald Trump’s recent election are causing worse disarray worldwide than the incoming U.S. President’s vow to erect a tariff wall against all imports in order to spur a resurgence in American manufacturing might. Canada’s up to $200-billion-a-year worth of oil and natural gas exports lie at stake, feared to be among the new Administration’s tariff targets. But how strong is the basis for such fears? Probing the political psychology of Trump’s economic and trade policies and examining the intricate mechanism that is North America’s vast integrated oil and natural gas sector, George Koch illuminates the role Canadian energy can play in the U.S. economic revival and the Trump team’s geopolitical drive for global “energy dominance”.

Tariff,” U.S. presidential candidate Donald Trump was fond of saying with a smirk, “it’s my favorite word.” It was enough to curdle the blood and wobble the knees of political leaders, trade officials and business groups around the world – not least in export-dependent Canada. This was one Trumpian campaign line not swatted aside by critics as bombast, trolling, dog-whistling to the “extreme right” or unhinged fantasy. And with evident good reason.

After all, it was President #45 who after rising to political prominence largely on his promise to go after “bad trade deals” had upended 70 years of U.S. trade policy by imposing tariffs on Chinese (and some Canadian) imports and demanding to renegotiate the North American Free Trade Agreement. It was returning candidate Trump who picked as his running mate J.D. Vance, whose life story growing up amidst family wreckage in rural Ohio is almost the embodied result of a hollowed-out manufacturing economy, and who today is an articulate frontman for the something-less-than-free school of international trade. And it is President-elect Trump who has nominated prominent advocates of “America-first” trade policy – in which tariffs are central – to become his Secretary of Commerce and Secretary of the Treasury.

Tariff king: Consistent with his first presidency, U.S. President-elect Donald Trump has vowed to pursue an “America-first” trade policy this time. Shown, Trump speaking during an America First Policy Institute gala at his Mar-a-Lago, Florida estate, November 2024. (Source of photo: AP Photo/Alex Brandon)

Few sectors in any country stand to suffer greater damage from U.S. tariffs than Canadian energy. Canada’s fossil fuel production is at record levels, with crude oil averaging 5.8 million barrels per day so far this year and natural gas well over 18 billion cubic feet per day. Exports of these key commodities (plus natural gas “liquids” like ethane and propane) are valued at more than $134 billion per year – another measure has it at US$160 billion – with exports of petrochemicals generating billions more. Canada’s oil and gas sector is directly responsible for $210 billion of the nation’s GDP and 25 percent of its exports.

Yet while the industry today is a marvel of leading technology, deep expertise and operating efficiency, Canadian energy remains costly to produce, heavily taxed and saddled with ever-increasing regulations, such as the recently announced federal “emissions cap”. Moreover, the remoteness of the Western Canada Sedimentary Basin – the world-scale producing region that covers most of Alberta plus northeast B.C., southern Saskatchewan and a corner of Manitoba – imposes costs not incurred by U.S. producers. Constraints on export capacity effectively trap oil and gas within Western Canada, dampening regional benchmark commodity prices. And the industry remains over-dependent on the U.S. market; the expanded Trans Mountain pipeline will enable at best 20 percent of Canada’s crude oil production to access offshore markets, while the country’s first liquefied natural gas (LNG) export terminal is not yet operational.

This critical industry thus sits exposed and vulnerable to U.S. tariffs. A levy of 10-20 percent – the rate Trump has said he wants to slap on all imports – would be catastrophic, reducing Canada’s energy exports by an estimated 22 percent, causing domestic pricing to collapse and, with it, any new capital investment. Thousands would lose their jobs and government deficits would soar. Rory Johnston, a Toronto-based oil market researcher and founder of Commodity Context, describes Canada as “uniquely vulnerable to market pressure posed by U.S. refineries.”

“Uniquely vulnerable”: Canada’s oil and natural gas production is setting records and generating 25 percent of the country’s overall export earnings; a 10-20 percent U.S. import tariff could wreak catastrophic damage. (Sources: (graph) CAPP; (left photo) MikoFox, licensed under CC BY-NC-SA 2.0; (right photo) Green Energy Futures, licensed under CC BY-NC-SA 2.0)

But is the threat of such a tariff imminent – or even credible? The evidence to date – partial and indirect though it may be – suggests not. More profoundly, the logic of U.S. self-interest and of Trump’s stated policy objectives points away from tariffs on Canadian oil and natural gas.

First the evidence. Trump had barely been declared victor in the November 5 Presidential election before voices on both sides of the border began talking about creating a tariff “exemption” for Canadian fossil fuels. Wilbur Ross, Secretary of Commerce in Trump’s first term, called fears of such a tariff “overblown” and said he “can’t imagine” his former boss imposing them. Alberta Premier Danielle Smith also said she was “not worried”.  Then again, she also wrangled for herself invitations to key events such as next month’s meeting of the Western Governors’ Association, as well as Trump’s Inauguration in January, to make sure Alberta’s message gets through.

Similar views have been expressed by other knowledgeable sources from industry, trade and investment organizations. They note that Trump has done this very thing before; the renegotiated U.S.-Mexico-Canada Agreement of 2019 notably excused oil and natural gas flows from any tariffs. A further favourable indication is Alberta’s recent admission to the U.S. Governors’ Coalition for Energy Security, a group of 12 states that have banded together to cooperate on policies that promote reliable and affordable energy.

Guys who get it: Among Trump’s Cabinet nominees are North Dakota Governor Doug Burgum (left) and Liberty Energy CEO Chris Wright (right), both known for their vigorous support of oil and natural gas development and free North American trade in energy products. (Sources of photos: (left) Gage Skidmore, licensed under CC BY-SA 2.0; (right) Gage Skidmore, licensed under CC BY-SA 3.0)

Another positive sign is that alongside Trump’s pro-tariff Cabinet picks have come nominations of individuals with a deep understanding of North America’s petroleum sector. Douglas Burgum, a successful software entrepreneur and currently Governor of North Dakota, is slated to become Secretary of the Interior, chairman of the newly created National Energy Council and a member of the U.S. National Security Council. Burgum’s primary mandate is to promote innovation and investment by cutting through the thicket of new restrictions on oil and gas development that President Joe Biden had imposed. Chris Wright, founder of Liberty Energy and an unashamed industry booster, has been nominated to become what one U.S. commentator describes as “the most knowledgable secretary of energy the nation has ever had.” Lee Zeldin, another pro-industry figure, has been tapped to head the Environmental Protection Agency.

Equally noteworthy is that, in contrast to the widespread and bipartisan clamouring for tariffs on Chinese imports, nobody in the U.S. is demanding that Trump target Canadian energy. Even Bernie Sanders, the avowedly socialist Senator from Vermont who wants a “windfall tax” and higher government royalties imposed on all oil producers, appears indifferent to import tariffs. And while U.S. environmental groups don’t like any free trade in oil and gas, they devote most of their energy to pushing their government towards restrictive European/Canadian-style climate-change policies or a new UN “climate damages tax.” The American fossil fuel sector, meanwhile, is not only in favour of tariff-free trade in energy products – including with Canada – it opposes tariffs on anything.

The evidence to date, however hopeful it may seem, remains inconclusive. Trump prides himself on his unconventional and unpredictable nature. This is what causes America’s adversaries – most notably Communist China – the greatest consternation. Regardless of his previous decisions on trade issues, if Trump thinks imposing tariffs on Canadian energy imports make sense now, he will do so.

“Manufacturing superpower”: The fundamental objective underlying Trump’s trade policy is to reverse the long slide of American industry through decades of globalization – mainly by targeting offshore manufacturing. Shown at top and middle, Trump at campaign event at Dane Manufacturing in Waunakee, Wisconsin, October 2024; at bottom, an assembly line for automobile engines. (Sources of photos: (top and middle) AP Photo/Charlie Neibergall; (bottom) Alliance Employment Services)

Logic and self-interest, however, also point away from such tariffs. The fundamental objective underlying all of Trump’s trade policy is to strengthen American manufacturing. It is something he has articulated since before entering politics in 2015; it can accordingly be regarded as sincere. Trump wants to halt and if possible reverse that sector’s long slide through decades of offshoring and globalization that crippled or wiped out whole industries all over the U.S., especially in the Midwest heartland. These are the places Trump promised to help, this lies at the core of his slogan “Make America Great Again”, and these are many of the people who sent him to the White House the first time and stuck by him through the depths of his ignominy following his second, failed Presidential run. This year, Trump ran on a platform to transform his country back into “it’s my favorite word.”.

To accomplish that dramatic – some would say grandiose if not unachievable – objective, Trump intends to punish countries that use subsidies, favouritism and other policies to unfairly advantage their own industries and flood the U.S. with underpriced goods, harming domestic producers and preventing new ones from starting up. China may be hit with tariffs as high as 60 percent. He will also target imports believed to threaten U.S. national security (such as electric vehicles vulnerable to hacking by foreign enemies) while working to reduce dependence on imports of strategic materials or components critical in wartime. And he wants to close loopholes allowing China to bypass U.S. tariffs by locating production in proxy countries – especially the two countries adjoining the U.S.

Mexico has gone quite far down the road of partnering with Chinese companies, and Trump’s key advisors have warned that Mexico will be held to account for it. Canada is certain to be scrutinized as well, but can probably allay similar U.S. concerns by avoiding becoming a backdoor and way-station for Chinese goods, something Deputy Prime Minister Chrystia Freeland already promised last week. This will require several key policy commitments, as well as competent, rigorous enforcement (always a questionable assumption for this Liberal government). It will also be necessary to continue matching U.S. tariff-related moves against China, as Canada did earlier this fall in imposing tariffs on Chinese EVs and aluminum.

Closing the back door: Trump is determined to eliminate loopholes allowing China to bypass U.S. tariffs through “transshipment”, i.e., locating assembly plants in Mexico or Canada. Shown at top, Chinese company setting up facility in northern Mexico; at bottom, transshipment occurring in Texas. (Sources of photos: (top) Kosuke Shimizu/Nikkei; (bottom) T. Hammonds MSW, licensed under CC BY-NC-SA 2.0)

In addition to tariffs, Trump’s critical policies in restoring American manufacturing competitiveness will be reducing taxes, lifting the regulatory burden and, as his campaign platform puts it, ensuring the flow of “Reliable and Abundant Low Cost Energy”. By “energy” one should mainly read “crude oil and natural gas” – something Trump describes over and over as “liquid gold”. (Ending the demonization of coal is also a part; as well there is likely to be a modest revival in nuclear power.) In addition to supporting American industry, cheap energy is intended to help ease inflation and improve the lot of hard-pressed consumers, homeowners and wage-earners.

Among the associated promises and policies Trump has mentioned are to cancel the Biden Administration’s planned pro-electric vehicle policies (similar in effect to Canada’s outright mandate) and its moratorium on new LNG export facilities, end permitting of offshore wind turbines, reopen offshore areas to oil and gas drilling, unlock Alaska’s National Petroleum Reserve, reopen federal lands to drilling and hydraulic fracturing, pull the U.S. out of the Paris Climate Accord (for the second time, in Trump’s case) and otherwise end the Biden-era’s “Green New Deal”, which Trump derides as a “green new scam”.

During his election-night acceptance speech, Trump pointedly told Robert F. Kennedy, Jr., his pick to be Secretary of Health and Human Services and formerly a vocal anti-oil activist, to keep his nose completely out of energy issues. Chris Wright, his recently announced nominee to be Secretary of Energy, has written a 180-page paper which contends that “Zero Energy Poverty by 2050 is a better goal than Net Zero 2050.”

Trump’s energy policy includes cancelling President Joe Biden’s moratorium on new liquefied natural gas (LNG) export facilities, reopening offshore areas to oil and gas drilling and unlocking Alaska’s National Petroleum Reserve. Shown at left, Trump visits the Cameron LNG liquefaction terminal in Hackberry, Louisiana, 2019; at middle, an oil drilling platform at Green Canyon in the Gulf of Mexico; at right, the National Petroleum Reserve. (Source of right photo: mypubliclands, licensed under CC BY 2.0)

Trump’s energy policy, in short, is “drill, baby, drill” – often written in all-caps. Where might Canadian-produced oil and natural gas fit into this picture? Right in the middle, as it turns out – figuratively and literally.

It cannot be said often or loudly enough: inexpensive, reliable and plentiful energy is essential to economic competitiveness, national prosperity and modern civilization. But many Western governments – Canada’s among them – act as if it is optional. Right now, industries in authoritarian China use low-cost coal-fired electricity to produce the pricey solar panels and wind turbines that are exported to Western countries where they produce exorbitantly expensive electricity that in turn renders their domestic industries uncompetitive. Industrial users in Great Britain, for example, currently pay five-and-a-half times as much for electricity as those in the U.S., while German industry pays more than three times as much. Both countries are seeing their industrial base evaporate before their eyes. If Canada remains on its current policy path, it will be next.

Trump is unshakeably determined to avoid that for his country – and this is where Canadian energy enters the picture. Crucially, Canadian fossil fuels are not manufactured goods except in the narrowest technical sense. Unlike cars, smartphones, toys, shoes or furniture, they are commodities rather than finished products. They aren’t produced with unfair subsidies. They don’t contain secret chips enabling the Chinese to spy on U.S. military bases. They don’t threaten to displace or bankrupt age-old American companies, throw thousands of employees out of work or transform once-thriving cities into ghostly husks.

They are the very opposite: critical inputs that, by being priced competitively, make American manufacturers more competitive, reduce the operating costs of nearly any business and allow American consumers to pay less to fuel their vehicles and heat/cool their homes. Canadian oil and natural gas not only do not undermine Trump’s economic and trade policies, they strengthen and advance them.

Integrated system: Western Canada’s producing region supplies the U.S. heartland with crude oil and natural gas, where it can be refined and distributed, meeting the Trump test of (as his campaign platform puts it) “Reliable and Abundant Low Cost Energy”. Shown at top, an oil refinery in Rosemount, Minnesota. (Sources: (photo) Pexels; (map) CAPP)

This beneficial role is accentuated by some geographical quirks. Although North America’s vast interlinked system of energy pipelines is a near-miracle of technology, operating efficiency and reliability, it is not perfect or seamless. Major consuming regions tend to get most of their oil, natural gas and liquids from the nearest producing region; why ship the stuff farther than you must? Consequently, the U.S. Midwest and portions of the “near South” and northeast are heavily supplied from Canada.

If this supply were to be curtailed or disrupted by tariffs or other measures, manufacturers in these dependant regions would suffer immediately as wholesale and consumer prices jumped substantially. Regional oil refineries, gas/liquids facilities and petrochemical plants would pay more for their feedstock, face shortages as Canadian producers “shut in” no-longer-profitable production, and/or would operate below capacity or inefficiently as they sourced sub-optimal feedstock from elsewhere.

Even a 10 percent tariff would raise the average retail gasoline price across the U.S. by 5 percent, according to commodity pricing analysts at Montreal-based BCA Research. But the regional effects would be much greater. Regional prices not only for gasoline and heating fuel, but on any goods related to oil and natural gas, would rise far more than is implied by a mere 10-20 percent import tariff. And keep in mind, much of this region is MAGA country. Over time, some pipelines that currently ship product out of the Midwest might need to be “reversed”, no longer exporting to the Gulf of Mexico and Northeast regions but drawing energy from them. The U.S. might even need to increase imports from geopolitical adversaries like Venezuela or dodgy and corrupt African states.

All of this would be damaging not only to American consumers, business and manufacturing industries, but to U.S. foreign policy and even to the U.S. energy industry itself, the ostensible “competitor” that one might intuitively think stands to benefit from import tariffs. It hardly needs to be said that this would run counter to the new Administration’s objectives.

Despite being dubbed “dirty oil”, “unsustainable” and a “sunset industry”, the energy sector has led America’s productivity gains over the last decade while providing well-paying jobs to hundreds of thousands of Americans – including Hispanics, Blacks and American Indians. (Source of bottom photo: Sahara Group)

In addition to its roles in supporting manufacturing and consumers, America’s oil and gas industry is seen by Trump and key members of his nascent Administration as a competitive advantage for the economy as a whole, as a major source of wealth-creation in its own right and as a geopolitical weapon. For this to make sense, one needs to know a few things about this industry. In contrast to its image as “dirty oil”, “unsustainable” or a “sunset industry”, oil and natural gas is among the most technologically advanced, innovative, entrepreneurial and dynamic industries in the economy. This sector led the entire American economy in productivity gains over the previous decade, as the accompanying graph indicates.

The million or more jobs it provides across the continent are by turns technically intricate, dangerous, physically hard, intellectually stimulating – and very lucrative. Just as more and more Canadian First Nations are becoming proponents of natural resource development because they recognize the benefits to themselves, the U.S. industry provides jobs to hundreds of thousands of Hispanics, Blacks and American Indians – an impressive number of whom just voted for Trump.

This is all thanks to one of the most remarkable industrial turnarounds in history: America’s transformation from an insatiable importer of oil and natural gas, its domestic production sagging by the year towards apparent oblivion, its producing sector increasingly demoralized and decrepit, into a country that’s not only energy self-sufficient but has leapfrogged to a net exporter. All in the dizzying time-frame of barely a dozen years, starting in 2008, the year U.S. crude oil production reached its nadir of a mere 5 million barrels per day. (Not long after, just as U.S. oil production was showing sparks of revival, President Barack Obama contemptuously declared that, “Anybody who tells you that we can drill our way out of this problem doesn’t know what they’re talking about, or just isn’t telling you the truth.”)

By last year the average rate had soared to 12.9 million barrels per day which, the U.S. Energy Information Administration recently pointed out, represented “more crude oil than any country, ever.” U.S. production isn’t just higher than Saudi Arabia and Russia’s – it’s nearly 30 percent higher. How this came about is its own story. But suffice it to say that Canadian visionaries and companies played an important role. So, interestingly, did prospective energy secretary Wright and his company, Liberty Energy, which helped pioneer the development of formerly inaccessible shale reservoirs by using horizontally drilled wells completed with multiple hydraulic fractures. In short, this transformation has fundamentally changed the energy game for the U.S., domestically and internationally.

Since its nadir at 5 million barrels per day (mmbpd) in 2008, U.S. crude oil production has soared to an average of 12.9 mmbpd in 2023 – more than any other country in history and trumping Saudi Arabia and Russia. Concurrently, exports of liquefied natural gas have zoomed from zero a decade ago to 12 billion cubic feet per day. (Sources of graphics: (top) eia.gov; (bottom) S&P Global, retrieved from The New York Times)

Here again, imported Canadian energy is neither a competitive threat nor a hindrance – but a source of economic value. The quirks of geography combined with the refusal of successive Canadian governments to ensure that Canada’s oil and natural gas could access global markets have created what amounts to a gargantuan, continent-spanning arbitrage mechanism that enriches American companies, investors and governments. In brief, cheap Canadian crude oil, natural gas and liquids are drawn into the U.S. from the north, enabling domestically produced crude oil, natural gas, liquids, refined fuels and petrochemicals to be exported from the vast Gulf of Mexico energy complex to hungry global markets, where they access premium international prices.

This has become a multi-hundred-billion-dollar opportunity that American entrepreneurs and financiers have exploited with alacrity. Vast investments in LNG export facilities have taken the U.S. from zero LNG as recently as 2014 to approximately 12 billion cubic feet per day this year, a figure forecast to zoom to 20 billion cubic feet per day within two years (the U.S. will thus be exporting more gas than Canada produces in its entirety). U.S. net exports of refined fuels (much more valuable than crude oil) are generating more than US$60 billion annually. The associated processing and export facilities themselves employ thousands.

Clearly, the more Canadian oil and natural gas can be imported from the north, the more American energy – including value-added refined/processed products – can flow from the Gulf of Mexico outward to the world. Indeed, Trump himself has said he would like to reinstate the federal permit for the much-fought-over, 800,000-barrel-per-day Keystone XL pipeline, which he approved early in his first term but was then cancelled by Biden.

The stunning U.S. energy turnaround in barely 15 years plus the current prospect of enormous further growth enable Trump and his policymakers to credibly talk about elevating the U.S. to global “energy dominance”. That is to say, an America liberated from dependency on imported oil not only can act unconstrained by the need to placate oil-producing nations that don’t share U.S. interests, but can use its own energy exports to enrich itself and support allied countries. It can also stare down oil-producing adversaries like Iran and Russia, leaving them weaker, contained and less able to fund wars, terrorism and other foreign mischief. Trump’s stated policy to curtail oil production misused by dictatorships in Iran and Venezuela also implies that Canadian energy exports will be more highly sought-after than ever. More Canadian energy strengthens U.S. energy dominance and weakens its enemies by helping to hold down international commodity prices.

Golden opportunity: The Trump Administration’s stated goal of global “energy dominance” appears achievable, weakening its oil-producing adversaries while holding open the door to Canada – if Canada’s political leadership is intelligent enough to seize the moment. Shown, Trump shakes hands with UFC Champion Jon Jones at Madison Square Garden, New York, 11 days after his election victory. (Source of photo: AP Photo/Evan Vucci)

The U.S. is already the world’s energy giant. Its goal of “energy dominance” is therefore serious and realistic. Standing atop it all will be Trump, the energy dominator: his “liquid gold” will soothe American consumers, grease the skids of American manufacturing, fill the financial tanks of American investors and set economic bonfires upon America’s enemies. That simply does not sound like an Administration about to place tariffs on the very imports that will help it make this happen. Far more likely, the 47th President’s energy policy will offer Canada a golden opportunity to play a supportive role as a neighbour, friend, trading partner and ally – and to profit greatly from doing so.

George Koch is Editor-in-Chief of C2C Journal.

Source of main image: heritage.org.

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C2C Journal

Net Gain: A Common-Sense Climate Change Policy for Canada

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From the C2C Journal

By Robert Lyman
Most Canadians have come to agree that the federal carbon tax needs to go. But while the rallying cry “Axe the Tax!” has been a deadly partisan tool for Pierre Poilievre, it does not constitute a credible election campaign platform, let alone a coherent environmental policy for a new government. The Conservative Party needs to develop both, writes Robert Lyman. The election this past week of Donald Trump as U.S. President creates an urgency to remake Canada’s climate policy on more realistic, sensible grounds. Drawing upon the pragmatic, economics-driven approach of the Copenhagen Consensus, Lyman proposes a middle path that discards the uncompromising, self-destructive ideology of the Justin Trudeau government while recognizing that most Canadians won’t accept doing nothing.

The Justin Trudeau government has made reducing greenhouse gas emissions the pre-eminent goal of public policy. In 2021 it passed the Canadian Net-Zero Emissions Accountability Act, binding present and future governments to a process intended to achieve “net zero” emissions by 2050 and to set incremental five-year emission reduction targets and plans towards that end. Net zero essentially means eliminating almost all the greenhouse gas (GHG) emissions resulting from the consumption of hydrocarbons – crude oil, natural gas and coal – in the Canadian economy, and doing so within 29 years of the new law’s passage.

This presents an immense challenge and is effectively impossible in the intended timeframe. Canadians currently rely on fossil fuels to meet about 73 per cent of their energy needs. These energy sources provide services essential to Canadians’ incomes and wellbeing: secure, reliable and affordable heat, lighting and motive power to move people and goods, as well as the food, medicine and other critical services to sustain them. Without these energy sources, Canadians would all be far poorer, colder, less mobile and less able to compete in the global economy.

Impossible dream: With fossil fuels currently meeting 73 percent of Canada’s overall energy requirements and fulfilling critical needs from heating to medical services, getting to “net zero” emissions anytime soon seems delusional. (Sources of photos: (top two) Pexels; (bottom two) Unsplash)

At least four trends are coming together to make the present policy course untenable:

  1. The Canadian public is becoming far more aware of the financial costs of the emission reduction measures, including especially the impact of “carbon” taxes (technically, taxes on fossil fuel-related emissions of carbon dioxide (CO2)) and higher electricity rates from switching away from lowest-cost generating options. Federal climate-related spending, by the government’s own admission (see page 125 of the pdf version of the linked document), is now in the range of $20 billion per year, while the economic cost of working towards net zero has been credibly estimated at $60 billion per year.
  2. The public – notably young people and seniors – are becoming more aware of the effects of climate-related regulations and taxes on the cost of living, especially the cost of housing, and on employment opportunities.
  3. There is a wide and growing disparity between the promises of politicians to reduce emissions and what is actually happening; no national emissions “target” has ever been met or is likely to be met.
  4. Rapidly growing emissions in many developing countries (especially China and India), which now collectively generate 68 percent of the world’s total, demonstrate that net zero will not be achieved globally. Furthermore, reductions achieved regardless of cost in Canada (which produces approximately 1.5 percent of global emissions) will yield negligible global benefits in terms of temperature or weather.

The Temptation of a Different Kind of “Net Zero” Policy

Based on these trends, it might be argued that Canada should perform an immediate policy U-turn and cancel all federal measures founded upon any claim of impending climate catastrophe. This would give new meaning to the term “Net Zero Policy”: a government whose climate change policy is to have no policy. Enthusiasm for such an approach must, however, be tempered by the recognition that it runs counter to the position held by all the main political actors in Canada, including notably the mainstream media. Policy, like politics, best evolves in the realm of compromise and consensus.

“Axe the Tax” has its limits: Conservative Party leader Pierre Poilievre (top) has pledged to get rid of the hated consumer carbon tax and eliminate comprehensive electric vehicle mandates, but he’s expected to maintain the pricey “producer” carbon tax on industrial emitters. (Sources of photos: (top) The Canadian Press/Paul Daly; (middle) WSDOT, licensed under CC BY-NC-ND 2.0; (bottom) Shutterstock)

Thus, one should consider where might lie a “middle ground” that could garner the support not only of those strongly opposed to all elements of current policy – which can loosely be described as Conservative leader Pierre Poilievre’s core base – but also of moderates, i.e., people who do not doubt the general notion of climate change but who shy away from radical or ruinous policies to deal with it. This disparate category likely includes much of the business community, what used to be called “Red Tories”, some centrist Liberals disaffected with Trudeau and some working-class NDP voters suspicious of that party’s current direction.

Politics at its most basic will require that the Conservatives have something to put in their campaign platform entitled “climate change”, “emissions” or, more broadly, “the environment”. So far, Poilievre has been cobbling together policy ideas seemingly ad hoc. As practically every Canadian knows, he pledges to get rid of the consumer carbon tax – the one everyone pays at the gas pump or on their natural gas heating bill.

Less understood, however, is that Poilievre is widely believed to intend to maintain the “producer” carbon tax on industrial emitters – an equally steep, equally escalating levy that is burdening industry with billions of dollars in additional taxation. Additionally, Poilievre has promised to get rid of some major Liberal-imposed regulations – like the mandate to transition to entirely electric vehicle production by 2035 – but would rely even more heavily on other technocratic regulations at the industrial level.

Some of these policies make sense on their face; some might not make sense at all. What is clear, though, is that the Conservatives do not have a complete climate change and/or environmental policy – at least not one they have shared with the public. Eliminating the consumer carbon tax as an unfairly imposed cost and needless drag on the economy as well as a symbol of climate policy over-reach would be an important and politically popular way to demonstrate a more common-sense approach.

It is not enough, however, and it would leave a new government vulnerable to the accusation that it lacked a coherent and well-considered approach. Attempting to govern without a clearly articulated overall policy on climate would politically damage even a solid majority government; in a minority situation, it could be enough to destabilize the government altogether and prompt an early election.

A Better Way

There is a better way – a middle way between the current ideological approach and a no-policy-policy. It is inspired by the work of the Copenhagen Consensus Center. This ongoing project seeks to establish priorities for advancing global welfare in a range of areas, from battling diseases like malaria to advancing national economic development to addressing climate change, through methodologies based on welfare economics, which centres on cost-benefit analysis.* The Copenhagen Consensus was conceived and launched in the early 2000s by Bjorn Lomborg, the famous Danish environmentalist. In each policy area examined, subject matter experts present potential policy solutions, which are evaluated and ranked by a panel of economists, thus emphasizing rational prioritization through economic analysis.

In 2009 the Copenhagen Consensus assembled an expert panel to consider the best responses to climate change and rank them as priorities. The panel was asked to answer the question: “If the global community wants to spend up to, say $250 billion per year over the next 10 years to diminish the adverse effects of climate changes, and to do most good for the world, which solutions would yield the greatest net benefits?”

In the resulting report, the top priorities generally focused on investments in scientific research and technology development and commercialization, while measures to reduce CO2 emissions using currently available technologies were ranked lower, because these were found to incur high costs in relation to the expected environmental benefits. Of 15 possible policy measures to respond to climate change, the Copenhagen Consensus panel ranked carbon taxes the very worst – something of obvious relevance to Canada. Also of interest in the Canadian context was the experts’ strong endorsement of research into carbon storage (something that Alberta and Saskatchewan are very enthusiastic about), planning for adaptation and the expansion and protection of forests.

A better way: Founded by Danish environmentalist Bjorn Lomborg, the Copenhagen Consensus Center uses rational economic analysis to advance global welfare in areas from battling disease to addressing climate change. (Source of left photo: TED Conference, licensed under CC BY-NC 2.0)

The Copenhagen Consensus approach to climate policy presumes that human-induced climate change is occurring and that it probably will have adverse effects, but it contends that other social and environmental issues are more serious threats to humanity and should be addressed as higher priorities. Its careful analyses came to recognize the limitations of currently available technologies in achieving a cost-effective transformation of the global energy system. This is why it advocates prioritizing a significant increase in funding of basic science to accelerate the discovery and commercialization of new emission-reducing technologies. It also places priority on measures taken to adapt to (rather than seek to prevent) potential climate changes and to enhance the overall resiliency of the energy system.

Climate Change Policy Implications for Canada

The Copenhagen Consensus’ cost-benefit-based prioritization of climate change policies is applicable to Canadian policy-making and governance approaches in several important and broad areas, at not only the national but international and inter-provincial levels. What follows is a brief, simplified discussion of the most important aspects, keeping in mind that some of these are large issues in themselves and not resolvable overnight.

Remove the Pressure of Overly Ambitious and Arbitrary Targets

Canada has never met any of the targets set at the international or national levels regarding either the magnitude of emission reductions or the arbitrary dates by which these would be reached. The use of such arbitrary and unrealistic targets should be reduced or avoided. A first step in applying the Copenhagen Consensus’ recognition of the immense difficulty and complexity of achieving an energy transition, along with the need for new technologies whose development does not occur according to a government-controlled timetable, would be for Canada to postpone the “Net-Zero by 2050 goal” to at least 2070 if not 2100.

Adopt a Multi-Goal Framework

Canadian climate policy would henceforth be developed within a multi-goal public policy framework. Rather than making emission reduction the preeminent goal, the federal government would seek to optimize climate policy alongside multiple other public policy objectives including economic prosperity (growth, employment, investment and trade), social harmony, environmental quality, financial responsibility, energy security, defence and promotion of good federal-provincial and international relations, among others.

“Arbitrary targets”: Applying Copenhagen Consensus rational analysis would mean abandoning or postponing Canada’s “Net-Zero by 2050” goal and focusing instead on practical environmental improvement projects. Shown at bottom, the Gold Bar Wastewater Treatment Plant in Edmonton, Alberta. (Sources of photos: (top) JessicaGirvan/Shutterstock; (bottom) Urban Edmonton)

Prioritize the Real Environmental Problems

Despite what one reads and hears in the mainstream media, Canada has very high environmental quality and the areas that need improvement are relatively few. These include solid waste management, sanitation/wastewater treatment and sulphur dioxide emissions per unit of GDP. Most of these are provincial and/or municipal responsibilities, but the federal government can play a role in funding capital investments. Where the federal government has jurisdiction and must regulate, regulatory efforts should focus on addressing tangible environmental problems with practical, cost-beneficial, affordable solutions to further clean up the air, water and soil, and the results should be measured and tracked by comprehensible and publicly available metrics.

Adhere to Technological Realism

A common-sense approach would recognize that energy transitions take a long time. The pace of transition away from fossil fuels must, accordingly, be guided by the rate at which new scientific discoveries can be applied to the development of new products and services and then commercialized to the point of true economic viability. A common-sense policy approach in Canada would abandon the presumption that governments can and should attempt to hasten the technology commercialization process by “picking winners”, granting large subsidies to favoured firms or otherwise trying to centrally plan the changes in the energy economy. Instead, the new approach would entail higher levels of government funding for basic research and development.

Promote Energy Security and Reliability

A new Canadian climate policy would repeal or substantially amend the Clean Electricity Regulations that mandate the elimination of hydrocarbon-based electricity generation by 2035, a goal that this recent study concludes is completely unfeasible. It would also require that future federal or provincial regulation of GHG emissions be based upon a systematic review of the potential impacts on the viability and competitiveness of Canadian industry. Finally, it would eliminate the impending federal cap on oil and natural gas industry emissions (which was unveiled on November 4 and imposes a 35-percent rollback in GHG emissions by 2030) and take other measures to ensure that Canada, which has the world’s third-largest crude oil reserves as well as world-scale natural gas reserves, can continue to increase energy production to meet the needs of domestic and export markets.

The steep cost of compliance: The Justin Trudeau government’s 2030 Emissions Reduction Plan will add an estimated $55,000 to the average price of a new home, pointing to the need to eliminate costly and pointless regulation. (Source of photo: pnwra, licensed under CC BY 2.0)

Reduce Housing Costs

According to the Fraser Institute, the federal government’s 2030 Emissions Reduction Plan could add about $55,000 to the average cost of a new home built in Canada. Even more stringent and costly regulations would undoubtedly follow after 2030 to meet the net zero target. A new Canadian climate policy would abandon this plan and leave the establishment of building codes, zoning and construction approvals in the hands of provincial and municipal governments. This would contribute meaningfully to addressing Canada’s housing affordability crisis.

Legislate Wisely

A new policy would include amending or repealing the Canadian Net-Zero Emissions Accountability Act. The entire law is a litigation “trigger” because it gives climate activist organizations weapons that they can use to engage in “lawfare” – the strategic use of legal proceedings to hinder, intimidate or delay an opponent.

Depoliticize the Regulation of Energy Infrastructure Projects

A new policy would return the regulation of energy infrastructure and rate-making to one that takes place at arm’s length from government political and policy direction. This would require changes to the federal minister’s control of the Canadian Energy Regulator. It would also be highly desirable to reform the system of environmental assessment and review by placing strict time limits on the duration of infrastructure project reviews. Today, regulatory reviews of major energy projects often take five years or longer to complete, and some have taken over 10 years.

The federal Impact Assessment Act (having last year been found largely unconstitutional by the Supreme Court of Canada) would be substantially amended so that the resulting federal law returns to being a review of the national environmental impacts (and any local impacts as these pertain to areas of clearly federal jurisdiction) rather than an exercise in jurisdictional duplication and an assessment of consequences for the entire planet.

A common-sense climate change policy would also streamline, limit the scope of and quicken the currently often 10-year-long environmental assessment process. Shown, the LNG Canada project in Kitimat, B.C. under construction, January 2024. (Source of screenshot: Northcoast Drone/YouTube)

The principle of “whoever hears the evidence should decide” would be brought back into the law, with an appeal to the courts on a question of law only and an appeal to the federal Cabinet on a question of policy. This is how the Canadian Radio-television and Telecommunications Commission (CRTC) has worked for several decades.

The arbitrary and harmful bans on oil tanker traffic on the Pacific Coast and on new hydrocarbon exploration and development in Canada’s Far North would be removed.

Promote Federal-Provincial Harmony

In the pre-2000 period, federal climate policy explicitly recognized that measures should not entail undue costs and burdens on any region or province. This went out the window in the Trudeau era and became a leading cause of federal-provincial discord. A new policy would re-institute this as a cardinal principle. Among other things, it would also be essential to ensure that there was ample coordination and consultation with all affected provinces before any new international commitments were made.

Focus on harmony: To promote more efficient cross-border trade, Canada’s regulatory standards should align with those of the U.S. The incoming Donald Trump Administration is likely to discard electric vehicle mandates and “clean” fuel standards, policy shifts that will affect Canada. (Sources of photos: (top) AP Photo/Evan Vucc; (bottom) Sundry Photography/Shutterstock)

Harmonize Canadian and United States Regulatory Regimes

It would be recognized that to facilitate more seamless cross-border trade with Canada’s largest trading partner, the United States requires that regulatory standards and codes developed in Canada, especially involving the regulation of fuel efficiency/emissions intensity of vehicles and appliances, be closely aligned with U.S. federal standards. It is widely expected that the incoming Trump Administration will discard electric vehicle mandates and “clean” fuel standards, policy shifts that clearly will affect Canada. Although this is not to suggest that Canada allow its policies to be dictated by the U.S., close attention should be paid.

Facilitate Truly Responsible Investing

Canada has committed to adopting the new Sustainability Disclosure Standard under International Financial Reporting Standards (IFRS), which imposes mandatory sustainability-related disclosure and climate-related financial disclosure. These and similar regulatory initiatives are increasing the burden on Canadian firms to report not only their own estimates of GHG emissions but also to try to guess those of their suppliers and customers. This is absurd on its face and creates another trigger for endless litigation when such guesses turn out wrong, prompting accusations of fraud. A new Canadian climate policy would severely restrict the use of such accounting measures.

Build Adaptation and Resilience

A new Canadian climate policy would place greatly increased, perhaps primary, emphasis on measures to increase the resilience of Canadian infrastructure and economy to future climate changes. Adaptation measures can avoid or reduce adverse future impacts by, for example, changing human behaviour in advance, such as land use rules that prohibit construction of buildings in flood-prone areas, or by taking actions to protect valued resources, communities and landscapes. Many adaptation measures also increase resilience towards climatic variability such as droughts and storms, making them potentially attractive policies even in the absence of long-term human-induced changes. They can pay dividends to society even if all the concerns about climate change turn out to be greatly exaggerated.

A new climate change policy should include measures to increase the resilience of Canadian infrastructure and the economy to future climate changes. Shown, (at top) a storm in coastal Nova Scotia; (at bottom) flooding in B.C.’s Lower Mainland. (Sources of photos: (top) The Canadian Press/Andrew Vaughan; (bottom) The Canadian Press/Jonathan Hayward)

Who Might Implement the Copenhagen Consensus in Canada?

It is clear that the Trudeau government is incapable of such a significant policy reform as summarized above. It is at least conceivable that, were Trudeau to be replaced before the next election, his successor might consider some of these measures; conceivable, but not likely. Most probably, the task of implementing such broad policy changes would fall to a new Conservative federal government. The party’s promises to “Axe the Tax” correctly address the mounting public concern about the impact of carbon taxes on the cost of living and competitiveness of Canadian business, as well as the unfairness with which they have been applied.

Fairly soon, however, the current Official Opposition is likely to take on the responsibility of actually governing. To respond effectively to the economic and political threats posed by climate catastrophism, advocates of policy change must go beyond merely targeting individual policies for cancellation based on complaints about the harm they do. They must think through what a realistic, credible, politically palatable – and cost-effective – climate policy framework would look like. The time to start is now.

*Cost-benefit analysis is a tool economists use to compare the estimated costs and benefits (or opportunities) associated with a proposed undertaking. It involves tallying up all the current and projected long-term costs and benefits, estimating the financial equivalent of those for which dollar equivalents are not available, and converting everything into present-value terms using discount rates. If the costs outweigh the benefits, then the decision-makers should rethink whether to proceed.

Robert Lyman is a retired energy economist who served for 25 years as a policy advisor and manager on energy, environment and transportation policy in the Government of Canada.

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