Mark Carney’s Political Tightrope

In addition to being a former candidate in our area, Jennifer Lash is a former senior advisor to Canada’s Minister of Environment with a lot of insight into what motivates the Liberal government. 

So Cortes Currents recently asked her,  “Tell us a little bit about the tightrope that Mark Carney’s been walking with separatism rising in Alberta and Quebec; environmentalists saying that we should be adapting faster; the rising cost of living, needs for more housing, more jobs; Trump’s economic tantrums, the need to just diversify Canada’s economy and the threat of recession.”

 Jennifer Lash responded that it is a complex situation. She explained a concept she calls the Prime Minister’s Hierarchy of Needs, borrowing from Maslow’s Hierarchy of Needs. These are the elements the Prime Minister must manage to maintain credibility and a mandate to govern. They are all interlinked.

“One is economic stability. We saw this under Trudeau. His support dropped for many reasons, but one was people just felt like the economy was sluggish. It wasn’t meeting their needs. Inflation, the price of groceries, everything was out of control. So he was not credible at all on that issue.”

“The second is security. So that would be both international security and domestic security. I should feel safe in my home. I should feel safe in my community, and I should feel that, my country is safe.”

“Then the third one is National Unity. No Prime Minister wants to be the Prime Minister when a province leaves the country. One of the biggest indications of failure as a Prime Minister is if a province leaves.”

“These things are tied together. If the provinces aren’t working together, you’re not going to have a mandate, you’re not going to have as much economic security because you’re not going to be able to implement as many programs. It’s going to affect national security as well.”

“These are all connected, but national unity is one of the key issues that raises its head over and over again in Canada, in part because of Quebec. I don’t think I have to go any deeper with your listeners on the history of Quebec and the separatist movement, but it’s been going on for a long time.”

“Now of course we see the rise of a separatist movement in Alberta. There’s always been a tension between Alberta and Ottawa. A lot of that really came to peak during the late sixties, early seventies under Trudeau, the Elder and then reinforced by Justin Trudeau when he was in there. It’s a real problem in terms of trying to get federal programs implemented when the provinces don’t agree. It’s politically a challenge in terms of showing your ability to govern and maintain unity within the country. It’s also a policy challenge because a lot of federal policies need to partner with provinces in order to be implemented effectively.”

“This is filling the airwaves a lot right now because there’s a Quebec election this year. The Parti Québécois which is the separatist party, is leading in the polls, but in the last poll, I read only 35% of Quebecers would vote in favour of separation.”

“When you look at Alberta, it’s a really big deal right now because they are running the petition and if they get 177,000 signatures, I think it is enough for the premier to then say, okay, we’ll do a referendum. Right now only 19% of Albertans are supporting separation.”

“So it’s not like you’re seeing the call for separation from a majority of the people in either province, but politically it is rearing its head and it is causing a real attention in the country.”

“That’s further exacerbated by the United States, taunting Alberta by saying, ‘oh, it’s a natural partner with us and some people from some of the separatist groups in Alberta have gone down to the United States and met with them. Some are saying they’re going to ask for a $500 billion loan guarantee to help them with separation. So there seems to be this pull within the Alberta Separatist movement to align more closely with the United States, which of course goes against Canada’s work to unify in order to deal with Trump and everything he’s doing to our country.”

“That’s the backdrop, but if you look at the meeting this week between the premiers and the Prime Minister, what you actually saw was the leadership all across the country – which are mostly Conservative and NDP premiers, there’s one Liberal – meeting with the Prime Minister in what appeared to be a very collaborative, very united front. It’s a real contrast between how we’re seeing our elected officials across the country work together, even though they’re disagreeing. So they’re agreeing to disagree and try and find where they do agree and advance the country in the face of the attacks that we’re seeing from Trump.”

“So that’s trying to advance the country in terms of major projects, in terms of cross border interprovincial trade barriers. Then trying to develop trade agreements with other countries, not with the United States and also being able to try and negotiate or review the Cosma agreement (Canada-United States-Mexico-Agreement) with the United States.”

“So we’re seeing our leaderships really united, and then we’re seeing this public narrative about separation, which I find quite fascinating purely from an armchair political analyst perspective. Right now, from the things I’ve been reading, my sense is that neither referendum, if they were to be held because they haven’t met their hurdles that they need to meet in order for that to happen, I am confident at this moment in time that neither province would leave Canada.”

“I just don’t think particularly in the face of Trump, there is a desire to do that, but I think what we have to be very cognizant of is it’s also for many a negotiating tool.”

“In Alberta specifically, it’s a negotiating tool to walk back climate action. They feel like climate policies are really hurting the oil and gas sector, which of course is their main source of revenue. That’s a real problem. They want to be able to expand not unregulated, but with far less regulations that they have now and that really gets in the way of Canada meeting any climate targets at all. They’re fighting against things like clean electricity regulations, things like that are a real problem.”

“So how does the Prime Minister navigate this space? Well, that’s why you saw things like the MOU where he’s trying to figure out where there is common ground, where we can take the friction out of the conversation between BC and Alberta and start to talk about finding solutions.”

“I’m not privy to those conversations, although I would’ve loved to have been a fly on the wall in Ottawa at some of those meetings this week, but I have great faith in the Prime Minister and his ability to focus on what the problem is and what the potential solutions are, and not let the politics and the public fighting get in the way.”

“He really does not air his dirty laundry in public. He does not do performative politics. He’s not going to talk about something before we get to a place where he understands how to navigate that. And so I am confident that through his leadership with the premiers, we’re going to be able to find a way through that allows him to find that balance, to find a way to address the concerns of Alberta.”

“I will speak less about Quebec. I’m not a Quebec expert and I know there’s some issues very specific to that province and I don’t want to pretend that I understand those. I’m not too sure what the Prime Minister is doing in Quebec, but I’m sure he will find ways to try to work with the leaders to solve the problems and keep the country united.”

Cortes Currents: We also have a people worried about the cost of living. We’ve got the threat of recession. A new study just came out of Germany, which predicts that we’re going to be hitting three point zero by 2050. We’ve got all these poles in different directions.

Jennifer Lash: “So let’s take these one by one.”

“The Prime Minister’s goal around the economy is two-pronged. So the first is lay the foundation for a solid economy going forward. That’s where he’s doing trade agreements with other countries, diversifying where our trade goes and really trying to lessen our dependence on the United States. Then he’s also looking at major projects that need approval, and those help develop the economy. In doing both of these, he’s creating certainty for major investments within the country, which really helps with the economy when we see start to see more foreign investment in Canada.”

“I know there’s a lot of issues with where that foreign investment comes from, but definitely trying to get that foreign investment is really great. That’s something that we did not see under the previous Liberal Prime Minister, foreign investment went down. So he’s really trying to say to the rest of the world, we are back. We are a good place to invest in.

That will long-term build the economy but I’m the mother of two 25 year olds. That does not help my kids right now. My daughter, who’s working to find a job right now. My son’s still in university. They’re both paying rent. My son’s still in university. They have to buy expensive groceries that does not help them. That might help them 10 years from now, but it’s not helping them today.”

“So to help people today who need that support, he announced the increase to the goods and services rebate in order to provide more financial support to those who need it, but he also didn’t stop there. He also looked at food security. He looked at food bank support and he looked at ways to ensure small and medium businesses don’t have to pass on the costs of supply chains to consumers. So it was a full package. It wasn’t just a retail politics ‘i’m sending everyone a check,’ which a lot of leaders do. It was a little bit more of a comprehensive package. It goes over five years with increases to the GST rebate, and then it looks at food security and it looks at really trying to help the small, medium businesses as well.”

“So he’s trying to address the immediate economic concerns.”

“He’s trying to build that economy for the future and what that is rubbing up against is the environmental policies. There is a feeling in this country, that as a result of building this foundation for our economy, is that we’re going to have a lot more oil and gas, which is going to create a lot more emissions and not emissions from burning.”

“We have to remember that when we count our emissions in this country, we don’t count scope three. So we don’t count where the oil that’s produced Alberta is burned. If it’s exported, those countries count those emissions when they burn it, but the very production of oil and gas in Alberta requires a huge amount of energy.”

“One of the greatest sources of emissions in Canada is from the oil and gas sector and also it’s been increasing over the past couple years and so there’s a real fear that some of the approaches the Prime Minister is taking, such as potentially having another pipeline, that is going to result in increase in those emissions.”

“That is a very real point, which leads us back to the issue of national security because what Alberta’s calling for in order for them to be part of a unified Canada is more freedom to make decisions around their oil and gas industry and more access to market.”

“That’s a problem that has to be dealt with. The Prime Minister’s chosen to deal with that is carbon capture and storage. A lot of people don’t believe that technology is effective and will work. Proponents for the technology say you have to get it up and going to continually improve on it, and you don’t really know because we don’t have the investment in it.”

“There’s no clear path through that right now. One thing we know is if we completely constrain that industry, that results in growing separatist movements. It results in a lot of angry across the country and it results in a lack of national unity, which is not necessarily good for governance.”

“The Prime Minister’s doing a lot of other things which are really interesting when it comes to climate.”

“So allowing the Chinese EVs, the more inexpensive ones into the country. It’s a small percentage of overall sales, but it puts more inexpensive electric vehicles on the market, which a lot of more domestic car dealerships we’re not letting happen. So people will have more choice and this is a good thing.”

“If we can get some of those countries, like China and others, to invest in car manufacturing here, that’s no different than we have Toyota Manufacturing here. We have these companies that are foreign owned, that are investing in the car manufacturing industry in Canada. If we can set it up so that they are helping to manufacture more electric vehicles, we can really be pushing the adoption of EVs across the country.”

“When the Prime Minister made his announcement about the Chinese EVs, he did say electric vehicles are the way of the future. He is still holding onto that. Transportation is also one of the greatest sources of emissions in Canada and the only way we’re going to deal with that is when we switch to electric vehicles.”

“You’ve got him doing the industrial carbon tax, which was part of the MOU with Alberta. So you’re still seeing him working on the very heavy wonky policies like industrial carbon pricing, which do the heavy lifting of reducing emissions in Canada -is industrial carbon pricing and methane regulations.”

“He hasn’t walked those back. He is still working on those. So I think the best way to summarize it is being the Prime Minister is really hard. It’s not an easy job. It’s not for the faint of heart. Trying to hold our country together against the biggest external force we’ve had in decades, if ever, and keep us unified, continue to reduce our missions and build an economy is a very complex position to be in.”

“What I find great comfort in is I’ve seen the Prime Minister work systematically through each one of these issues and find paths forward. No path is perfect. No one path is going to give us everything we need, but it’s like he’s got his checklist. National unity check; environmental policy, working on that; dealing with the issue of canola tariffs and EVs between Saskatchewan and Ontario, check did that. He is working his way systematically through all these pieces to ensure that he’s trying to look after the needs of as many people as possible, and he does it in a way that’s not performative. It’s just very clear policy that he’s implementing.”

“The final thing I would add to that is the criticism I hear, because I listen to far too many pundits on podcasts, but they talk about how nothing’s happening yet.”

“Yes, he’s made all these announcements that nothing’s happening yet. Things do not happen overnight. If any major project is approved, it will still take years before it’s actually producing no matter what. If a pipeline is approved, it’ll take years to build.”

“There’s this expectation that an announcement today will automatically result in changes tomorrow, and that’s just not how policy works. Those of us who’ve worked in the climate movement know that when a climate policy is developed, you don’t see it start to take hold and have a real impact on emissions. It can be anywhere three to five years.”

“We have to look at is not have the prices in the grocery store gone down tomorrow as a result of his announcement on the GST rebate, but is he making the right announcements and the right commitments that will get us there over time? Is he doing it in a way that will get us there as fast as possible? I believe that he is.” 

Cortes Currents: I do have another question. Carney has given the go ahead on carbon capture and the proposed pipeline, but he also had requirements. Do you want to talk a little bit about those requirements? 

Jennifer Lash: “So the MOU is very complex. One of the challenges with it is that they’re linked together. So the carbon capture and storage goes ahead only if the pipeline goes ahead. The pipeline only goes ahead if it can be done in a way with First Nations support, and I’m going to say not opposition from the province.” 

“Legally, that is not required. Legally the government of Canada can approve a pipeline that crosses provincial borders. Without that support, politically, it is a real problem. It would be very divisive for this country if a pipeline that the First Nations in the province of BC opposed, was enforced on us.”

“So if this pipeline does not get approved and does not go forward for whatever reasons – maybe there’s no proponent, maybe the costs are just too high. There could be many, many reasons – does that mean we don’t get the carbon capture and storage project that industry has committed will result in a lot of emissions ejections from the industry? Then what do we do with those emissions? The other things that Alberta has committed to in order to get a pipeline are things like the improving the industrial carbon price and in the MOU, they talk about $130 price. When both parties walked away from the press conference, it was clear that Alberta considers that the ceiling price and Canada considers that the floor.”

“There’s a lot of details to be worked out. Environment Minister Julie Dabrusin has her work cut out for her trying to navigate these agreements around clean electricity regulations.”

“If the federal government doesn’t approve a pipeline, does that mean we don’t get anything on carbon pricing? That stuff is all very unclear and there’s deadlines coming up. There’s certain things that need to be met in April.”

“So, hope we’ll hear more soon on some of these pieces. I know there are excellent people in Ottawa trying to steer through this. I believe that Premier Smith is committed to trying to make some of these pieces work, but we don’t really know until the rubber hits the road. So , we’ll be watching to see what comes out of Ottawa and Alberta.”

(Chart courtesy Pembina Institute)

Cortes Currents: A lot of people are skeptical about the whole idea of carbon capture, but in the MOU , he said, ‘you said it works’ and therefore here’s the limit you have to make. Could you elaborate on that a bit? 

Jennifer Lash: “When it comes to carbon capture and storage, the industry has told us that this will be the savior, this massive project called the Pathways Project, which is a huge system for reducing emissions on site in the oil sands, and then storing it underground.”

“There are a lot of skeptics that say it doesn’t work. There’s a lot of skeptics that say, industry is just leading us along and that way they can continue to produce.”

“The oil companies have not really stepped up to invest in this, which is discouraging because they’re making a lot of money. They’re asking for federal and provincial money, and you think they could put more money in on it. So that’s discouraging. Technology is something that we are going to need to reduce our emissions overall, be it carbon capture and storage, or direct air capture or whatever other technologies.”

“Sometimes we need to get these projects underway to see how well they work, to improve on them to do, to have the innovation to make it happen. I’m not a hundred percent sold on carbon capture and storage. I don’t think it’s the be all end all, but I do feel that it’s something that we need to stop talking about . We need to get this project up and going and see what we can get from it. I can’t remember the amount of megatons that they would get from it, but they have told us that basically with the Pathways project going, they can meet the clean electricity regulations. So we need to hold them to that.”

Cortes Currents: Is there anything you would like to add? 

Jennifer Lash: “Yes, next time can I have a smaller question because I think we just talked about absolutely everything in Canada in half an hour or so? It reminds me that we can’t just look at the headlines and the social media posts about quick solutions, ‘if we just do this, all our problems will go away.’”

“That is not how governing works. That is not how policy works. It’s not how politics works, and I think that Carney brings the perfect balance of an understanding of economics far beyond anyone else who’s in government right now and becoming very adept at the politics in a way that is not about headlines or not about performative politics.”

“It’s about doing the hard work. He’s showing the courage to build partnerships with premiers and countries that don’t necessarily agree with all the core values of the Liberal party. If we want to move Canada forward right now, we need to be willing to really look at what are the outcomes we want and not alienate people based on their ideology.”

Links of Interest:

Top image credit: Cartoon of Mark Carney on a log ‘tighrope’ by Midjourney, prompts by De Clarke. 

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