ourEconomy

Canada’s economic growth is actually a cause for concern

Forget the praise, Canada’s booming fossil fuel sector threatens human civilization.

Shreya Kalra
5 August 2019
Extinction Rebellion rally at the Zenith Energy facility in Portland, Oregon, Alex Milan Tracy/SIPA USA/PA Images

When the Canadian economy surpassed expectations for April 2019 by growing 0.3%, it was met with both concern and celebration.

Media reports applauded the first quarter figures. Bloomberg reported: “Canada recorded a second strong month of growth in April, driven by rebounding oil output that is returning the nation’s economy to a more solid footing.”

While CBC quoted TD senior economist Brian DePatto, who in a letter to his clients wrote: "Thank goodness for energy. Without the surge of activity in that sector, driven by the easing of production restrictions, this would have been a much more modest report."

Yet this positive narrative veils the bleaker reality of an economy dependent on oil, mining, and gas sectors: the largest emitters of carbon dioxide.

Mining, quarrying, and oil and gas extraction increased by 4.5% in April, while oil sands extraction increased by 11%.

According to Statistics Canada’s 2018 annual review, Canadian production of crude oil increased by 8.5% from 2017 to 2018. Similarly, the production of “marketable natural gas” increased by 3.9% in that same period.

Canadian oil exports to the United States also significantly contributed to the growth figures. Statistics Canada reveals that “Canada exported 211.9 million cubic meters of crude oil and equivalent products in 2018 [up by 10% from 2017], which represented 80.1% of total production. Exports via pipelines to the United States [up by 5.3% from 2017] was the primary contributor to the overall increase.”

This economic growth piggybacking on the extraction of crude oil, oil sands, mining and gas contradicts Canada’s effort to peg itself as a global leader in combating climate change.

Dale Marshall, National Program Manager at Environmental Defence and lead writer of the 2018 report ‘Canada’s Oil and Gas Challenge’, believes the international community sees the reality behind Canada’s growth: “over the last few years, Canada’s shine has come off the global diplomacy scale. Canada’s oil is some of the dirtiest in the world and has gradually become dirtier.”

In terms of achieving a sustainable transition, Marshall maintains that export revenue is “more difficult to replace.” Yet if a just transition strategy is mapped out now, keeping in mind the needs of workers and communities involved in the fossil fuel industry, “short-term shocks can be avoided.”

The irony behind Canada’s promise to actively curb the climate crisis and its actual actions cannot be missed. At the time of his election in 2015, Justin Trudeau took a strong stand against feeble goals to address the climate crisis. However when the Liberal government came to power, it eventually subscribed to a 30% reduction in greenhouse gas emissions by 2030 – the same goal as the previous Conservative government under the leadership of Stephen Harper.

In an email exchange, the official spokesperson for Environment and Climate Change Canada, Samantha Bayard, wrote: “Canada is putting in place policies right now that will show significant impact in the coming years, policies such as reducing methane emissions from the oil and gas industry by up to 45% below 2012 levels by 2025, investing in public transit projects across the country, providing consumer rebates for electric vehicles with a goal that by 2030, 30% of all new vehicles sold in Canada will be zero-emission (and 100% by 2040).”

Yet in order to meet its 2030 goals under the Paris Agreement, Canada needs to cut its current emissions targets in half. According to Marshall, this means a 37% reduction in Canadian oil production and a 25% decline in gas production.

If Canada wants to present itself as a leader in renewable energy, Trudeau needs to realise that tackling the climate crisis requires terminating fossil fuel production.

In fact, alternative and sustainable forms of energy are increasingly viable, as the recent expansion within this sector suggests.

According to Clean Energy Canada’s 2019 report, ‘Missing the Bigger Picture’, Canada’s clean energy sector expanded 4.8% annually from 2010 to 2017. While in 2017 alone, the clean energy sector created 298,000 jobs.

Climate change is the greatest existential threat of our time. Fossil fuel production at its current rate runs the risk of economic, social and political chaos. Therefore, the Canadian government must abandon fossil fuel production in the name of economic growth, and pursue a truly green and sustainable future.

Canada is due for a general election on October 21st. The electorate has a duty to pressure government leaders and demand policy changes to not just slow fossil fuel production, but halt it altogether.

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