Radwanski: Canada Cautious on Green Stimulus

With governments elsewhere unveiling ambitious green stimulus plans in response to the economic crash brought on by the COVID-19 pandemic, Canada has been unaccountably cautious to join the club, Globe and Mail columnist Adam Radwanski writes in a post published earlier this week.

With everyone from UN Secretary General António Guterres to the International Monetary Fund to the International Energy Agency to hundreds of companies, regional governments, and major cities calling for prompt action, and countries from the European Union to South Korea responding, Ottawa is still famously mulling its options.

“A government that entered the pandemic with clean economy transition at the heart of its mandate is unusually reticent about how it will capitalize on the biggest economic disruption since the Great Depression to advance that agenda,” Radwanski writes. “Four months after the economy was shut down by COVID-19, the official line out of Ottawa is that it’s still too early to move beyond the immediate emergency and address what it could look like on the other side.”

The contrast was clear one day last week, he adds, when a fiscal update from Britain’s Chancellor of the Exchequer, the Conservative Party’s Rishi Sunak, featured a building decarbonization worth more than $5 billion. Hours later, “Canadian Finance Minister Bill Morneau presented his version of the same thing in the form of a ‘fiscal snapshot’—and declined to give Canadians much sense of his government’s long-term recovery plans, green or otherwise.”

That reluctance “seems bizarre from the Liberals during a hugely pivotal moment in the climate change fight, in which governments have their last best chance to spend big on meeting emissions reduction targets before a likely period of austerity kicks in,” Radwanski writes. “But it has something to do with internal cabinet politics,” with the government initially tipping a green recovery initiative led by three ministers with climate policy background—Environment Minister Jonathan Wilkinson, Infrastructure Minister Catherine McKenna, and Heritage Minister Steven Guilbeault—then subtly shifting the tone to talk more dismissively about that effort.

“Based on recent conversations with members of the government and environmental groups that have been engaging with it, granted anonymity so they could speak freely without fear of reprisal, there is a difference of opinion within cabinet about how much of a climate-focused recovery plan there should be,” Radwanski explains. Deputy Prime Minister Chrystia Freeland—chair of the cabinet’s COVID-19 committee, and the government’s lead liaison to Alberta—is seen as a “key figure in that dynamic”. She’s apparently “less convinced than many other Liberals that climate ambition was a decisive factor in their re-election to government last year.”

And while Freeland is “apparently lukewarm” about green recovery spending, he says Morneau’s officials have been “pouring cold water” on notions of any kind of stimulus. “Finance officials have continued to suggest, within government and to those outside it, that the economy may sufficiently rebound on its own once pandemic-related restrictions are finally lifted,” Radwanski writes. “And to the extent that stimulus is needed, they’ve been arguing against locking into anything yet, given this recession’s highly unusual and unpredictable nature.”

Those constraints haven’t stopped other governments from at least putting up trial balloons for green recovery measures—or an array of outside organizations, most recently Corporate Knights and the Task Force for a Resilient Recovery, from sending their ideas on to Ottawa. But Radwanski says the present dynamic raises the risk of the government “latching onto others’ ideas at the last minute, without fully thinking them through,” and passes up the opportunity to “engage Canadians in deciding what kind of economy they want coming out of this”.

Which is odd, given that Prime Minister Justin Trudeau “once promised to be a world leader in confronting the existential challenge that will be with us long past the current health crisis. There is still time for him to make good on the best opportunity he will ever have on that front, but so far he’s acting like a follower at best.”