Businesses, Ottawa must unite over climate
do you get when a banker, an oil executive, a miner and a big-agriculture player walk into a virtual conference together? A big ask for federal government activism — and that’s no joke.
The event in question was pure business establishment — David McKay, CEO of Royal Bank of Canada; Susannah Pierce, president of Shell Canada; Karn Manhas, who heads Terramera, a sustainable agriculture company based in Vancouver.
The headliner was Don Lindsay, president and CEO of Teck Resources, who knows a thing or two about government intervention gone awry. His company was at the heart of the controversial multibillion-dollar Frontier oilsands proposal that divided the federal cabinet two years ago and was eventually nixed — by the company — for being more trouble than it was worth.
The quartet was corralled by the Business Council of Canada to celebrate Lindsay’s tenure as chair, and he wanted to signal his top priority: setting a 30-year path for economic prosperity by thoroughly embracing the business of climate change.
“We need to lean into that potential, because if we don’t, others will,” he argued.
Teck can make a lot of money from the surging demand for copper that will come from the widespread electrification that underpins mandated emissions reductions, he pointed out. But for a broad “leaning in” to be profitable and productive, government needs to be heavily involved.
“We will need to work closely with governments to help put all the pieces together,” Lindsay said, going on to outline a “clean industrial strategy” that ties together government policy, investments and aggressive global marketing.
This is a far cry from the push from big business of the past, the pleas to government to just lower taxes and get out of the way so the private sector can flourish in all its glory. And it’s nothing like the hands-out approach that troubled Canadian companies tend to tumble into when they’re on the brink, hoping government can bail them out and let them live another day.
They want government to make the market. They’re looking to policy-makers to not just set a carbon price, but also to finance infrastructure, encourage research, nurture a customer base and advertise to the world that Canada is flush with natural resources produced in a green way.
“We need to do something different. Policy frameworks are core for that,” Pierce said.
Ottawa seems inclined to say OK, let’s do that “clean industrial strategy” thing — in the name of building back better, the idea that as countries emerge from the pandemic, they need to reconstruct in a way that confronts climate change.
But it hasn’t quite articulated how it will work or how eager it is to jump into bed with oil and gas, mining and Bay Street. To be sure, there are many policy pieces in the works, but the vision required to set a strategy isn’t there yet.
It may well be coming. Industry Minister François-Philippe Champagne is planning a major speech soon to set out his goals. Natural Resources Minister Jonathan Wilkinson is pushing for the next budget to focus on clean energy and on pushing the economy, region by region, towards net-zero emissions by 2050. And Environment Minister Stephen Guilbeault is on the hook to deliver by the end of March on a five-year plan to cut emissions — a plan that will have to put the oil-and-gas sector on a schedule to completely reform its production methods.
But for all its talk about alignment, the private sector is just not the public sector. Interests are sometimes aligned and sometimes not. Everyone wants prosperity, they all want lower emissions and they all recognize the need to be more aggressive. But for government, pub-What lic accountability must come first, which doesn’t always line up with profits — even if there are subsidies and tax measures in the offing.
For business, government support for carbon capture and storage is central to cutting emissions out of the oil-and-gas process. For environmentalists, support for carbon capture amounts to subsidizing fossil fuels.
For business, regulations and incentives for natural gas and its related infrastructure are important for supplying the world with cleaner energy. For environmentalists, natural gas is just another fossil fuel that has to go.
For business, governments need to focus on regulating and shaping consumers just as much as cracking down on industry. But voters don’t necessarily want to change their consumptive ways if there’s any discomfort or higher prices involved.
The timing is right for business and government both to navigate through these issues.
For one, as the pandemic wanes, now is the time for solid strategic thinking in both the public and the private sectors about how to make good on the “build back better” promise. Second, much of the rest of the world is moving aggressively towards net-zero emissions, and it’s in our competitive interest to make sure we’re not behind.
Third, the pandemic has conditioned the public to accept government intervention in the economy as not necessarily a force for evil.
And after being slammed by several devastating climate events over the past few years, the Canadian public has taken to heart that climate change is no joke.
‘‘ We need to do something different. Policy frameworks are core for that.
SUSANNAH PIERCE PRESIDENT OF SHELL CANADA