OP-ED: Carney’s energy mirage- Why the prospects of economic recovery remain bleak

Gwyn Morgan writes, "Despite the lovey-dovey atmosphere at Carney’s recent meeting with Canada’s premiers, Canadians should not be fooled."

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By Gwyn Morgan

Pete Townshend’s famous lyrics, “Meet the new boss / Same as the old boss,” aptly describe Canada’s new prime minister. Touted as a fresh start after the Justin Trudeau years, Mark Carney has promised to turn Canada into a “clean and conventional energy superpower.” But despite the lovey-dovey atmosphere at Carney’s recent meeting with Canada’s premiers, Canadians should not be fooled. His sudden apparent openness to new energy pipelines masks a deeper continuity, in my opinion: Carney remains just as ideologically committed to net-zero emissions.

Carney’s carefully choreographed scrapping of the consumer carbon tax before April’s election helped reduce gasoline prices and burnished his centrist image. In fact, he simply moved Canada’s carbon taxes “upstream”, onto manufacturers and producers, where they can’t be seen by voters. Those taxes will, of course, be largely passed back onto consumers in the form of higher prices for virtually everything. Many consumers will blame “greedy” businesses rather than the real villain, even as more and more Canadian companies and projects are rendered uncompetitive, leading to further reductions in capital investment, closing of beleaguered factories and facilities, and lost jobs.

This sleight-of-hand is hardly surprising. Carney spent years abroad in a career combining finance and eco-zealotry, co-founding the Glasgow Financial Alliance for Net Zero (GFANZ) and serving as the UN’s Special Envoy for Climate Action and Finance. Both roles centred on pressuring institutions to stop investing in carbon-intensive industries – foremost among them oil and natural gas. Now, he speaks vaguely of boosting energy production while pledging to maintain Trudeau’s oil and natural gas emissions cap – a contradiction that renders new pipeline capacity moot.

Canada doesn’t need a rhetorical energy superpower. It needs real growth. Our economy has just endured a lost decade of sluggish overall growth sustained mainly by a surging population, declining per-capita GDP and a doubling of the national debt. A genuine recovery requires the kind of private-sector capital investment and energy infrastructure that Trudeau suppressed. That means lifting the emissions cap, clearing regulatory bottlenecks and building pipelines that connect our resources to global markets.

We can’t afford not to do this. The oil and natural gas industry’s “extraction” activities contribute $70 billion annually to Canada’s GDP; surrounding value-added activities add tens of billions more. The industry generates $35 billion in annual royalties and supports 900,000 direct and indirect jobs. Oil and natural gas also form the backbone of Canada’s export economy, representing nearly $140 billion per year, or about 20 per cent of our balance of trade.

Yet Quebec still imports oil from Algeria, Saudi Arabia and Nigeria because Ottawa won’t push for a pipeline connecting western Canada’s producing fields to Quebec and the Maritimes. Reviving the cancelled Energy East pipeline would overcome this absurdity and give Canadian crude access to European consuming markets.

Carney has hinted at supporting such a project but refuses to address the elephant in the room: without scrapping the emissions cap, there won’t be enough production growth to justify new infrastructure. So pipeline CEOs shouldn’t start ordering steel pipe or lining up construction crews just yet.

I continue to believe that Carney remains beholden to the same global green orthodoxy that inspired Trudeau’s decade of economic sabotage. While the United States shifts course on climate policy, pulling out of the Paris Accord, abandoning EV mandates and even investigating GFANZ itself, Canada is led by a man at the centre of those systems. Carney’s internationalist career and personal life – complete with multiple citizenships and a spouse known for environmental activism – underscore how far removed he is from ordinary Canadians.

Carney’s version of “clean energy” also reveals his bias. Despite the fact that 82 per cent of Canada’s electricity already comes from non-greenhouse-gas-emitting sources like hydro and nuclear, Carney seems fixated on wind and solar-generated power. These options are less reliable and more expensive – though more ideologically fashionable. To climate zealots, not all zero-emission energy is created equal.

Even now, after all the damage that’s been done, Canada has the potential to resume a path to prosperity. We are blessed with vast natural resources and skilled workers. But no economy can thrive under perpetual policy uncertainty, regulatory obstruction and ideological hostility to its core industries. Energy projects worth an estimated $500 billion were blocked during the Trudeau years. That capital won’t return unless there is clarity and confidence in the government’s direction.

Some optimists argue that Carney is ultimately a political opportunist who may shift pragmatically to boost the economy. But those of us who have seen this movie before are sceptical. During my time as a CEO in the oil and natural gas sector, I witnessed Justin’s father Pierre Trudeau try to dismantle our industry under the guise of progress. Carney, despite or perhaps because of his polish, may be the most dangerous of the three.

The original, full-length version of this article was recently published in C2C Journal.

Gwyn Morgan is a retired business leader who was a director of five global corporations.