Canada’s New Just Transition Bill Can Support Green Jobs or Greenwash — It Can’t Do Both
Justin Trudeau’s Sustainable Jobs Act, hailed by unions, is a good step toward a just transition. But if the Liberals cave to Conservative opposition, it will be yet another party policy failure and will achieve nothing but greenwashing for the oil sector.
Canadian prime minister Justin Trudeau attends the UN Climate Ambition Summit on the sidelines of the 78th United Nations General Assembly at UN headquarters in New York City on September 20, 2023. (Bryan R. Smith / AFP via Getty Images)
Canada’s rebranded “Just Transition” legislation, now called the Sustainable Jobs Act, has passed a major legislative hurdle and will likely be passed in the new year. As has been the case with several of Liberal prime minister Justin Trudeau’s most ambitious-sounding climate policies, the bill’s limitations stem from attempts to find common ground with individuals whose financial interests hinder their willingness to support climate initiatives.
The stated purpose of the legislation is to assist workers in industries closely tied to fossil fuels, such as extraction, transportation, and manufacturing, secure high-paying jobs in a clean economy. This objective becomes increasingly urgent as the global consensus supports a transition away from, though not a complete phaseout of, dirty energy.
To achieve this goal, the act will create a government agency dedicated to facilitating the transition. An independent advisory body composed of workers, community leaders, indigenous peoples, and industry representatives most impacted by the energy transition will be established. Sustainable Jobs action plans will be developed at least every five years. Despite some critiques, labor unions overwhelmingly supported the legislation, arguing that it provides workers a permanent seat at the table.
However, Environmental Defence Canada (EDC) issued a caution when the bill was first unveiled in June, expressing concern that the legislation opens the door to major greenwashing from unscrupulous energy executives. These executives could very easily use the cover of sustainability and false promise of carbon capture technology to retain as many workers as possible working in the fossil fuel industry. “Lying to fossil fuel workers by making them believe they still have decades to go in the industry is cruel,” wrote EDC climate and energy program manager Alienor Rougeot.
For this reason, EDC was part of a coalition of six environmentalist groups that, in November, urged the government to establish “sufficient parameters . . . to mitigate the risk of creating jobs in sectors that are not compatible with Canada’s pathway to a net-zero economy.”
After examination in committee, which ended on December 11, a definition of “sustainable job” was finally added to the bill. A sustainable job, according to the text, is
any job that is compatible with Canada’s pathway to achieving a net-zero-emissions and climate-resilient future and that reflects the concept of decent work, namely work . . . that can support the worker and their family over time and that includes elements such as fair income, job security, social protection and social dialogue.
The problem lies in Canada’s approach to achieving net zero, as outlined by the Canadian Energy Regulator. Its fundamental flaw is approving carbon capture to meet targets while continuing to pump out fossil fuels well into the future. This same reliance on fantasy technology, which allows industry to have its cake and eat it too, similarly plagues the federal government’s mandate for net-zero electricity by 2035.
Obstructing Half Measures
The federal Liberals’ climate policies follow a familiar pattern: adopting half measures in an effort to reach a broad consensus with industry, only to face industry-supported demands from the Conservative opposition that policies be scrapped entirely. A case in point is the carbon tax, which, until recently, was the Liberals’ flagship climate policy. Carbon pricing, a market-based solution to a problem created by the market, has historically been posed as an alternative to imposing direct regulation on industry. Notably, Preston Manning, whose libertarian Reform Party merged with the old Progressive Conservative establishment Tories to create the modern federal Conservative Party, endorsed carbon pricing as recently as 2014.
Trudeau began imposing a meager carbon tax of CA$20 a ton in 2019, with an annual increase of $10 until it reached $50 in 2022. Provinces lacking their own equivalent carbon pricing regime would have the federal tax imposed on them. Starting in 2023, the tax began rising $15 annually, aiming to reach $170 a ton by 2030. Sensing a wedge issue, conservative parties across the country have campaigned vociferously against the tax.
In 2019, Ontario premier Doug Ford, Saskatchewan premier Scott Moe and then Alberta premier Jason Kenney challenged the imposition of the tax at the Supreme Court of Canada, arguing the federal government didn’t have jurisdiction to impose a tax impacting natural resource production. They were defeated, with the top court upholding Trudeau’s policy in 2021.
Federal Conservative leader Pierre Poilievre, however, promises to “axe the tax” if he’s elected in the next federal election, which is expected in 2025. Trudeau assisted Poilievre in this goal in October, when the prime minister, for nakedly electoral purposes, implemented an exemption to the tax for homes heated by oil — which is common in Atlantic Canada — thereby whittling away at his own climate policy.
The Conservatives’ blind obstructionism to watered-down climate policy repeated itself with the Sustainable Jobs Act. Progress on the act was delayed for a month in the Standing Committee on Natural Resources due to filibustering from the Conservatives, who demanded the committee first study a far more complex piece of legislation regulating offshore wind projects in Atlantic Canada.
Natasha Bulowski, a reporter at the online news site Canada’s National Observer, described the first two days of hearings as being “plagued with seemingly endless points of order, crosstalk and many monologues by Conservative MPs.” The Conservatives have also promised to introduce more than twenty thousand amendments to the bill, the logistical possibility of which beggars the imagination.
Capping Emissions . . . If the Liberals Are Reelected
Another key piece of climate policy recently unveiled by the Liberals is a proposed emissions cap for the oil and gas industry. The full details of that plan, which would make Canada the first country in the world to cap emissions from its most polluting sector, have yet to be determined, but the government’s first proposal has already gutted it of any meaningful ambition.
The Liberals’ own emissions reduction plan for 2030, released last year, outlined a plan to cap emissions from oil and gas at 42 percent below 2019 levels, reducing it further each year to reach net zero by the end of the decade. This was still a far cry from the 60 percent target recommended by the International Energy Agency, but by the time Environment Minister Steven Guilbeault and Energy Minister Jonathan Wilkinson announced the government’s framework, the gap between the Canadian policy and international consensus had grown.
When the Liberals unveiled their emissions cap framework in early December, the cap’s threshold was reduced to a mere 35 to 38 percent cut from 2019 levels. With a convoluted cap-and-trade system, where producers who exceed the cap can purchase carbon credits from those who haven’t, producers are, in practice, expected to reduce emissions by only around 20 and 23 percent, buying them time to increase production.
Despite the Liberals giving the oil and gas industry a free ride — compared to the 40 to 45 percent reduction below 2005 levels by 2030 expected of every other sector — the oil and gas industry went ballistic.
Bob Geddes, the president of Ensign Energy Services called the plan the “single-biggest existential threat” to the energy industry. The president of the Pathways Alliance, a coalition of the six biggest oil companies, whose net-zero plans hinge almost entirely on a massive government-subsidized carbon capture facility, said a cap eliminates the “certainty necessary” for its plan to work. One could make a far stronger case that carbon capture removes the certainty necessary to reach net zero by 2050.
Poilievre’s Conservatives predictably called the cap “another attack” on Canada’s energy industry, while Alberta premier Danielle Smith said it puts the “financial well-being of millions of Albertans and Canadians” at risk.
Marc-André Viau, director of government relations at Équiterre, the environmentalist outfit where Environment Minister Guilbeault cut his teeth as an activist before entering electoral politics, characterized these unhinged response as entirely predictable:
Oil companies are always ready to dip into the candy jar and take taxpayers’ money to protect their shareholders’ profits, while pushing unproven, ultra-expensive technologies like carbon capture and storage in the name of ‘decarbonization’, but when it’s time to live up to their responsibility, they hide under the skirts of a few politicians who are inclined to put the interests of industry ahead of those of the public . . .
The cap, which will only be further diluted as it makes its way through Parliament, will only go into effect in 2026, meaning the Liberals will have to win an election first. In announcing the cap, Guilbeault explicitly warned that if Poilievre wins the next election, the Liberals’ entire edifice of climate policy will come crashing down. For this reason, many oil and gas executives are hoping for a Conservative victory so they’ll never have to comply with Liberal energy policies.
While the Liberals’ climate plans have their flaws, they represent an incremental step in the right direction. However, considering the urgency of the climate crisis, there is no time for Trudeau and Guilbeault’s endless compromises and political games.