The announcement of new financial aid for medium and large companies, by federal Finance Minister Bill Morneau and Industry Minister Navdeep Bains, reflects just how much of a threat the COVID-19 pandemic is to the health of the economy.
“Employers, large and small, are facing challenges due to the COVID-19 global pandemic. Our government has their backs,” said Morneau in a statement.
“We know that many businesses of all sizes need our help in order to keep their many employees on the payroll and their suppliers paid until the economy recovers. That is why today’s measures will help both large and mid-sized employers to get access to the financing they need to make it through this extraordinarily challenging time.”
Ottawa is establishing a Large Employer Emergency Financing Facility (LEEFF) which will provide bridge financing to the country largest employers.
The financing will be available to every sector and for companies with annual revenues of $300 million or higher.
Oil and gas companies will be able to take advantage of the bridge financing, but Prime Minister Justin Trudeau noted in his daily address that the financing was contingent on them making commitments to become net zero by 2050.
“We’re expecting them to put forward a frame that which they will demonstrate their commitment to reducing emissions,” Trudeau told reporters.
It’s not all that surprising the Trudeau government would attempt to tie financing for companies hard hit by the lockdown to emissions controls, considering the prime minister keeps renewing his pledge to meet emission targets and is facing opposition within the Liberal Party to any bailout of oil and gas companies.
Then, too, there is the shrill voice of Green Party Leader Elizabeth May calling for the government to use this pandemic as an opportunity to move on from oil and gas.
Therein lies the rub, of course.
On one hand, this pandemic has decimated the economy. Millions of workers are unemployed, companies are going bankrupt, tax revenues are down and the deficit has ballooned by hundreds of billions of dollars.
On the other hand, Canada is far off track in meeting its Paris Climate Agreement goals and, consequently, the goal of net zero emissions by 2050 looks increasingly like a pipe dream.
As it stands, the country is committed to cutting CO2 emissions by 30 per cent below 2005 levels by 2030. This is the country’s so-called Nationally Determined Contribution.
To meet this goal, the Trudeau government devised a framework in 2016 that included a carbon tax, a set of new policies and regulations designed to reduce emissions across all sectors, a phase out of coal, fuel standards, efficiency measures for buildings and transportation as well as regulations to reduce emissions from the oil and gas sector.
In April of 2019, however, Ottawa released its latest report and it showed emissions had actually risen by 12 million tonnes since its previous report in 2018.
In other words, Ottawa must figure out how to cut an additional 12 MtCO2 in the coming years and it now has one less year in which to do it.
Why the big increase?
Here’s the controversial part.
The increase was caused by a surge in emissions from the oil and gas industry.
When that bit of news hit, then Environment Minister Catherine McKenna put on a brave face and said, “Canada’s climate plan is working, and the overall trend in emissions is downward toward 2030.”
Technically, she was right. Emissions have declined by two per cent. But at this rate, the country will not meet its targets – not by a long shot.
And how could the country meet its targets?
Well, May knows the answer to that one. We jettison the oil and gas sector.
The problem is that oil and gas industry already emits 50 million tonnes of CO2 more than the entire country’s 2050 climate target.
In other words, we are that point in our journey where, and please excuse the bad pun, the rubber hits the road.
We have some very hard decisions to make.
We can continue trying to meet the 2030 and 2050 goals and gut the oil and gas sector and accept hundreds of thousands of job losses and a huge decline in GDP or we can admit the goals are unattainable, unrealistic and, ultimately, pointless.
What’s required is a reality check.
That was happening all across the globe before the pandemic hit. No country will meet the 2030 goals. None will meet the 2050 goals.
Some countries such as China, India, Russia and the United States aren’t even trying. Even the countries who embraced the Paris goals such as Germany are building new coal fired power plants. China is adding dozens per week.
In the wake of the pandemic, it is doubtful any country is going to vigorously pursue emission reductions.
The pandemic, after all, has inflicted so much economic damage that the fallout from the lockdowns and disruption in supply chains will last a decade or more. Trillions of dollars in production has been lost, millions have lost jobs, trillions of dollars have been spent on keeping people alive.
Once this pandemic is over, countries will be focused on restoring their economies and paying down debts. This will take a decade. There will be no money to spend on projects that reduce economic growth. Decarbonization will be abandoned.
If you think this will not be the case, just look around at the unrest the lockdowns have caused and multiply that frustration a thousand fold as people come to understand decarbonization essentially means what passes for life today will be life going forward.
Does anyone but a true ecofanatic think that people will accept such a reduction in their standard of living?
Not bloody likely.
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