Canada is making long-term, multi-billion dollar, decisions about its energy future at a moment of global change. Geopolitical shocks, unstable supply, shifting demand, and changing investment patterns are reshaping the global energy system. This series looks at those forces, and what they mean for Canada’s economy and the choices now in front of it. 

The previous four installments explored the dynamics at play in the global energy economy and Canada’s placement within it. The facts that support the case for Canada to bet on the energy transition do not guarantee any particular outcome. What will determine whether Canada capitalizes on its structural advantages is public policy. While policy responds to markets, it also helps build them. 

Canada’s fossil fuel industry and its political allies are making a bet that they can use public investment to lock in another generation of oil and gas infrastructure before the window closes. Based on the evidence assembled across this series, that bet is wrong. Doing so will drive investments in the wrong direction, tying the trajectory of the Canadian economy to a fossil fuel market on increasingly shaky ground and squandering Canada’s potential in the transition economy. 

Policy as the market-maker

Markets do not emerge strictly from nature. Canada’s fossil fuel sector — an industry that has rallied for subsidies and against policy intervention on climate — is itself a creature of public policy. It has been supported by access to Crown land and resource tenure rights, help in accessing foreign markets, coordination of infrastructure integration regarding transport, ports, and electricity systems and with $85.2 billion in subsidies since 2020. Government has supported fossil fuel expansion from cradle to sale, facilitating construction and development, de-risking and even bailing out projects like the $34 billion Trans Mountain Expansion Project. 

That same playbook is being applied to the next generation of fossil fuel infrastructure. The Canada-Alberta MOU committed to federal backing for a new oilsands export pipeline contingent on a carbon capture project by the Oilsands Alliance. The Alliance has quietly slashed its climate goals — reducing its targeted carbon capture by 77 per cent, from 68 megatonnes per year to 17 while asking taxpayers to foot the bill. Meanwhile, the federal government has committed........

© National Observer