Ottawa bet against fossil fuels and lost

Its anti-oil and gas obsession sacrificed Canada’s economic growth for zero environmental gain

“There will come a day, far off but inevitable at some point, when traditional energy sources will no longer be needed,” said former prime minister Justin Trudeau in 2017.

Politicians across the Western Hemisphere, including Canada’s leadership for at least the past decade or more, have bought into the notion that a massive transition away from fossil fuels is underway, and the end of their use is somehow preordained.

In fact, since the Chrétien government signed on to the Kyoto Protocol, a significant portion of Canada’s political class has insisted that fossil fuels are a relic of the past.

But a new study from the Fraser Institute says that argument never really held water. The main finding in the report is that fossil fuels accounted for 76.3 per cent of Canada’s domestic energy consumption in 2024. Compare that to 76.8 per cent in 1995.

In other words, over the course of nearly 20 years, including a decade under the Trudeau government that pursued climate transition policies like a consumer carbon tax and spent hundreds of billions of dollars on so-called clean energy initiatives, the needle barely moved. Canada is just as reliant on fossil fuels today as the country was prior to signing on to the Kyoto Protocol.

Canada’s largest energy-consuming sectors remain heavily reliant on fossil fuels, with nearly 75 per cent of industrial energy use and over half of residential energy use still tied to those traditional energy sources.

And yet for decades, Canada sacrificed economic growth, all for the sake of climate goals.

Not only did Trudeau try to hold down domestic fossil fuel consumption, but he also claimed that there was “no business case” for exporting Canadian natural gas to countries like Germany and Japan in an effort to block the development of the domestic energy sector for export purposes.

Prime Minister Mark Carney seems to recognize that the Trudeau government’s climate policies were a failure.

“The climate plan we inherited from the previous government was well-intentioned…but as times have changed we must change our plan,” said Carney earlier this summer.

“We can’t afford to restrain the growth of an important part of our energy mix—oil and gas—to meet a short-term goal,” Carney added.

The Carney government has also recently signed agreements with other countries to export Canadian natural gas abroad, a massive departure from Trudeau’s “no business case” approach.

Of course, there always was a business case for exporting more Canadian oil and natural gas abroad.

India and China, for example, continue to build coal plants at a breakneck pace. If Canada’s political class genuinely wants to see global emissions go down, there is a clear case for producing and exporting more Canadian oil and natural gas, both of which have less of a negative impact on the environment than coal.

There is both an environmental and economic case for building more pipelines and increasing Canada’s capacity to produce energy, both to meet the needs of domestic consumers and to meet the needs of countries that would otherwise have to turn to dirtier forms of energy.

Although Carney remains an improvement from Trudeau, his approach to unleashing Canadian energy is far from perfect. He continues to insist on tying any future pipeline development to expensive initiatives like carbon capture and storage (CCS) and talks constantly about the need to “decarbonize” Canada’s energy sector.

As other countries, like the United States, unleash their energy sectors, the Carney government seems to still want to have Canada’s energy sector operate with one hand tied behind its back. While superior to the Trudeau approach of trying to stymie the growth of the sector completely, the Carney approach to energy could still use some improvement.

For the sake of Canada’s economy, the diversification of our trade, and even for getting global emissions down, it’s time for the federal government to embrace the full-throated development of Canada’s oil and gas sector.

Dr. Jay Goldberg is a political scientist, a fellow with the Frontier Centre for Public Policy, and a columnist whose work is syndicated in the Toronto Sun and Winnipeg Sun. His policy analysis focuses on fiscal, trade, and energy issues.