OTTAWA — Natural Resources Minister Jonathan Wilkinson rejects the idea that climate targets have evolved into an oil-and-gas-killing religion in Canada.
“It’s not a religion, it’s science — and we should be very clear about that,” Wilkinson said, responding to a comment former Conservative Cabinet minister Lisa Raitt made in an interview with POLITICO.
“We are in a climate crisis,” he said. “Underline the word crisis.”
Canada is a major oil and gas producer and faces the daunting challenge of making quick progress in decarbonizing its economy without eating its own industries. It’s tricky terrain for Prime Minister Justin Trudeau’s government.
Panned by the right for turning their back on the fossil fuel industry, the Liberals risk losing votes on the left over the perception they’re soft on Big Oil. Ottawa has recently ratcheted up its high-level engagement with the Biden administration, which is caught in a similar political situation.
The level of tribalism and polarization that has soured the political atmosphere in the United States has had business consequences, making policy uncertainty an unexpected source of financial leverage.
Trudeau told an audience in New York City last week that the U.S. was willing to put “way more money” on the table for a new Volkswagen gigafactory, but in the end the German automaker felt more comfortable parking its cash in Canada.
“Some of the uncertainty with respect to the political scene in the United States actually plays in Canada’s favor,” Wilkinson tells POLITICO. “We have a greater amount of political stability here.”
Here’s more of our conversation — a transcript that has been edited for length and clarity.
What bugs you about what Lisa Raitt said?
Look, I know Lisa very well. A couple things surprised me a little bit. The first is the comment I think she made about [how] this isn’t about decarbonization in the U.S., it’s about jobs — that in Canada, the focus has been really around targets.
I actually think she’s kind of wrong on both of those counts.
If you listen to President [Joe] Biden, and certainly I spend a lot of time with Secretary [Jennifer] Granholm, the secretary of energy. They’re very focused on ensuring the progress they make is aligned with the science associated with climate change. They are also very focused on ensuring they are seizing economic opportunities that can be enabled through a transition.
The other thing, related to the first, is the comment she made about Canada — that we’ve turned these targets into almost a religion. Her point was that there should be more of a broader focus.
It is important for folks in the business community — and I come from the business community — who actually believe the focus and the narrative needs to be very much on economic issues, to also ensure they are acknowledging that this is a science issue. Making progress on climate change means, yes, having targets aligned with what the science says we must do if we’re going to leave a habitable world.
What the average Canadian — and certainly the environmental community — hears when they say, “let’s not talk about targets, let’s only talk about the economy,” is that the business community doesn’t care about climate change. I don’t think that’s true.
What else should we be talking about related to Canada, the United States and the Inflation Reduction Act?
The Americans took a huge step forward with the Inflation Reduction Act. There were positive elements to that and there were challenging elements to that.
The positive was the Americans had done almost nothing on the climate file for the past seven or eight years, so the IRA represented a really big step forward in terms of taking aggressive climate action.
On the challenging side for Canada, they’re spending an enormous amount of money. That created a competitive issue for Canada in some areas.
You have seen us respond, both through the Fall Economic Statement, and through the recent budget, with respect to leveling the playing field for investment.
We’re seeing positive things happen, most recently being the Volkswagen announcement. What I have said to my American colleagues is, let’s be sure on a go-forward basis that we are talking a little bit more about how we move forward so we’re not actually putting more money on the table than we need to incent industrial development. Let’s not make this a race to the bottom.
That enormous amount of money has also made the IRA a target for U.S. debt-ceiling politics. The House Republicans are looking to repeal it. How does that affect your work in courting green investments in Canada?
Some of the uncertainty with respect to the political scene in the United States actually plays in Canada’s favor. We have a greater amount of political stability here.
We also have a number of other attributes the Americans at this stage do not have, like a clean grid. By and large, we can offer companies that locate here clean power, which means the embedded carbon in the products they make is going to be much lower than it can be on the American grid, which still is largely coal.
I am not an expert in American politics, but I think repealing the Inflation Reduction Act will be challenging for any party in the United States because it is incenting the development of enterprises in many jurisdictions that are both Republican and Democrat. We clearly are watching that — irrespective of who wins the election next year.
You mentioned a clean grid and obviously the clean grid in Canada needs to expand. The provinces and territories have a role in that. Can you give a status update on the energy tables?
The most sort of revolutionary part of the budget was the investment tax credit for clean electricity generation and transmission. It represents an enormous step by the federal government into an area that has been provincial jurisdiction, not in a way where we’re telling provinces what to do, but in a manner that we can support some of the work they need to do financially.
It is in all of our interests, both in terms of reducing emissions and in terms of attracting enterprises, that we do have abundant clean energy. I’ve been surprised a little bit that there wasn’t more reporting on that because it was an enormous future investment.
In terms of electricity, and regulatory and permitting processes more generally, those are being dealt with at the table. They’re also being dealt with in the federal system.
The two that are the farthest advanced — because they started earliest — are British Columbia, and Newfoundland and Labrador. I would hope within the next few weeks to be in a position with the British Columbia government to lay out the action plan. It will have a number of different elements, but one will include pilots, with respect to the regulatory and permitting processes in the mining space.
Were you surprised by the coverage of the prime minister’s comments last week that the government is “very serious” about investing more in nuclear?
I was surprised by how much coverage it got, to be honest with you. I don’t think he’s saying anything different from what I and others have been saying for some time, which is, we are in a climate crisis — underline the word crisis.
We have to be open to all non-emitting forms of energy. Nuclear power in parts of this country, and in other countries, is not something some provinces look on favorably, in part because they don’t need it.
Quebec and Manitoba and British Columbia, and Newfoundland and Labrador have an abundance of hydro, which they can use as the backbone — as the base load — for their electricity systems.
But provinces like Saskatchewan and Alberta have no significant hydroelectric capacity. Nuclear certainly has to be one of the options on the table for them.
Help us better understand the Canada-U.S. Energy Transformation Task Force. What are its intended outcomes by the end of its one-year timeline?
What we are looking to do with the transformation task force is really crystallize some of the key things we really need to see move more quickly, and to put the weight of both of the governments behind getting to specific deliverables.
What are you spending a lot of your time thinking about these days?
I spend a lot of time thinking about how you create prosperity and jobs in the future — for our kids and our kids’ kids — in a future that’s going to look a lot different from reality today, [one] where hydrocarbons are less significant as a driver of economic growth in Canada.
That means thinking about how we build industries for the future. It means thinking about that in every province and territory, because everybody is different in their economic structure and in the opportunities that present themselves.
Way, way back, when I first finished graduate school, I was a federal-provincial negotiator for one of the provinces. And I am very cognizant of how different the regional economies are, and the need for us to work collaboratively.
