We’re putting our standard of living at risk if we don’t develop a more balanced approach to harnessing Canada’s energy future.
That was my message on the Canadian Club of Toronto stage where I hosted an important conversation about our country’s energy future with Enbridge CEO Al Monaco.
As I travel the country and world, I’ve heard a shared sense of frustration and concern from business leaders, clients, and communities. Canadians are not happy with our inability to get things going and they’re telling governments they want an approach to energy that transitions Canada to a lower carbon footprint, while also helping every Canadian household maintain the quality of life they have come to enjoy.
There’s no doubt Canada is trying to reconcile competing ideas as we attempt to balance the need to reduce our carbon footprint, but also produce more energy to supply growing demand globally. But we’re entering the 2020s without a clear strategy to manage our energy resources and our consumption.
This is not a binary choice. We absolutely need to do both.
There may be no greater issue for Canadians and the country today. Investment in energy is critical to ensuring our country remains prosperous and sustainable for generations to come.
Investment in energy is critical to ensuring our country remains prosperous and sustainable for generations to come.
It matters. And here’s why:
- The world is consuming more energy, and carbon emissions are rising too: The International Energy Agency (IEA) thinks global consumption of oil and gas will increase 27% by 2030, meaning that any production cuts from Canada will have no bearing on other country’s growth plans. At the same time, global carbon emissions hit a record last year and have risen over the last decade in most major countries. Business as usual simply won’t work.
- Canada can supply a lot of that energy – cleanly, efficiently and progressively: We have the world’s third-largest oil reserves after Venezuela and Saudi Arabia, but we aren’t exporting broadly to the world. In 2017, 99% of oil exports went to the U.S., while we imported close to 1 million barrels a day – nearly two thirds of it coming from our neighbour to the south.
- We won’t help the world meet its energy needs and move to cleaner fuel sources on our current path: Capital investment in Canadian oil and gas has dropped 49% since 2014. The delays and lack of clarity in building new infrastructure projects are creating price volatility, reducing our competitiveness, and causing global energy companies to stay away from our country. We can have the most positive impact on the planet’s carbon footprint by better investing in our resources and exporting cleaner and more efficient energy to the world.
- Energy is part of Canada’s economic fabric, and is critical to funding our social needs: The sector accounts for 10% of our GDP and has benefited the economy in terms of jobs, investment, and national wealth. Over the last five years alone, the sector has contributed $90 billion to government revenues, which covers about 10% of what Canada spent on health care over that period.
- With foresight, we can generate more energy, grow our economy and cut emissions too: RBC Economics estimates that with a careful but ambitious approach to growth in the sector, we could add another 1.1% to our GDP – akin to adding an entire auto sector. In this scenario, Canadian governments could earn another $195 billion in revenues between now and 2030, and investing that money in technology could also cut emissions by a third.
This can truly be our next big journey. We’re having the conversations. Now we need leaders to unite and make a more environmentally and economically sustainable energy sector happen.
FROM A LINKEDIN ARTICLE, APRIL 3, 2019
Engaging Canadians | 2018/2019 Annual Report
Dave McKay, President and Chief Executive Officer, Royal Bank of Canada