The isn’t so "just", Just Transition

Sustainable Jobs Act

Canada’s Liberal government under Justin Trudeau has this habit of ideologically rushing into things without much further consideration of effects, impacts, other solutions, or long-term consequences.

We saw it with Bill C-21 gun ban, which went after hunting rifles (a tool) and had to be revised because it was such a colossal failure. They even banned the Butt Master – a one-bullet ‘gun’ made as a gag over 20 years ago and never left the inventor’s possession.

We are seeing it with mass immigration which has no consideration to impact on real estate, affordability, or streamlining their education recognition so they can hit the ground running. New immigrants represent a high usage rate of food banks.

We are now seeing it with the longtime mused Just Transition. A lingo that came from UN’s Intergovernmental Panel on Climate Change, which now had a minor re-branding to the Sustainable Jobs Act and a first step with Bill C-50.

There aren’t many details, but of course, the government will bloat with a new office to oversee the process and consultations. Bill C- 50 officially starts the consultations with a plan to be released in 2025. The bill requires the government to report and update on how it is supporting workers and creating jobs in the energy sector every five years.

The whole Just Transition - Sustainable Jobs Act set sail from the Paris Agreement in which Canada has committed to net zero emissions by 2050 and doubled down with the Canadian Net Zero Emissions Accountability Act to set things in motion. It also establishes the 2030 greenhouse gas emissions target to be 40%-45% below 2005 levels.

This is what the Act looks like:

The “Net Zero Emissions” should raise some questions. Here is how it’s defined:

net-zero emissions means that anthropogenic emissions of greenhouse gases into the atmosphere are balanced by anthropogenic removals of greenhouse gases from the atmosphere over a specified period. (carboneutralité)

Humans put greenhouse gases into the atmosphere and people need to remove the equivalent amount out. Sounds fair enough but how is it calculated is the big question. How are the 270 million hectares of Canada’s boreal forests sequestration, and tree planting calculated, for example. Since the Liberals are failing their own tree planting quotas will it be the industry’s fault tomorrow that targets aren’t achieved?

Moving or losing industry and production offshore because of these climate goals at the expense of our industry is economically debilitating but also just moves the emissions elsewhere, is that being honestly calculated?

There is too much freedom for ‘creative accounting’ that has serious economic consequences and interpretation as support for policies.

Canada is an innovative country and our GHG emissions have been dropping since the 2005 target. In 2005 Canada produced 732 Mt CO₂ eq and 670 of Mt CO₂ eq in 2021. But I have to remind you that the goal is to be 40% below 2005 levels in six and a half years.

Just how ridiculous is the target? In 2021 oil and gas accounted for 28% of Canada’s GHG emissions and transportation accounted for 22%. You can get rid of the whole oil and gas sector and half of the transportation sector and barely hit the target.

You now see why both industries are so heavily targeted. As many people as possible need to be shoved onto public transportation and bicycles and because the oil and gas sector grew since 2005 so did its emissions.

Canada’s oil and gas sector, however, has been getting very efficient - in fact more efficient than other industries. The extraction emissions intensity in the mining, quarrying, and oil and gas sector was 62.7 tonnes of CO2e per terajoule (TJ) of energy in 2017 (best whole numbers). The iron and steel sector had 69.4 tonnes, 73.2 tonnes in foresty, and 73.3 tonnes in the cement sector. Kitimat’s LNG facility is estimated to have the lowest emissions intensity in the world.

Around 35% of Canada’s average upstream oil and gas CO2 emissions intensity per BOE comes from the oil sands. There is no question that Alberta is rightfully feeling the bullseye even though it has some of the largest renewable projects in Canada in the works. Oil sands emissions intensity fell around 22% since 2011. There are forecasts for about another 20% in emission intensity improvement by 2030.

Regardless of the incredible progress in the oil and gas sector, the government wants to iron-fist the industry. The 2030 Emissions Reduction Plan plans to reduce methane emissions by 40%-45% below 2012 levels by 2025 and now wants to reduce them further by at least 75% below 2012 levels by 2030 through regulation.

That iron fist hits especially hard with the government’s plan to cap emissions in the oil and gas sector. What this proposition entails isn’t clear yet but what is clear is that oil and gas rich provinces will be targeted directly and there will an economic cost to it. Expansion, attracting investment, and the ability to operate within time frames and profitably (especially compared to other jurisdictions globally) will all be at risk.

We can’t talk about the Sustainable Jobs Act without mentioning the “Jobs” part and the economic side of these jobs. It’s a big one.

The hourly labour productivity of oil and gas extraction is $686.7, mining and quarrying is $205.3, non-metallic mineral mining and quarrying is $231.8, potash mining is $567.1, and petroleum refineries is $604.8. Compared to Canada’s total industries’ economic activity of $61.1/h.

Resource sector jobs are the most productive jobs in Canada’s economy. There aren’t many other jobs with the same level of economic contribution per job, so more jobs will be needed to replace the value of just one job in the resource sector. Not only those jobs are “sustainable” but they also sustain a big part of Canada’s economy.

The total value of those jobs; the nominal GDP of natural resources is around 13% of Canada’s economy not including the value of the downstream activities. Canada’s natural resource exports are around 48% of the value of Canada’s total merchandise exports. Hurting those jobs is hurting our economy.

The demand for Canada’s resources isn’t going away. With the promise of mining to manufacturing electric vehicle battery plants planned in Canada, there will be even more demand. The plan to grow Canada’s population by another 60 million people will create even more demand. Canada is and should be an industrial powerhouse. We won the geographical lottery.

Canada needs cheap energy for affordability, competitiveness, and economic growth. That should be the primary focus of sustainability in Canada. We should be the trusted partner in helping other countries transition from the dirtier supply of energy and resources. It will be much more beneficial to global pollution reduction than Canada’s rounding error of contributions which is getting even smaller by itself via innovation.

There is no question we should be coming more environmentally in every step as we move forward and we are. Canada’s share of global emissions dropped from 1.8% in 2005 to 1.5% current. Our GHG per GDP has been dropping for 30 years and is the lowest it has ever been. Canada has been consistently polluting less without the inflationary carbon tax, and without shooting itself in the foot economically.

If the Canadian government wants to help “transition” and create “sustainable” jobs then it should focus on the unskilled and low-skilled labour who are at the highest risk of becoming out of a job and obsolete due to technological advancements.