What if we had a surefire way to create 2.6 million new post-pandemic jobs, and increase GDP by 17%, while also taking meaningful action on climate change?
Canada's resource sector is the best path to economic recovery notes Margareta Dovgal, Director of Research at Resource Works. She chats with Energy Examined host Leighton Klassen about a recent report that highlights the economic potential of Canada's resource industries in these challenging times, including recommendations on how government can support growth while driving investments in cleantech and emissions reduction.
Full transcript of podcast
Leighton: Welcome to another edition of the Energy Examined podcast. The podcast discusses the issues facing Canada's oil natural gas sector with the insiders. I'm Leighton: Klassen. Today, I'm joined by Margareta Dovgal. She's the Director of Research for Resource Works. In today's podcast, we talk with Margareta about a national project called Real Jobs, Real Recovery. The task force for the project drew on the input of organizations representing more than three million Canadian workers. This input was used to create a report called Securing Canada's Economic Future, which contains recommendations on how we can aid in the recovery of the national economy during and post pandemic. The report highlights how a positive business and investment environment could create 2.6 Million jobs across Canada, which is arguably a critical goal as all Canadians look for an economic recovery. Margareta, thanks for being part of Energy Examined today.
Margareta: Thanks so much for having me on.
Leighton: Well, let's first start with your organization, Resource Works. Can you tell us a little bit about it and what your involvement was in the Real Jobs, Real Recovery project?
Margareta: Great question. So very simply, we were a convening platform for this. I think Resource Works is best described as a nonprofit. We are nonprofit, but we do a lot of stuff. I think a lot of people consider some of the work we do advocacy or think tank work. We do a mix. So we have social media channels, a blog. And at times we do very large projects that take up the entire team. So we've been around since 2014; we're based mostly in Vancouver. And our main objective is just to start these conversations about responsible resources. For example, earlier this year, I was up in northern British Columbia spending a lot of time with Wet'suwet'en community leaders, a lot of Wet'suwet'en workers, many hereditary chiefs. And we spoke a lot about what their hopes for economic development were. So I did interviews, we recorded those interviews, and we share them with Canadians sort of at a period in time when a lot of people were asking, what do Indigenous Canadians want? Many answer as many different things. There's no one voice. And that's really what we were trying to show. But in terms of COVID, my executive director and I, we started having discussions earlier this year asking what is going to happen from this big shift that's occurring: massive unemployment, huge levels of anxiety, especially among my generation, about our future. And we knew that there was a shift coming, so we wanted to see where that led. And, you know, we had so many discussions about that. And the result that you see now is is a product of that. We approached our partners in various groups to try to present a positive message for Canadians and really bring the good ideas that are out there that industry has and that many other groups have to the forefront of the policy discussion that we are having right now nationally.
Leighton: So let's get to the report now. It's called Securing Canada's Economic Future. And as you mentioned, it contains these recommendations and how we can recover now and post pandemic. Now, there was some economic modeling conducted by Fellows Economic Consulting for the task force. Let's start there. What did this modeling indicate?
Margareta: I'm super excited about this topic. It's very, very far at the end of the report. So if someone reads it, they'll have to get all the way to the appendix to get into the nitty gritty. But basically, Dr. G. Kent Fellows, who works at the University of Calgary, he used an input-output model to estimate what would happen if resources and manufacturing, because they're so connected in Canada's economy, were given a boosts--they were given, in economic terms, shocks in a situation of substantial unemployment. So he modeled it on what we saw in 2008, 2009. And that's sort of what we're expecting with COVID: fairly substantial unemployment, you know, many businesses failing to survive after the pandemic. So, yes, if our recommendations were implemented and if the government through policy measures, was able to reduce trade costs and increase capital productivity, what would that result in? And he found and I know you quoted this number before, but I'll say it again, 2.6 million new jobs could be created. We can get a 17 percent jump in real GDP and $200 billion in labor earnings. Those are huge numbers and they are partially so large because, of course, the substantial unemployment and GDP hit that we've taken. But they still represent real opportunities for people. And if we really unlock our resources, we can see that --we could see massive boosts in employment for Canadians.
Leighton: OK, that's great. Now, you spoke a lot about the amount of research that went into this. Can you tell us a little bit about your background in terms of what kind of excites you about the concept of research and presenting these sorts of reports, even just beyond this. Just the concept of, you know, researching and providing really valuable information to Canadians.
Margareta: It's a great way to phrase the question. So I have a degree in energy and climate policy. It's a Master's in Public Administration. So public policy is a huge passion of mine professionally and personally. I mean, I got involved with Resource Works way before that. At first I was a volunteer as a student. Then I became a part time employee. But after I finished my Masters, I decided to come back to Canada and go full time. So I became the Director of Research. My own passions are fairly broad. I used to be very involved with campus organizing when I was a student. My personal background, I think, informs that quite a bit. Growing up, my family was working class and at various points, maybe most this time we were below the poverty line and what my adventures in learning about our big province and country led me to was just realizing that my experiences in urban poverty were substantially different from rural poverty and especially that experienced by remote northern and often Indigenous communities. So that's been an enduring passion of mine. Just trying to bring forward perspectives about social development. And I think energy and major infrastructure really connects with that. And that's why I'm in this line of work, because I think these stories need to be told.
Leighton: Tell me who is all involved in this report.
Margareta: Well, it kept growing. So we started with about twelve groups. And, you know, there was a balance of industries from the very beginning, but we really grew. So now we have effectively a 36 member coalition: it's industry, it's business councils, Chambers of Commerce, labour organizations, Indigenous advocacy groups and across all industries. So, for example, the Canadian Chamber of Commerce is involved. They bring hundreds of thousands of businesses. We have Chambers of Commerce from Atlantic Canada all the way to B.C., up north to the Northwest Territories and lots of different industry groups. So the Forest Products Alliance, the Mining Association of Canada recently, and other mining groups, of course, and many groups and oil and gas. Others that we have that I think maybe people weren't expecting to see, but are supercritical to this because they are also, you know, highly productive industries that are integral to our recovery: our chemistry, construction, transportation, manufacturing. And I know that this suprised some people, but these are the industries that often are very based on resources and resource investment. So, of course, there's gonna be that commonality. And I think it's fair to say that most are trade exposed and energy intensive, and that's kind of the thing that I think that brings everyone together. The other thing that we really tried to pioneer with this project was bringing labour in as well. So we have CLAC, which, you know, CLAC workers I've heard have built a big chunk of the oil sands. We have the boilermakers that operate across Canada and connect building trades. So very different groups with, you know, fundamentally this goal of ensuring that their workers have opportunities. And then finally, but most importantly, in my opinion, is the First Nations representation here. So we have several advocacy groups involved, including the First Nations LNG Alliance and the Aboriginal Skilled Workers Association. They're very important to the report and I'm happy to talk more about that later on.
Leighton: Okay. Yeah. I mean, I think a lot of people don't recognize how intertwined all of these industries are that, you know, some people see the oil and gas industry as a separate industry or construction is, you know, road construction, but, you know, they really are all involved and all support each other in our economy.
Margareta: That's right. Yeah. We have an interconnected economy. I think the thing that I really didn't understand when I was a student and, you know, I think that speaks to a lot of the things that students generally like to say about resources and industry. I didn't get that there were these connections to the quality of life that I had. You know, I mentioned that my family didn't do super great. But relatively speaking, we did amazing. That's something that most countries in the world absolutely, really, really want but absolutely don't have the opportunity for because they don't have that foundational prosperity base. They have to find it in other ways. They have to find it through, you know, being hubs of trade like Singapore. They have to find it by, you know, being really, really active in manufacturing like China. So countries that are resource rich just have an amazing advantage from the start. And all industries, you know, whether you're a lawyer in a corporate office or you're a tradesperson working on major infrastructure or you're a scientist who gets R&D funding, that in some capacity comes from a major industry. Everyone benefits in Canada from the responsible development of our resources.
Leighton: Now, when we talk about all these industries and representatives from industries, I mean, it was it was clearly a significant undertaking when you talk about a 36 member coalition of industry. Can you tell us a little bit about the process of trying to get everyone together and collecting all this information in a succinct way? And you know, any challenges that you experienced during this process?
Margareta: Well, it was a lot of work. As the project manager and I guess the research lead, it was on me to coordinate all of this and to have many, many, many calls. We had group calls. But, you know, it's really hard to get thirty-six organizations, twenty expert advisors and many representatives from each of those organizations in the same room or in the same Zoom, to be perfectly honest. So it was just having calls. So I, I'd have one and a half hour long conversations about economic policy. I talk about productivity with one person and I talk about the innovation ecosystem with someone else. We talk about Canada's climate goals and is net zero achievable. All these different conversations were happening concurrently. But I think at the end of the day, we did something that I've heard would take most organizations, most groups a year or more to do. We did that in about two months.
Leighton: Yeah, well, it sounds like based on the fact that you were able to collect this information, you know, in such a quick period of time to put this report together. There was clearly buy-in from all the participants, which I think, correct me if I'm wrong, you know, sort of speaks to the importance of this and the importance that these industries believe that we can, you know, as a collaborative country, you know, contribute to rebuilding and recovering now and post pandemic.
Margareta: Exactly. There's, I think, a lot more commonality than people expect. Different industries often have different requests of government. I mean, depending on how exposed you are. So if you're waiting for approval or permits or you have ongoing conversations about certain pieces of regulation, you might be less willing to have really like I'm going to say, aggressive policy and lobbying conversations. Other industries are not afraid to do that because they recognize the importance of just kind of being straight to the point. So I think what we accomplished was bringing together all of these very, very different but similar perspectives on how to achieve public policy goals. And we got something that had the collective consensus and buy-in of, I would say, all the resource industries in Canada at this point.
Leighton: Now, the report you mentioned that's sort of the higher level, what we can achieve if the recommendations are accepted. So the recommendations are contained in this eighty-three page report, which includes an executive summary strategically organized in three main categories. So tell me about the design of the report and how you kind of approach it.
Margareta: So our first chapter is mobilizing resource prosperity, and I think it's sort of at the heart of it. Investments and ensuring that there is private sector activity is really at the foundation of getting all of these benefits for Canadians. So as we head into the other chapters, building employment, which is about, of course, creating jobs, but also the labor market and how we can address any small inefficiencies and ensure that workers that have skills or that need skills have skills and can be put to work all the way through to accelerating innovation and environmental competitiveness. These are all like really founded in this idea that we need competitiveness. We need a good business environment for investors to be willing to invest in Canada. And these major projects. And then from that, you get benefits. You get companies that can go out and spend millions, billions on projects that totally change the emissions intensity profile of their industry. And that has happened. But for it to continue to happen and for there to be these major systemic changes, we need that investment to keep flowing. And then, of course, you get all these great benefits. You get, you know, reduced carbon intensity on our exports. And we already do pretty well. But we can keep improving that. You get really well-paying jobs, something like every single oil and gas job effectively yields six other jobs. So it's just like a massive spin off benefit that happens when you get these benefits.
Leighton: Yeah. So one of the sections, you know, talks about what we can do with our resources. Because, I mean, you know, our country's so rich with resources. So what can we say about the recommendations that you've made on that front?
Margareta: Well, there are different types of recommendations that we make. Some are more systemic, they're longer term. And, you know, they might not even be specific policies. Our first main one is government: show your support for resource industries. Declare that resource development is in the national interest and the Throne speech that's coming up, is a perfect way to do it. We didn't know when we're writing the report that parliament will be prorogued and that, you know, we'd be resetting the clock. And that is a fantastic opportunity now for government to say, look, we've heard, we've heard from industry, we've heard from Canadians that responsible resources are super valuable and will continue to be valuable moving into the future. So they can easily say, we see the value and we will recognize the value alongside, you know, talks that we're having right now about green recovery. That's ask number one. Some are more nitty gritty. So we talk about the accelerated capital cost allowance program. For someone who's not a tax expert, that might be kind of boring, but little measures like that can have really, really vast impacts because they change the calculus that investors and companies are making when they look at investment decisions. And most of them are on a very long timeline. So, you know, a project that's being built right now was probably in some aspect of planning about a decade ago, five years ago. So we have to look forward. So the things that we do now in a pandemic period might radically influence the employment situation ten, fifteen years from now. So we need to think carefully about what levers that decision makers have. What sort of impacts they can have. The thing that I always like to circle back to is reconciliation and Indigenous employment. I think if we provide opportunities for First Nations, Inuit and Metis communities, as our report outlines, to raise capital in order to make investments in major projects or really anything that can provide open source revenues in the long term, we can help those communities take control of their own economic destiny and they can break out of cycles of poverty. I mean, so many communities, especially in British Columbia, I know there's tons of examples that I'm probably not familiar with across Canada have done this by really, really investing and working with industry. So the Haisla Nation on the northwest coast, it was hugely, hugely profitable for them to have gone into this. And I hear this anecdote a lot. If you're a member of the Haisla Nation and you want to go to hairdressing school, great, that's covered. You want to go do your Ph.D. in marine ecology. Fantastic. That's covered. Go ahead and do that. I mean, you have the full spectrum of options available for people, and that's only possible because that community has maximized the benefit that they can get from LNG Canada and the export facility that's being built there. So, you know, there's examples of that where communities want those opportunities, but they don't have them because they can't get a secured loan. And what we do is we have recommended a couple of tools that the federal government can use to help communities get access to that capital so they can invest and grow for the future.
Leighton: Now, you touched on this a little bit earlier, but I want to talk a little bit about the recommendations on climate action. And this is particularly interesting because the newly appointed federal finance minister, Chrystia Freeland, recently said, and I quote, 'Restart of the economy needs to be green'. So how do these recommendations in this report support that notion?
Margareta: There's a sort of an anecdote I always like to tell people. And I think for someone who knows oil and gas, it'll be like, duh I know this, obviously. But for people that aren't from an oil or gas background, it's a bit of a surprise. It's the idea that cost and energy use and emissions are all tied. So if as a company, you're going to reduce the money you spend on energy for whatever energy intensive activities you have, you're also going to be reducing emissions and at the end of the day, that's good for the environment. So it's this idea that when we allow companies to innovate in pursuit of cost reductions, chances are they're also innovating in pursuit of emissions reduction. And that's true in the oil sands. We know that's true in mining. It's true in any heavy industrial activity where a lot of energy is being used. So this idea that if you align the incentives and you have climate action and natural resource development on the same page, you can get really good outcomes. I mean, we've already seen that in practice. I always forget the numbers, but something like 30 percent reduction over the last 10 years or something like that. But there are massive improvements when incentives are provided to industry to innovate and to do better environmentally. And that's true for management of tailings. That's true for water, for land protection and all of these sorts of things. I really like that the federal government has been willing to talk about the benefits of, let's say, future-friendly hydrocarbons. That's a term that I've heard a few times. So the resource minister, Mr. O'Regan, recently spoke about hydrogen in Alberta being the future, batteries, clean tech. That's great. Those are super important things. And, you know, we get that through mining. You get that through blue hydrogen, which requires natural gas to produce. And that's, of course, good for Alberta. But you also get to these really, really good future friendly outcomes through allowing Canadian oil and gas products to be exported. And I'll never get sick and tired of saying this. I think it's really important. We have really high ethical standards. We are operating under a carbon price. There's a lot discussion happening right now about cumulative burdens. And you know how different emissions standards are calculated in terms of like the clean fuel standard or methane regulation. So these different levers need to be aligned in a way where there is still that cost competitiveness. But I'm confident that because of the regulatory environment that we have, the things that we export to other countries are far superior. And the recommendations that we have are really designed to grow that, to expand that. So we talk about incentivizing carbon capture and storage. We talk about using small modular reactors in the oil sands. We talk about in the first year on carbon storing what products and how, you know, increasing domestic demand for these things for any type of construction, it has clear environmental benefits. At the end of the day, I think all of these things come back to the expertise and potential that is already there. Our oil and gas industry is a perfect example of this. When we want to make huge leaps forward in terms of energy efficiency, in terms of even, you know, it's called direct air capture, capturing CO2 from the atmosphere and storing it. We depend on the expertise that already exists that has been developed through decades of investment and activity and specialization in Alberta. And these are things that I think all Canadians can be really proud of. And the government, the federal government should be looking at as a source of solutions, solutions to really, really equip Canada to move forward as the entire world moves forward on climate action.
Leighton: Yeah, sounds like lots of innovation and a lot of a lot of really exciting technologies in our resource industry that we can really capitalize on. Now, the report was issued on August 18th. I'm interested to know what's the reaction been so far?
Margareta: Well, we got some national coverage. I mean, I think, to be perfectly honest, the cabinet shift has taken up a lot of airtime, and I think it speaks to something really interesting. Our governments, if reports are to be believed, there's a debate happening at the cabinet table right now about what is the path forward for Canada. Is a green recovery--does that exclude resources? I don't think so. I don't think it has to. Certainly our report says that they're compatible and that you can get really, really good environmental outcomes if you support the resource industries and in getting that addition out there and that investment. But, you know, our report has gotten coverage. We were picked up by the Calgary Herald. Some people might have seen it on the front page a couple weeks ago. And we've been submitting it to folks in government. So we're trying to have those conversations about what this report means in the lead in to a new session of parliament. We want there to be mentions in the throne speech of what responsible resource industries can do for Canada. I mean, do I even need to mention the massive deficit that we currently have? Three hundred and forty three million is a billion is a million. One of those. It's never been that bad. So we really want to express this urgency because the decisions that we make now, like I said, they have massive impacts over a 15, 20, even 30 year timeline for Canadians. And a lot of the problems that we're sort of staring down the pipe at right now, they're not hitting us immediately, but they're going to hit us. We know that the US is going to keep shifting away from buying our products. We know that there's going to continue to be demand for the kinds of things that we can produce here in this country, in other countries. And Australia, Malaysia, Saudi Arabia, Russia are massively benefiting from this right now because they're thinking long term. They're thinking how can we provide enduring benefits for our people in long term timelines? So we want to ensure that the federal government, as it makes investments, as it looks at renewable technologies, also thinks of investment conditions and competitiveness. So not all of this is up to the federal government. Provincial governments have a role to play here, and companies themselves and their shareholders need to make decisions to bring this investment home. But I think it's critical that at least we set up the runway. So if industry is ready to invest and I've heard yes, I've heard yes very loudly that we're prepared to see that investment. And if we fail to do that, then we're not just letting down, quote unquote, big business. I think a lot of people sort of missed the mark there in this idea that it's just for business, we're letting down Canadians if you don't enable this investment to land and we're letting down future generations, who will depend on the decisions we make today to assure their quality of life going into the future.
Leighton: Yeah. So that brings me to my next question for people listening, just regular Canadians. Is there anything that they can do to support this initiative and help move it forward through the government?
Margareta: Yes. So a very simple tool. And this has a lot of impact. If you ever have an issue, write to your MP about it. And this is part of what I'd encourage anyone listening to do. If you've seen our report, you can find it at RealRecovery.ca. We also have a French version, vrairelance.ca, if you speak French, you can then take that report and you can send a link or you can pull out points that are important to you, and say I really, really care about this point about ensuring that there are digital infrastructure opportunities in remote communities so people can train for skills. For example, if that's something that's really important to you, you can take that point and you can plop it into an email, and the House of Commons has a Find your MP tool. You plug in your postal code and then you find out who your MP is. And you can just write them. You can say: 'This report matters to me. It speaks to the things that are going to impact my life going forward, my children's lives. I think you and your government, if the MP is government MP, need to act on this.' And you can do that fairly simply. You can quote the report. And more importantly, personal stories really make a difference. You know, we probably will have some kind of form letter heading into the next parliament which will share and encourage people to dissent. But nothing makes that impact more than hearing personally from a constituent. And that's what I encourage everyone to do. Share your personal stories about why responsible resource investment, whether that's in oil and gas, mining, forestry, manufacturing, chemistry, transportation, construction: why does it matter to you and what impact will it have for your family.
Leighton: That's great. And you kind of touch on this. But I did want to know if you want to speak to a little bit more on what is the next step for this report?
Margareta: We'll be taking it heading into the next Parliament. I hope to have some conversations with decision makers about this, I know sort of I've heard there's been some enthusiasm in response to a couple of our recommendations. I can't say much more than that, but I think there's an opportunity here. And, you know, I'll take it as an absolute win if even a couple of the things that we talk about are mentioned in the Throne Speech. If there's legislation introduced for some of the more ambitious and forward thinking things that we propose, that would be also really great. But what I'm really hoping for here is that we've begun a conversation. We've started a conversation with Canadians and with the industries that make our lives possible about how we can work together to ensure good public policy outcomes for everybody. So we'll keep working with this big, broad coalition that we've put together. And hopefully, hopefully this moment of national anxiety and stress about the pandemic lends itself to a productive and collaborative conversation about our path forward. We've had so many polarized debates about environment versus economy, and I think it's time we get away from that because those things aren't productive. They aren't accurate relative to what I've seen. And they certainly aren't going to be the solutions to the uncertainty and stress that COVID is going to result in for, I'm gonna say the next five, six years. I don't think the impacts are just going to run away. They're going to continue. So if we want to have solutions there, we need to take these messages, take these ideas that we've worked hard to produce and move them forward. You have conversations with your friends, with your family, with your coworkers. So when government starts asking, well, what do we do? What do Canadians want us to do? They're hearing that responsible resources are a huge part of the solution.
Leighton: Well, that sounds really great. Thanks again for being on the show, Margareta.
Margareta: Thank you so much for having me. It was a pleasure.
Leighton: And that was our conversation with Margareta Dovgal. She' the Director of Research for Resource Works. You can view the full report by visiting RealRecovery.ca. Stay tuned for our next Energy Examined podcast. And if you like this one, share it with a friend and make sure you subscribe on whatever podcast network you use. For more stories and interviews on Canada's energy industry, check out our website, context.capp.ca. See you next time.