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Canada should stick to its own path in clean tech

U.S. President Donald Trump may be no friend to environmentalists, but that is no reason for Canada to follow his path.

KEVIN LAMARQUE/REUTERS

Since American voters saw fit to elect Donald Trump as President, a chorus in this country has called for sharp pullbacks in spending and policies directed at advancing green technologies. It is off-key.

Mr. Trump is not the environmentalist's friend, but that is no reason for Canada to follow his path. In fact, the opposite is a better bet. Competitiveness in energy and environment won't be achieved by reverting to 20th-century ways until the United States changes its political mind again.

On the surface, global efforts to fight climate change appear to have taken a big hit as the new President vows to pull the United States, one of the largest carbon emitters, out of commitments made in the Paris agreement under the banner of protecting business interests.

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Meanwhile, the U.S. Environmental Protection Agency is in for a stretch of reduced clout under new administrator Scott Pruitt, who has said he is poised to start slashing climate-change and water-pollution regulations that are the purview of the organization.

With the moves in the United States, the farther right on the Canadian political spectrum one goes, the louder the demand for Alberta and Ottawa to abandon their own environmental spending and policies in response (though to be fair, many of those folks were never fans of such things). Canadian energy and other trade-focused industries, the argument goes, can't possibly compete as Mr. Trump unshackles U.S. business. The fact is, though, that business is changing fast in both countries.

Here, some of the largest corporate players apparently see the Trump era as an opportunity to advance technology and improve efficiency in ways that will put Canada further ahead when the U.S. political cycle turns back around.

The energy sector's top focus for several years has been getting oil and gas to markets outside the United States – currently its only meaningful foreign market – and a selling point of the initiative has been its commitment to making advances in emitting less pollution, disturbing less ground and using less water.

Suncor Energy Inc., for instance, has shelled out $150-million annually on research and development aimed at improving environmental performance, even through the downturn in oil prices that crimped cash flows.

It is also one of 12 oil sands companies that banded together to share environmental technology under the Canada's Oil Sands Innovation Alliance banner.

It is a partner with oil sands rival Cenovus Energy Inc. and BC Cleantech CEO Alliance in Evok Innovations, a fund directed at speeding up development of environmental technology for fossil fuels.

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All of this is apart from some impressive advances in renewables across the country and funded by multiple sources – from government agencies to venture capitalists.

So there's plenty of R&D going on in the private sector, and it's meshed with government policy. For Alberta, getting to this point has been painful. Premier Rachel Notley's climate plan was a risky move for her government when the collapse in oil prices stretched the finances thin. The new carbon tax, deadlines on coal-fired power and a cap on emissions from the oil sands have not been an easy sells.

Ottawa is also closing in on a Canada-wide carbon price, as it moves toward meeting Paris commitments to curb carbon emission.

At least some portion of this political capital is being spent to improve the Canadian reputation with global trading partners, in efforts to open new routes and expose energy products to more lucrative markets. These imperatives still exist.

Much has been made of new trade threats emerging in Washington, as Mr. Trump looks to renegotiate the North American free-trade agreement and the U.S. Congress considers a border-adjustment tax that has the potential to harm Canada's exports to its biggest customer.

To head it off, business and political leaders have employed a Team Canada approach that appears to be resonating in the United States, including with many state governors, who themselves have considerable weight in such matters.

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Taking a similar unified tack with environmental technology, both in fossil fuels and alternatives, will pay dividends in the years to come regardless of which way the U.S. political wind blows. As the last administration showed, it could start to change direction in midterm elections less than two years away.

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About the Author
Mergers and Acquisitions Reporter

Jeffrey Jones is a veteran journalist specializing in energy, finance and environment for The Globe and Mail’s Report on Business, based in Calgary. Before joining The Globe and Mail in 2013, he was a senior reporter for Reuters, writing news, features and analysis on energy deals, pipelines, politics and general  topics. More

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