Resistance Theory: The Freedom Convoy’s Place in our Divided History

If there is a politico-historical thread running from Louis Riel and the buffalo-hunting Métis rebels in Confederation-era Manitoba, via Ottawa’s creation of three second-class Prairie provinces, followed by decades of friction over resource ownership and taxation, all the way to the convoys of diesel-powered trucks that rumbled into Ottawa to protest federal vaccine mandates in the winter of 2022, few have taken note. David Solway is one. As the main convoy leaders await a court verdict, Solway is taking the long view. He asserts that the truckers’ protest is a powerful contemporary manifestation of a recurring theme – perhaps the defining theme – of how Canada is governed, and to whose benefit. But while Canada’s late-19th century leaders were flawed men who made mistakes, Solway finds, the country’s current federal leadership appears outright bent on destruction.

Canadian society has evolved since 1867, but the basic outline of our national political institutions has not. As was the case in 1867, these institutions still lack the capacity to accommodate regional circumstances and regional equality.

—Donald J. Savoie, Democracy in Canada: The Disintegration of Our Institutions

The winter 2022 truckers’ protest against Prime Minister Justin Trudeau’s punitive vaccine mandates that shook Canada to its foundations no longer dominates the headlines. But it remains in public consciousness. Prominent protest members were recently convicted or are still on trial. Its implications are still with us and its long-term effects may well be seismic. The Freedom Convoy traversed the country from Prince Rupert, British Columbia to the nation’s capital in Ottawa to protest the biggest experiment ever in authoritarian rule over Canadians. The truckers and their fellow convoy travellers demanded the attention of a disgraceful prime minister, the abolition of the vaccine mandates, and the restoration of the tenets of the Canadian Charter of Rights and Freedoms that had been abused by the prime minister, his cabinet, his bought-and-paid for media mercenaries, and his penchant judiciary.

Writing in C2C Journal, Gwyn Morgan reviews the origins of the event: “Just as the provinces were ending restrictions on the unvaccinated, the Prime Minister proclaimed that returning unvaccinated truckers would be required to ‘quarantine’ for two weeks, a condition that would be impossible to meet.” After two years of dutifully serving their country, Morgan writes, “the truckers were to be thrown out of work – cast aside like unneeded accoutrements.”

The February 2022 Freedom Convoy sought an audience with the prime minister to push for the reversal of vaccine mandates, but while the protest was entirely peaceful and at times even festive, the truckers faced harsh treatment; many were arrested and some remain in prison today. (Sources of photos: (top left) Emilijaknezevic, licensed under CC BY-SA 4.0; (top right and middle) Maksim Sokolov (Maxergon), licensed under CC BY-SA 4.0; (bottom) Ross Dunn, licensed under CC BY-SA 2.0)

In reaction to official disregard amounting to scorn, vast columns of rigs and trucks “drove along thousands of kilometres of wintery roads to converge upon the nation’s Capital to protest in front of its Parliament buildings. The atmosphere was peaceful, even celebratory. Prime Minister Justin Trudeau refused to meet with the blue-collar truckers, whom he slandered as vandals, racists, misogynists, antisemites, and more,” finally invoking the never-before-used Emergencies Act (successor to the almost-never-used War Measures Act) to crush the protesters.

Two years later, little has changed in Canada. Coming to the defence of a trucker, Jay Vanderwier, who had parked his rig during the protest where police had directed him, who later submitted peacefully to an arrest done unnecessarily at gunpoint, and who was recently convicted of two criminal counts of mischief by a pliable, Liberal-friendly judiciary, former Conservative MP Derek Sloan recalls that when other protesters have come to Ottawa, mainly First Nations officials, “Trudeau would gladly meet them, take a knee, drop the flag to half-mast for months on end, issue endless apologies, and more. But when these honest, hard-working Canadians came to Ottawa, he showed nothing but contempt. [H]e tried to paint them as violent extremists and seditionists.” Though less famous than protesters Tamara Lich, Chris Barber or Pat King, Vanderwier – like other equally unsung protesters – was just as committed, put just as much at risk and has suffered similarly.

Not a glowing CV: Having “never done what most people would consider a full day’s work in his life,” Justin Trudeau’s pre-office record of achievement featured being a substitute drama teacher and snowboard instructor with an apparent passion for costume parties.

And Trudeau is still on the warpath. This is a prime minister, says former Calgary Herald editor David Marsden with considerable justification, who has “never done what most people would consider a full day’s work in his life.” He certainly never sat in the cab of a semi. He certainly never raised cattle, worked on a farm, hauled timber, fished the rivers, or risked his life on an oil rig. He never tried to start a restaurant or open a business. He’s never had to meet a payroll when money was tight, or negotiate with investors and creditors. He has never excelled in any professional capacity. He has never brought a new product to market, or sold anything except his own brand. The son of a former prime minister and the beneficiary of a family trust, he did a stint of substitute teaching and was a snowboard instructor. Not a glowing CV.

“The prime minister doesn’t like Alberta,” Marsden continues, “His government policies have been designed to bring the province to its knees. He swallowed the Pollyanna spittle [about green energy saving the world] being peddled by his environment minister,” the ineffable Steven Guilbeault who, along with deputy prime minister Chrystia Freeland, is part of the figurative three-headed Cerberus that guards the gates of Canada’s political underworld.

Disdainful of the hardworking, energetic and still somewhat rural-based West, Trudeau, a gilt-edged Laurentian aristocrat, represents precisely what the problem is with this country. We might say that he and his fellow aristocrats are the ‘first cause’ of the truckers’ revolt, which he has done everything in his power to malign and punish.

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In essence, Trudeau is the perfect exemplar of the Eastern anointed class, the so-called Laurentian Elite (or Laurentian Consensus), a term coined in its modern sense a dozen years ago by John Ibbitson in the Literary Review of Canada and elaborated in his book, The Big Shift, co-authored with Darrell Bricker. Defined as “the political, academic, cultural, media and business elites” of central-east Canada, the term draws upon the much older “Laurentian School” of thought concerning Canada’s founding structure and originating purpose developed by mainstream (Eastern Canadian) historians like Donald Creighton. Ibbitson floated an early and rather exaggerated conviction of Laurentian collapse at a time when Justin Trudeau was a Liberal apparition planning his triumphal future and that of his Laurentian cohorts. Interestingly, The Big Shift was reprinted in 2014. One year later Trudeau swept into power, completely invalidating the book’s thesis.

Ibbitson is a parenthetical figure, a Globe and Mail journalist, whose relevance resides in the useful neologism he provided and in his status as a representative and influential Laurentian himself, as essay and book make clear. Ibbitson acknowledged that the Western provinces had been treated as “semi-colonial possessions” rather than equal members in Confederation. But he thought all had changed. “The West is in,” Ibbitson declared. “In fact, it is in charge.” This was his assessment of the effect of Stephen Harper’s Conservative government – which has proven utterly ephemeral. Harper may have been “Canada’s First Post-Laurentian Prime Minister”, as claimed in this journal, but it was not to last. Under Trudeau, the West is as out as it’s ever been. And the country as a political entity is less Canadian than it’s ever been. The Laurentian cabal lords over us still, dominant and unaccommodating.

“The West is in,” declared Toronto Globe and Mail columnist John Ibbitson in The Big Shift; his thesis proved to be premature, exaggerated and even invalid after Trudeau came to power, re-establishing the Laurentian approach to national governance.

Writing in the National Post, John Weissenberger has no doubt of the fact. “The Laurentian Elite were Upper Canadian Anglo-Protestants and Québécois Patricians, and their descendants still dominate the upper strata of politics, the bureaucracy, Crown corporations and agencies, academia and media,” the Montreal-born Alberta geologist wrote. The current generation of Laurentians, he notes, “Largely reflect the universal, broadly-leftist monoculture.” They are with us like a dirty shirt. Their “torpor and complacency,” however, “coupled with an increasingly arrogant detachment from many ordinary Canadians, particularly those outside central Canada, caused repeated social and political rifts.” The truckers’ protest was among the most physical of these – and could prove the most momentous.

Disdainful of the hardworking, energetic and still somewhat rural-based West, Trudeau, a gilt-edged Laurentian aristocrat, represents precisely what the problem is with this country. We might say that he and his fellow aristocrats are the “first cause” of the truckers’ revolt, which he has done everything in his power to malign and punish. Absent Trudeau and his nasty, ill-advised and unnecessary Covid-19 policies, the trucks would never have rolled.

Louis Riel Would Have Understood the Truckers

To properly understand the truckers’ opposition to the Trudeau Liberals’ vaccine mandate, we need to go back to Canada’s beginnings. The British North America Act of 1867 (later renamed the Constitution Act, 1867) recognized a self-governing Dominion comprising a rump Quebec and Ontario and the Maritime provinces of Nova Scotia and New Brunswick. What was known as Rupert’s Land covered the vast extent of the interior landmass, including what later became Manitoba (1870) and Saskatchewan (1905). Alberta (1905) was carved out from both Rupert’s Land and the adjacent North-Western Territory.

The administrative core of the new country, however, was found in the centre-east with its capital in the backwater town of Ottawa. As we have seen, what came to be known as the Laurentian Compact exercised political and economic control of the fledgling nation and, as noted, remains the administrative, political and financial power-centre to this day.

In 1867, the newly created, self-governing Dominion of Canada included several provinces, soon followed by the purchase of Rupert’s Land (left map), parts of which later became the second-class provinces of Manitoba, Saskatchewan and Alberta; political and economic control over the young nation rested in the hands of the Laurentian Compact, the elite based in the St. Lawrence River watershed (right map). (Source of maps: (left) Golbez, licensed under CC BY 2.5; (right) Kmusser, licensed under CC BY-SA 2.5)

To understand in yet greater detail the gravamen of the truckers’ protest, one must return specifically to the period between 1869 and 1885. These years saw the Red River Rebellion and the subsequent North-West Rebellion, studied in meticulous, close-packed detail in George Stanley’s magisterial The Birth of Western Canada: A History of the Riel Rebellions and Tom Flanagan’s illuminating essay in The Dorchester Review.

When the newly installed Canadian federal government took formal control of Rupert’s Land in 1870, it did not consult with the indigenous Métis, aka the Bois-Brûlé population (children of the union between First Nations women and French and English trappers). Local resentment at being passed over led eventually, under the leadership of Louis Riel, to a Métis uprising, resulting in the formation of a provisional government for purposes of negotiation with Ottawa regarding terms of entry into the Canadian Confederation.

This initiative did not work out well and the Métis did not flourish under the new dispensation. In the course of time a large proportion of Métis lost title to their land, which ultimately contributed to the bloody North-West Resistance of 1885, culminating in the total victory of the federal government, a string of executions including that of Riel, and the further deterioration of relations between the Prairie West and central Canada, which continues to this day. There were, of course, atrocities on both sides, but there is no doubt that the Métis got the short end of the stick.

Canada’s newly established federal government failed to consult with the Métis population of Rupert’s Land, which triggered an uprising under Louis Riel (left) and eventually the bloody North-West Resistance, which was crushed by federal troops. Shown at right, the Battle of Batoche during the North-West Rebellion. (Source of left photo: Manitoba Historical Society Archives)

In his 1954 book Social Credit and Federal Power in Canada, political scientist James Mallory described the Prairie additions as “provinces in the Roman sense.” (According to the Oxford Classical Dictionary, the origin of the term is obscure, “mistakenly derived from pro + vincere [vanquished] by Roman antiquarians. Its basic meaning is the sphere in which a magistrate is to function.” In his recent C2C essay on Alberta’s future, University of Calgary professor Barry Cooper went with the more martial version of the disputed etymology.) In our terms, the Prairie provinces were regions dominated by the ruling, administrative centre to whom they owed fealty and paid tribute. Parsing Mallory, Cooper explains: “Ottawa acted as a new Rome on the Rideau. The territories (and soon-to-be second-class provinces)…existed to strengthen and benefit Laurentian Canada by analogy with Roman Italy, and to enrich its leading citizens.”

‘We desire, and all Canadian Patriots desire,’ stated Sifton, ‘that the great trade of the prairies shall go to enrich our people to the East, to build up our factories and our places of work, and in every legitimate way to our prosperity.’

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Here we must refer to the record of the influential Sir Clifford Sifton in the years 1895-1905. As J.W. Dafoe writes in his biography, CLIFFORD SIFTON in Relation to HIS TIMES, Sifton was a major figure in early Canadian affairs, joining Wilfrid Laurier’s Liberal government in 1896. He became federal Minister of the Interior and Superintendent General of Indian Affairs, responsible for immigration and settlement of the Prairies. Under his leadership, immigration to the Prairie West increased from 16,835 in 1896 to 141,465 in 1905. Against attacks by English-speaking Canadians who feared that immigrants from eastern and central Europe would be a threat to their culture and livelihood, Sifton famously defended the “stalwart peasants in sheep-skin coats” who were turning some of the most difficult areas of the West into productive farms. Sifton touted the phrase the “Last Best West” to market the Canadian Prairies to prospective immigrants.

But there was another side to Sifton which also needs to be conceded. According to the Alberta Prosperity Project, Alberta and the Prairie West have gotten a raw deal from the central establishment since their inception as part of the Dominion. The editors quote Sifton’s speech to Parliament during its 1904 session: “We desire, and all Canadian Patriots desire, that the great trade of the prairies shall go to enrich our people to the East, to build up our factories and our places of work, and in every legitimate way to our prosperity.” As former military engineer and warrant officer Tex Leugner commented in the Cochrane Eagle, “Note the phrase ‘to enrich our own people in the East’! How prophetic Sifton was in laying the groundwork for the theft that has gone on unabated since 1905.”

The Laurentian view, crystallized: Sir Clifford Sifton, Minister of the Interior and Superintendent General of Indian Affairs, famously defended the “stalwart peasants in sheep-skin coats” who were used to settle the Prairies and whose trade “shall go to enrich our people to the East.” (Sources of photos: (left) Library and Archives Canada/PA-27943; (right) Library and Archives Canada/C-000681)

The question was also examined by Mabel F. Timlin in a paper titled Canada’s Immigration Policy, 1896-1910, printed in the Canadian Journal of Economics and Political Science (Vol. XXVI, No. 4, November 1960, pp. 517-532). Timlin cites Sifton’s letter of April 15, 1901 to Laurier in which Sifton advocates the importance of “encouraging immigration for the development of natural resources and the increase in production of wealth from these resources.” The wealth so generated comes to rest mainly in the coffers and consortiums of the East. The intimation is disturbing. Sifton was a man of the West, the de facto founder of the province of Manitoba. At the same time, he was also a man of the East, working to enrich its power and economic nexus. A veritable Jekyll and Hyde, Sifton is a symbol of a divided Canada, a country that has not yet decided what it wants to be.

The Modern-Day Laurentian Economic Model

Commenting on the present imbroglio in which the country finds itself, Leugner takes issue with Laurentian profiteering and self-aggrandizement specifically in the form of Canada’s so-called “Equalization” program. The federal government describes it as a means “for addressing fiscal disparities among provinces”; equalization works by indirectly transferring revenues drawn from the taxpayers of more-productive and higher-income provinces to less prosperous provincial governments.

The Prairies are Canada’s food and energy breadbasket and have suffered under the rule of Eastern Canada’s Laurentian peerage, more recently with former Prime Minister Pierre Trudeau’s low-pricing, high-taxing National Energy Program (NEP) in 1980, which devastated Alberta’s oil industry and entire economy.

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One can see the intrinsic problem for a country where some jurisdictions perennially lag and others consistently out-perform. Alberta’s average equalization contribution is substantially over-leveraged. According to the Canadian Taxpayers Federation, equalization has cost Alberta taxpayers $67 billion since its inception in 1957, making the cost of equalization per Albertan $20,200 since 1957; in 2021, equalization overall cost Alberta taxpayers $2.9 billion. The Fraser Institute pegs the 2017 net outflow at $3.1 billion. Estimates may vary but remain within the same ballpark.

Since the inception of Canada’s equalization program in 1957, Alberta has made a net contribution of $67 billion – which in turn represents only a small part of the province’s immense financial contribution to federal coffers and the governments and residents of other provinces.

Even more significantly, the Fraser Institute notes that the equalization drain represents “just a small part of the province’s outsized contribution to confederation in recent years.” It calculates that “the gap between Albertans’ contribution to federal revenues and federal expenditures plus transfers to the province, totalled $20.5 billion annually in 2017/18. And this measure excludes Albertans’ disproportionate cumulative contribution to the Canada Pension Plan, which on net totalled $2.9 billion in 2017.”

Meanwhile, as Alberta is being plundered, Justin Trudeau, like his father Pierre, is doing everything in his power to eviscerate Alberta’s energy industry, the source of its prosperity and of Canada’s solvency. Indeed, the recently completed Trans Mountain Pipeline expansion, shipping oil at last after a horrendous nearly 15-year gestation, is slated to contribute 0.25 percent to Canada’s GDP growth next year – more, indeed, than the entire province of B.C. Leugner concludes, despairingly: “It is my opinion that Canada, as it’s currently structured, is a broken nation.” This from a veteran, much-deployed officer in the Canadian military.

“The province that carries most of the weight, bears the most pain”: Alberta’s oil and natural gas industry and entire economy were devastated by the taxes and regulations of Pierre Trudeau’s (top) 1980 National Energy Program; today Alberta’s burden is amplified by the younger Trudeau’s onerous carbon tax. Shown at bottom, a pro-pipeline demonstration in Calgary, Alberta. (Source of bottom photo: The Canadian Press/Jeff McIntosh)

The Prairies are Canada’s food and energy breadbasket and have suffered under the rule of Eastern Canada’s Laurentian peerage, particularly with former Prime Minister Pierre Trudeau’s low-pricing, high-taxing National Energy Program (NEP) in 1980, which devastated Alberta’s oil industry and entire economy. Justin Trudeau is picking up where his father left off, slapping an onerous carbon tax on the nation that has already pulverized the national economy and has proved especially costly to Prairie agriculture and energy production. As the late Rex Murphy wrote in the National Post, Alberta is “the province that carries most of the weight, bears the most pain and has the least say in this mad enterprise.”

The tax, Murphy continued, will “injure the very farmers who have been stocking the supermarket shelves during COVID, put oil workers (at least those who still have jobs) out of work, and increase the cost of living for everyone…This new carbon tax will throw a spike in the heart of the oil and gas industry. Keep in mind that it is but the most recent in a long string of policies designed to hamstring the industry, block its exports and drive investment out of the province.”

The Enduring Meaning of the Truckers’ Protest

Section 92A [of the Constitution Act] confirms the constitutional foundation for provincial natural resource management and a significant role in natural resource trade and anchors Alberta’s energy resource economic strength. This is Peter Lougheed’s economic legacy for Alberta.

—ABlawg.ca

This is how we need to understand the truckers’ massive 2022 protest, nominally a form of domestic resistance against the vaccine mandates that crippled their health and their livelihoods, as it did the nation in large. But it is fundamentally an expression of the greater historical context of Eastern political, legislative and market domination of the Western provinciae and the determined response of a long misprized, undervalued and misrepresented sector of the nation, rising up against the metaphorical equivalent of the federal government’s 1885 land grab.

Resistance is continuing to mount. The province of Saskatchewan has refused to pay the federal government’s carbon levy and has just been granted an injunction to stop the Canada Revenue Agency from simply garnisheeing the (mounting) outstanding sum. Alberta Premier Danielle Smith’s UCP government introduced and quickly passed the Alberta Sovereignty Within a United Canada Act in response to proposed federal net-zero electricity grid regulations and other recurring intrusions on the province’s core jurisdictions. “We are left with no choice but to create a shield to protect Albertans from Ottawa’s dangerous and unconstitutional electricity regulations,” Smith said at the time. She has also proposed an Alberta Crown Corporation that would be wholly owned by the province and over which the federal government could exert no control, which would function as a market generator.

To defend against the federal government’s ongoing intrusions on Alberta’s constitutional jurisdiction, Danielle Smith’s (top) UCP government passed the Alberta Sovereignty Within a United Canada Act – a “shield to protect Albertans from Ottawa’s dangerous and unconstitutional electricity regulation.” Shown at bottom, supporters of the Sovereignty Act gather in Edmonton, Alberta, December 2022. (Sources of photos: (top) Alberta Newsroom, licensed under CC BY-NC-ND 2.0; (bottom) Caleb Perreaux/CBC)

As to be expected, the Sovereignty Act has been denounced by all the usual Laurentian suspects and Liberal toadies: the CBC, The Globe and Mail, the Toronto Star and many others. No matter. The aforementioned Barry Cooper places Alberta’s Sovereignty Act in the context of the Prairie provinces’ long struggle for due constitutional recognition and the political equality of their citizens. And he is right. The germ of the issue goes back to the unequal founding of Canada as a Confederation and is now culminating in manifestations like the Freedom Convoy and its consequences, Saskatchewan’s defiance of Trudeau’s carbon tax and Alberta’s long-deferred Sovereignty Act.

The truckers’ Freedom Convoy was not just a desperate response to the Trudeau government’s ruinous vaccine mandate but, the author believes, a historically significant attempt to restore the political balance between Eastern and Western Canada. (Source of photo: Maksim Sokolov (Maxergon), licensed under CC BY-SA 4.0)

The Canadian Constitution establishes that the federal Parliament deals mainly with issues that concern the country as a whole, including inter-provincial trade, national defence, criminal law, money, patents, and the postal service, whereas the provinces have the authority to make laws about education, property, civil rights, the administration of justice, hospitals, municipalities, and other local or private matters. Lands and resources within or lying beneath provinces are also clearly-stated areas of provincial jurisdiction and ownership. Pointedly, “Crown” lands are almost always owned by the Crown in right of the province within which they fall.

The federal government has no business intruding on the rights of the provincial domain as guaranteed by the Constitution. But under Trudeau the Younger, that is virtually all it does. Ottawa has gone even further in moving to centralize political control in the Prime Minister’s Office rather than respecting provincial jurisdiction.

The truckers’ response to the federal usurpation of plenary authority under cover of a pandemic was in the last analysis an attempt to right the political, economic and administrative balance between Eastern and Western Canada. Laurentian hegemony had to be cut down to size, and though it appeared that the federal power had once again – as in the 1885 hecatomb of the Prairie rebels – won the day, routing the truckers, confiscating vehicles, freezing bank accounts, imprisoning its leaders and mobilizing the legacy media to blanket the nation with lies, the aftermath was an awakened and defiant Western Canada, an almost universally hated prime minister, a Liberal party on the ropes, and a gradual vindication of the Truckers’ bravery and suffering in an honourable and democratic cause.

Justice is now Being Served

Let not my people be held at ransom.

Let them thrive, let them be defended.

—Louis Riel, from Selected Poetry of Louis Riel

“The North-West Rebellion was far more important in its results than in itself,” wrote the aforementioned George Stanley in The Birth of Western Canada. The truckers’ descent upon Ottawa is one of those later results of the Red River Rebellion that Stanley had considered to be of enduring significance. The analogy suggested by the reliable trucker supply chain over the years and during the pandemic, namely, of the West feeding the East with comestibles, goods and energy, should have been obvious to any observant person. Justice is now being served. The protest inspired confidence in its purpose, exposed the federal government as an authoritarian leviathan, and led to the responses that we are witnessing in Alberta and Saskatchewan.

Should the respective powers and responsibilities of federal and provincial authority be clarified and genuinely ratified, should a fair distribution of obligations and prerogatives between Ottawa and the Western capitals be arrived at, the truckers may yet have saved the country from its downward spiral.

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At this historic juncture, the Laurentian elite must agree to terms and make peace with the Prairie West if both are to become true partners in a renovated Confederation. At the moment, the most important city in Canada is not to be found in the Laurentian triangle of Toronto, Montreal and Ottawa. Despite its current problems with an unpopular mayor and a compromised infrastructure, the most important city in Canada today is Calgary, not only the home of the world-famous Calgary Stampede, but also “the epicenter of the energy industry in Canada with head offices of every major company…located in the city,” as an upcoming global energy conference describes it.

The nation’s most important city, the author argues, is not Ottawa, Toronto or Montreal, but Calgary – home of the world-famous Calgary Stampede and “the epicenter of the energy industry in Canada with head offices of every major company.” (Sources of photos (clockwise starting top-left): micha_dauber, licensed under CC BY-NC-SA 2.0; Gnosis, licensed under CC BY-SA 4.0; Ron Cogswell from Arlington, Virginia, USA, licensed under CC BY 2.0; JHVEPhoto/Shutterstock)

The irony is exquisite. Should the respective powers and responsibilities of federal and provincial authority be clarified and genuinely ratified, should a fair distribution of obligations and prerogatives between Ottawa and the Western capitals be arrived at, the truckers may yet have saved the country from its downward spiral and helped to create the just and equable Canada that it should have been from the beginning. As the above-quoted Savoie writes in Democracy in Canada, “Canada was born to break the political deadlock between Canada West and Canada East.”

It was a long road from Prince Rupert to Ottawa, but a road, as it turns out, that had to be travelled.

David Solway’s latest prose book is Crossing the Jordan: On Judaism, Islam, and the West (New English Review Press, 2023). A new poetry chapbook, From the Sommelier’s Notebook, was released in July 2024 (Little Nightingale Press). Solway has produced two CDs of original songs: Blood Guitar and Other Tales (2014) and Partial to Cain (2019) on which he is accompanied by his pianist wife Janice Fiamengo. A third CD, The Dark, is in planning.

Related Topics:#C2CJournal #FreedomConvoy Canada'sDividedHistory DavidSolway WesternCanada

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

Published on November 25, 2024

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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.

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.

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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.

Oil and natural gas are critical inputs that 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.

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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.

Trump’s ‘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.

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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 47^th 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.

C2C Journal

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

Published on November 16, 2024

Todayville

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:

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.
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.
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.
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.

Of 15 possible policy measures to respond to climate change, the Copenhagen Consensus panel ranked carbon taxes the very worst – something that’s of obvious relevance to Canada. Also of interest in the Canadian context was the experts’ strong endorsement of research into carbon storage.

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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.

The federal government’s 2030 Emissions Reduction Plan could add about $55,000 to the average cost of a new home built in Canada. 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.

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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.

Fairly soon, 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.

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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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