Recent furor over whether American tariffs on steel and aluminum imports would apply to Canadian products illustrated perfectly the vulnerability of some segments of the economy to wild fluctuations in international trade.
But as steel and aluminum producers contend with the daily challenges of doing business in a highly competitive and often-uncertain international marketplace, the Canadian government has put another challenge on their plates — how to pitch in on the fight against climate change.
Canada needs these industries on board, yet, at the same time, they’re fighting for their very survival.
That’s why the Senate Committee on Energy, the Environment and Natural Resources is studying how Canada can deliver on its greenhouse gas reduction targets and how much it might impact Canadian businesses and individuals to do it.
The committee is preparing its third of five reports on the subject. It is looking at five sectors of the economy that are responsible for most of Canada’s greenhouse gas emissions. Those sectors are electricity, transportation, oil and gas, buildings and businesses like steel and aluminum producers that compete with international firms both home and abroad. Industries like steel and aluminum are big energy consumers and large greenhouse gas emitters because of their manufacturing processes.
As part of the study, committee members embarked on fact-finding missions in 2016 to Rio Tinto’s aluminum smelter in Kitimat, B.C., and the ArcelorMittal Dofasco plant in Hamilton, Ont. Those businesses have already implemented measures to reduce their emissions and improve energy efficiency. But they will likely be asked to do more.
The committee’s final report will include recommendations to the federal government about how this crucial transition to a low-carbon economy can best be managed — meeting Canada’s climate change commitment with minimal impact on Canadians.
There’s no longer any question that countries around the world need to show leadership and collaborate to counter the effects of climate change. As a signatory to the 2015 United Nations Agreement on Climate Change, often referred to as the Paris Accord, Canada is committed to bringing this country’s greenhouse gas emissions to 30% below 2005 levels by 2030.
Meeting this commitment is going to cause some economic pain all around. For example, some provinces still burn coal to produce electricity, which, of course, results in the release of greenhouse gases, such as carbon dioxide. Any shift to cleaner sources of electricity by energy producers will almost inevitably result in increased electricity costs to consumers.
Failure to act, however, could lead to rising sea levels, increasingly frequent extreme weather events, the extinction of endangered species and refugee crises as people are forced to migrate when their homelands become inhospitable to human habitation.
As Canada makes this low carbon transition, we need to do it in a way we can afford. What’s happening to Canada’s steel and aluminum producers on the tariff front is a reminder of how delicate a balance we need to strike. We need to find ways to incent industries to reduce their greenhouse gas emissions but in a manner that preserves their international competiveness.
This is why this Senate committee is studying Canada’s transition to a low-carbon economy — to help strike the right balance.
Senator Rosa Galvez is chair of the Senate Committee on Energy, the Environment and Natural Resources. She represents the Bedford division of Quebec. Senator Michael L. MacDonald is the committee’s deputy chair. He represents the Cape Breton division of Nova Scotia.
This article appeared in the Monday, March 19, 2018 edition of The Hill Times.