Trudeau’s cabinet choices put the oil-and-gas sector on notice

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Justin Trudeau has fired a shot across the bow of Canada’s fossil fuel industry with the appointments of a pair of climate-focused ministers in his new cabinet.

Steven Guilbeault, who before entering politics was one of Quebec’s most prominent environmentalists, is now in charge of Environment and Climate Change Canada. He can be expected to bring an unusually activist perspective to a ministry that, among other key responsibilities, will soon be tasked with making good on the Liberals’ campaign promise to impose greenhouse gas emissions caps on the oil and gas sector.

Jonathan Wilkinson, who was an effective environment minister for the past two years, has been shifted to Natural Resources, the department primarily responsible for relations with fossil fuel producers. He is clearly being sent there to make change in a department that has been relatively deferential in that relationship, and that has slow-rolled the many components of the Liberals’ climate agenda for which it is responsible.

The Natural Resources shake-up, in particular, is a bold and probably necessary move if the government is to have much chance of meeting its new commitment to a 40-per-cent reduction in GHG emissions from 2005 levels by 2030. And Mr. Guilbeault’s new role in Environment will be well received at COP26, the two-week United Nations climate summit set to begin in Glasgow in just a few days.

But how successfully Mr. Guilbeault and Mr. Wilkinson are able to move the country toward its climate targets, without significantly worsening national unity in the process, will depend on how everyone responds now: the ministers themselves, the departments they will be leading, and the fossil fuel industry, which may be challenged by Ottawa in a way that has never happened previously.

Of the two ministers, Mr. Guilbeault is likely to generate the most polarized reactions.

In some ways, the Environment Department should be an easy and natural fit, after a tumultuous first cabinet post at Heritage, where he struggled with an attempt to regulate the internet. He shouldn’t have much difficulty representing Canada on COP26′s international stage, despite minimal preparation time. He has been to plenty of that conference’s previous editions and can speak more knowledgeably on climate matters than many of his international counterparts who have been in their jobs longer.

But he could struggle with the weight of expectations from climate activists excited to have one of their own in such a key role. He will still have to balance what is environmentally ideal with what is politically tenable, while steering plans that include the continued development of national emissions targets and accountability mechanisms, an in-the-works climate adaptation strategy and new sales quotas for electric vehicles.

And he will face immediate suspicion from the fossil fuel industry and its champions in the provincial governments of oil-producing provinces. That will especially be the case when it comes to the lengthy process of developing and implementing oil and gas emissions caps. Out of the gate, both Mr. Guilbeault and those interests will need to show some willingness to engage with each other, which might not come naturally to either party.

As if to demonstrate how challenging that could be, Alberta Premier Jason Kenney responded to Mr. Guilbeault’s appointment by calling it “very problematic” and exhorting him to “quickly demonstrate to Alberta and other resource-producing provinces a desire to work together constructively on practical solutions that don’t end up killing hundreds of thousands of jobs.”

But Mr. Wilkinson’s new role may be more pivotal. While the Environment Department has important regulatory responsibilities, the much bigger Natural Resources department has greater capacity for implementing programs involving energy production and consumption.

Until now – including under its most recent former minister, Seamus O’Regan, who prioritized mending relations with oil-producing parts of the country – Natural Resources has hardly leaned into the transition to a low-carbon economy.

Even on aspects of that transition for which the fossil fuel sector has some enthusiasm, such as the development of hydrogen as an alternate fuel source, Natural Resources has moved slowly and tentatively. And it has seemingly tried to bury plans that carry risk of backlash, such as a 2019 Liberal platform commitment to develop a transitional strategy for oil and gas workers who could be displaced by a global shift away from the product. It went pretty much nowhere in the two years that followed.

Mr. Wilkinson will be charged with lighting a fire under his new ministry on those fronts. And likewise on other essential elements of the government’s climate strategy that (in some cases oddly) fall under Natural Resources’ watch – including electrical grid modernization, energy retrofits for buildings and electric-vehicle charging infrastructure. (He will also likely have a hand in the oil and gas emissions caps.)

Based on his time in government so far, Mr. Wilkinson seems well-suited to the tasks at hand. He has a reputation for driving departments hard, reflected in a quick regulatory and planning pace at ECCC. He also has a relatively low-key communications style that can help minimize conflict, which was on display when he ushered in plans for carbon-pricing increases with minimal fuss.

Bringing a newly green focus to an entrenched Natural Resources bureaucracy, and to his interactions with the department’s sectoral stakeholders, will test the limits of those skills. At the same time, dealing with Mr. Wilkinson will test the seriousness of fossil fuel companies that have been making aspirational net-zero emissions pledges and insisting they’re willing to work with government on sustainability.

Mr. Trudeau could have gone further with his new cabinet to ensure a strong climate focus across government. Other ministries that have a piece of that agenda, such as Agriculture, may still need a kick. There is possible cause for concern about Infrastructure, which was given a new focus on climate sustainability and resilience under Catherine McKenna before she declined to seek re-election. The department is now being assigned to the more old-school Dominic LeBlanc.

But the fossil fuel sector is the single biggest contributor to Canada’s unusually high per-capita emissions. Financial markets and trade partners are increasingly wary of the industry, and its future in our economy is the biggest open question when it comes to climate transition.

The answers won’t come merely from appointing new ministers to deal with it. But Mr. Trudeau appears to have signalled that he’s done dancing around the subject.

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