Recognizing Canada’s Stake in Leading the Energy Transition

There has been much recent debate in Canada on the emerging Energy Transition.

There has been much recent debate in Canada on the emerging Energy Transition. In the wake of the COVID-19 pandemic, this could not come at a more opportune time. Capitalizing on Canada’s inherent energy resource wealth and expertise provides a significant opportunity to address the fiscal imperatives wrought by the COVID-19 pandemic. As well, it presents a historic opportunity to bridge the divide between energy and environmental interests — much of which has been due to misinformation and misunderstanding— and chart a course to a sustainable low emissions future.

The energy industry is central to the Canadian economy and to maintaining Canadians high standard of living. It has been reported that the Canadian oil and natural gas industries alone contributed more than $109 billion to Canada’s GDP last year and that tax revenue generated is likely to surpass $450billion over the next 10 years. Meanwhile,due to COVID-19 relief spending, the federal government predicts Canada’s2020 federal deficit will be $343 billion— almost a ten-fold increase over2019. Canada’s total debt is estimated to be $1.2 trillion, and this doesn’t include significantly increased provincial and municipal debt. A recent report1by a coalition of business, labour and indigenous groups argues that Canada’s energy and natural resources sector could create up to 2.6 million jobs — an opportunity virtually unmatched by other realistic growth opportunities.

Aside from domestic economic imperatives, there are global reasons for Canada to focus on this transition.Canada’s voice has, historically, been recognized on the world stage where energy development, innovation and accountability are concerned. That said, if the energy industry in Canada wanes, so will Canada’s international stature. Without a viable energy industry, Canada will lose the ability to develop, promote and advocate globally for the new energy related technologies and standards that are critical to transitioning Canada and other countries to sustainable energy development.

Importantly though, if Canada wants to be part of leading the energy transition,Canadians need to have a frank and honest dialogue that acknowledges the centrality of the energy sector to Canada’s economy and all citizens’ well-being, as well as the opportunity for the industry to address the current fiscal challenges; likewise, the sector must support Canada’s evolution to a lower carbon energy supply mix and maintain unwavering focus on continuing the significant achievements it has made over the last decade in reducing carbon emissions, while also maintaining momentum on consultation and engagement with indigenous groups and other stakeholders. All these principles need to be embedded in smart regulation and project development best practices.If Canada does not take this approach,we will lose on all fronts — economic and environmental. We will have failed to tap and leverage our incredible resource wealth and decades of Canadian investment, experience and expertise;we will cede leadership in the global energy transition to others; and, make no mistake, curtailed energy development in Canada will be replaced by production from countries without the same mindset and interest in responsible energy development.

Canada will need governments at all levels to work collaboratively with innovators to facilitate energy-related project development and implementation within a more responsive and agile approval framework. Rather than engaging in polarized dialogue, we should “Canadian lag” the successful efforts of the Canadian energy industry to transition from a high to low carbon emitter and the new technologies that have been implemented to dramatically reduce the GHG emissions. Recent examples include new carbon capture and storage technologies, partial oil sands upgrading technologies, methane “cleantech”, water intensity reduction projects and hydrogen blending technologies.

This is no easy feat, but with vision and commitment by governments, industry,indigenous groups and others, responsible development can be pursued in ways that mitigate the fallout from the COVID-19pandemic and deliver economic benefits to Canadians, all while charting a course to a net-zero emissions future. Canada can become recognized on the world stage as an innovator in delivering low-carbon energy within an environmentally-focused framework that combines improved regulation, policy and innovation. This is what stands to define Canada in 2021and beyond.


For further information Stikeman Elliott’s publications on Canadian energy law can be found at
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