The decision by Vancouver-based Teck Resources, announced on Sunday, to withdraw its application for the Frontier oil sands mine was both unexpected and foreseeable.
Unexpected because the decision about whether or not the project would move forward had been framed solely as a federal government judgment, rather than being determined by a combination of corporate, state and Indigenous interests.
Foreseeable because even if the mine was approved it was unlikely to ever be built. To be profitable, the project would require oil prices to remain higher over the long term than they are likely to in the context of global climate action. The 7,000 jobs and $20 billion of investment associated with the project were a false promise.
The decision has been spun both as a victory for climate activism and Indigenous resistance and as an indictment of anti-Alberta, anti-investment leadership. But what most commentators seem to agree on is that Teck’s decision is a turning point for Canada.
That may be oversimplifying a complex political and economic situation, but there is no doubt the Teck decision is an important moment for reflection. How can we make the most of it? Here are four key takeaways from the demise of the Frontier mine.
We need to recommit to Indigenous reconciliation
Teck claimed to have “unprecedented support from Indigenous communities” for the Frontier project. Yet many Indigenous activists and downstream communities celebrated its withdrawal. The ongoing dispute over the Coastal Gaslink pipeline through Wet’suwet’en territory—including divisions within and between Indigenous communities—similarly highlights the complicated politics of developing resources on Indigenous land.
Nevertheless, it is clear that the Canadian government’s ongoing support for fossil fuel extraction is undermining the government’s stated commitment to reconciliation. Moving forward with the recommendations of the Truth and Reconciliation Commission, including implementation of the United Nations Declaration on the Rights of Indigenous Peoples, will require deeper respect for Indigenous legal rights but also a more fundamental shift in our relationship to nature—from one of exploitation to one of harmony.
We need clearer, stronger climate policy
One of the main justifications Teck did provide for pulling its application was Canada’s uncertain climate policy environment. The company was unwilling to proceed with the project without “a framework in place that reconciles resource development and climate change.” For Teck, that framework includes “carbon pricing and other climate policies such as legislated caps for oil sands emissions,” which are policies Alberta’s government has recently scaled back and/or called into question.
To truly decarbonize the Canadian economy we need more ambitious policies than carbon pricing and emissions caps anyway—a new oil sands project like the Frontier mine should be a non-starter—but the private sector is right to expect more clarity in this area. The ongoing resistance from conservative politicians to any kind of climate policy—most notably the quixotic legal challenges to carbon pricing—is not only disastrous for our planet, but increasingly out of step with corporations and investors.
We need to recognize global market trends
Global markets are changing and the writing is on the wall for fossil fuel producers. More than US$11 trillion has been pledged to fossil fuel divestment globally. While that figure is still too small given the scale of investment in coal, oil and natural gas around the world, climate concerns are playing an increasingly central role in investment decisions.
BlackRock, the largest money management firm in the world, recently called for a “fundamental reshaping of finance” that includes a “significant reallocation of capital” away from unsustainable industries.
Closer to home, the Calgary Chamber of Commerce responded to the Teck decision by calling for “real, decisive action on climate change, with tangible outcomes and conviction” while calling out “rhetoric by political leaders” as an obstacle.
Decarbonizing the Canadian economy is a collective problem that ultimately requires government leadership. In its absence, major decisions about the transition to a lower-carbon economy will be made by the private sector.
We need a just transition to a cleaner economy
The case for government management of the transition to a cleaner economy is especially pertinent in the social context. When private investors pull out of fossil fuel projects it may be a win for the land and the climate, but the burden often falls disproportionately on fossil fuel workers, their families and their communities.
The federal and provincial governments have key roles to play in:
- establishing clear timelines and plans for the phase-out of fossil fuel production (as they did with coal power), instead of leaving it to the whims of the market;
- supporting displaced workers with social security, retraining and career support; and,
- investing in new industries that create good, green jobs in the communities where they are needed most.
It is becoming increasingly clear that the transition to a lower-carbon economy is coming, regardless of the protestations of regressive Canadian politicians. As the CCPA has long argued, a just transition to a cleaner economy is an opportunity to minimize the harm and maximize the benefits to workers of the shift away from fossil fuels.
Indeed, the Teck Frontier mine decision presents a unique opportunity for Canadian public policy to align both with global market pressure and the imperatives of climate policy, all the while engaging in the process of Indigenous reconciliation. Governments would be wise to seize the opportunity.
Hadrian Mertins-Kirkwood is a senior researcher on international trade and climate policy for the Canadian Centre for Policy Alternatives. Follow Hadrian on Twitter: @hadrianmk.