Trudeau reshuffle buoys hopes on tough Canadian COP26 stance

A reshuffle at the helm of key ministries by Prime Minister Justin Trudeau is raising activists' hopes of a tough Canadian stance at the COP26 climate change meeting, especially Steven Guibeault being handed the environment and climate change brief.

Guilbeault, previously heritage minister, becomes Canada's point man for the UN Framework Convention on Climate Change talks in Scotland, replacing Jonathan Wilkinson, who takes the tiller at Natural Resources Canada (NRC)—a shift that also won plaudits.

But it is Guilbeault, formerly a senior Greenpeace campaigner and before that the founder of the largest environmental organization in his and Trudeau's home province of Quebec, whose appointment garnered the most attention and raised extraction sector fears his boss sought immediately to calm.

The David Suzuki Foundation, a nonprofit, said the reshuffle could augur "concrete leadership" from the Trudeau government at COP26, including raising the potential for Canada joining the Beyond Oil and Gas Alliance, increased support for developing countries in tackling the climate challenge, and more ambitious timelines for domestic emission reduction measures.

Guilbeault has a tough task on his hands across the Atlantic Ocean, because, as COP26 President Alok Sharma told a United Nations Educational, Scientific and Cultural Organization conference 12 October, that the world hasn't done enough since the Paris Agreement to reduce emissions.

A fact the UN Environment Programme emphasized on 25 October, arguing in its latest Emissions Gap Report 2021: The Heat Is On report that even with new and updated climate commitments, the world was on track for a global temperature rise of at least 2.7 degrees Celsius this century, far beyond the aims of the Paris Agreement.

Faith in "Green Jesus"

Entering the House of Commons two years ago, Guilbeault is a "well-respected leader from the environmental movement," the David Suzuki Foundation said. He would take a pivotal role in quickly delivering on Liberal Party promises to make the climate a top priority in the coming parliamentary session, it said.

There's plenty on Guilbeault's plate at home, and Keith Stewart, senior energy strategist at Greenpeace Canada, expressed faith in the one-time theology student who was nicknamed "Green Jesus" by a newspaper in his home province.

"Guilbeault knows the file, he knows the key players and he understands just how much is at stake," Stewart said in a statement. "He's also a practical person who knows the rules, which is important because implementing and raising the Liberal government's climate commitments is going to take the whole government pulling hard in the same direction."

Rick Smith, president of the Canadian Institute for Climate Choices, told Net-Zero Business Daily that Guilbeault's leadership would be crucial in transitioning Canada to a "prosperous, low-carbon future."

Guilbeault's appointment was no coincidence, with Trudeau well aware of the response at home and abroad that the change from Wilkinson would bring, according to one analyst Net-Zero Business Daily spoke to.

However, in a speech announcing his cabinet 26 October Trudeau said that the government would bring the same focus and urgency it brought to combatting the COVID-19 pandemic to fighting climate change, with plans in Glasgow to challenge the world to cut GHG emissions even faster.

At an earlier high-profile climate meeting in 2021, the Leaders Summit on Climate organized by US President Joe Biden, Trudeau pledged to reduce Canada's emissions by 40% to 45% compared with 2005 levels by 2030, before reaching net zero in 2050. The previous 2030 target was 30%.

Trudeau's instructions for Guilbeault in his mandate letter will prove key going forward, observers say. Trudeau was the first Canadian prime minister to publish ministers' marching orders; previously mandate letters remained private. Much of what ministers can do depends on the prime minister, with many observers waiting to see how long a leash and what priorities Guilbeault will be handed.

The appointment of a new Cabinet, including Guilbeault, Wilkinson and his predecessor at NRC Sean O'Regan, followed a snap election called by Trudeau in September that sought backing for his economic recovery plan and policies including a clean electricity standard and reduced subsidies for the oil and natural gas industry.

IHS Markit Principal Global Risks Advisor John Raines told Net-Zero Business Daily in the aftermath of the 20 September election that only brought another minority government that Trudeau was likely to continue with his established climate change policy agenda.

The policies can be expected to increase operating expenses for the hydrocarbon sector, particularly those dependent on carbon-emission-heavy processes such as the oil sands, said Raines.

Alberta's worries

The burden for Canada's coming emissions cuts is most likely to fall on transportation and oil and gas sectors. IHS Markit data show just over 80% of Canadian power generation is currently carbon-free, thanks in large part to hydropower, and that figure is likely to reach nearly 90% by 2050.

Prior to the election, the Liberals promised the public they would make sure the oil and gas sector's emissions would decline from current levels at a pace and scale needed to achieve net-zero by 2050, with five-year targets starting in 2025. In addition, companies would be required to reduce methane emissions by at least 75% below 2012 levels by 2030.

On 26 October, Trudeau confirmed this commitment. At the same time, he promised to support workers in the hydrocarbon industries in keeping and finding jobs.

The oil and gas sector is Canada's biggest source of export revenue. Crude topped the export charts in 2019, accounting for 15.7% of shipments overseas, while refined products and natural gas made up a further 5%, according to the open-source Observatory of Economic Complexity.

Canada is the fourth largest producer of crude and gas in the world, according to NRC data, and the third largest exporter of crude. The US buys 90% of Canadian energy exports. The sector's impact is disproportionate in Alberta compared with other provinces, with around 49% of all Canadian direct employment in the energy sector located in the province.

As a result, the talk of ramping down support for the oil and gas sector and cutting its emissions has raised the hackles of political leaders there regularly. The reshuffle only elevated concerns. Alberta Premier Jason Kenney called Guilbeault's appointment "very problematic" when talking to local reporters and urged him to be practical rather than "absolutist," especially when it came to jobs.

Trudeau sought to assuage Kenney and oil and gas workers' fears when announcing the line-up of his team. Standing in front of the assembled ministers, he said: "We will be committed to working with Albertans, to working with people across the energy sector across the country, as we build the kind of future everyone wants for their kids and grandkids, with both good jobs, prosperity, and cleaner air and fresh water."

Wilkinson, a native of neighboring Saskatchewan who on 25 October unveiled a deal to boost climate financing for developing nations ahead of COP26 alongside counterparts from the UK and Germany, was seen as less threatening by Western Canadians, especially with more of a political track record and a background in private industry, sources said.

The former fisheries minister also has backing from environmentalists though in his new role as head of NRC. Greenpeace's Stewart said he was hopeful tapping Wilkinson for the new brief indicated there would be greater cooperation on climate action across departments, stereotyping his predecessors as the "chief advocate" for the oil industry in government circles.

And the David Suzuki Foundation said Wilkinson's history of leadership on climate and nature would aid a transition to a "net-zero emissions, nature-positive world." It also pushed for NRC create national strategy for climate adaptation.

Oil industry seeks common ground

The oil industry, meanwhile, took a diplomatic stance on the appointments.

"Canadian [oil] producers share the aspiration of Canadians to find realistic and workable solutions to the challenge of climate change," Canadian Association of Petroleum Producers CEO Tim McMillan told Net-Zero Business Daily.

"It will be incredibly important that our industry along with [Guilbeault and Wilkinson] find common ground to work from to ensure Canadian resources and innovation remain a part of the global energy and emissions reduction solution, as well as a growing source of prosperity for Canadians," he added.

And given the ongoing energy volatility around the global, McMillan reminded the government how countries were struggling to provide industries, businesses, and citizens with affordable and reliable energy. So, he said, with the right policy environment, Canadian producers can play a significant role in meeting growing demand while helping to lower global emissions.

The direction on climate matters that Trudeau has and is expected to take down the line has been more amenable to renewable power generators, but it wants more.

Brandy Giannetta, vice-president, policy, regulatory and government affairs, at the Canadian Renewable Energy Association told Net-Zero Business Daily the trade group was pleased, to date, with efforts to set more ambitious 2030 climate targets, as well as commitments to a net-zero electricity system by 2035 and to net-zero GHG emissions by 2050.

However, Canada will need to decarbonize and significantly expand electricity production to help reduce GHG emissions in sectors like transportation, buildings and industry, Giannetta said. As a result, wind energy, solar energy, and energy storage needed to be at the core of Canada's efforts to meet its climate change objectives, she said.

A path to net-zero buildings is a new policy area for the Trudeau government that will be closely watched, Canadian Gas Association Vice President of Strategy and Delivery Paul Cheliak told Net-Zero Business Daily 27 September.

Posted 28 October 2021 by Keiron Greenhalgh, Senior Editor