‘We’ve had five years and they’ve had four weeks’: Canada’s Environment Minister seeks common ground with U.S.

Open this photo in gallery:

Canada and the United States are taking the first, tentative steps toward a more continental approach to fighting climate change.

In an interview after his first call with President Joe Biden’s top climate adviser, Gina McCarthy, Environment Minister Jonathan Wilkinson described a conversation that touched on an array of potential new agreements. Those could include cutting methane emissions from fossil fuel production, expediting sales of electric vehicles and increasing hydroelectricity exports from Quebec to states seeking to get off coal.

At the same time, Mr. Wilkinson acknowledged that he began trying to navigate the process of preventing Mr. Biden’s Buy American policies from hurting a Canadian clean-technology sector seeking to compete for large U.S. government spending on decarbonization.

It’s a dialogue that is at its earliest stages, in part because much of the new U.S. administration’s focus is on simply reversing environmental deregulation under former president Donald Trump.

“I think that we all have to be cognizant that they’re coming into office after four years in which effectively nothing was done on the climate file,” Mr. Wilkinson said. “We can’t expect that they are at the same level as we are in terms of their thinking on these things, given that we’ve had five years and they’ve had four weeks.”

But the interview made clear both the emissions-reduction and economic imperatives in commanding the attention of Mr. Biden and his top officials. Canada is looking to benefit rather than suffer competitively from a highly ambitious presidential climate agenda that includes decarbonizing the American electricity grid by 2035, net-zero emissions across that country’s economy by 2050, and spending as much as US$2-trillion toward those ends.

Addressing methane emissions from the oil and gas sector was notably Mr. Wilkinson’s first example of potential collaboration that they discussed.

Both countries presently have a target, set when Barack Obama was in the White House, to curb release of the highly potent greenhouse gas by 40 to 45 per cent from 2012 levels by 2025. Neither currently appears on pace to meet it, although Canada is much closer than the U.S., which effectively abandoned any efforts under Mr. Trump. But Mr. Wilkinson said the idea now is to work on an agreement to pursue “far more ambitious” reduction goals for 2030 and 2035.

Although the actual work of methane reduction mostly involves domestic regulation, Mr. Wilkinson held it up as an area where it’s economically advantageous to move in lockstep.

“It essentially eliminates some of the concerns that the oil and gas sector in Canada have that somehow this would make them less competitive, vis-à-vis the United States,” he said. In fact, he suggested, there could be new opportunity for Canadian industry “in terms of helping the Americans catch up,” when it comes to technological solutions to reduce methane leakage during extraction and processing.

Seeking a green-economy boost on the other side of the country, Justin Trudeau’s Liberals appear to be joining Quebec’s government in promoting that province’s abundant hydroelectricity as a solution to decarbonization challenges in the northeastern U.S., which Mr. Wilkinson appears to have raised during the call with Ms. McCarthy. Although that would primarily be a matter for provincial and state governments and utilities to sort through, he said Ottawa could “try to set a framework” at the national level.

Such a strategy would have some detractors in Canada, because neighbouring provinces could be competing with U.S. states to try to get some of Quebec’s surplus clean electricity. But Mr. Wilkinson suggested it could be possible to forge stronger grid ties between provinces while also making hydro “a significant export to the United States, in the same way that we export oil and gas.”

While the U.S. may lean on Canada somewhat for both methane and electricity solutions, Ottawa is looking to Washington for leadership on vehicle policy – crucial to reducing transportation emissions, but an area where this country is the junior partner in an integrated market. And the conversation this week touched on two aspects of it.

The first is fuel-efficiency standards for new vehicles, on which Canada has long synchronized with the Americans. Mr. Biden’s administration is in the process of setting new rules through 2025. A common expectation is that it will adopt a compromise put forward by the state of California, between highly ambitious standards set by Mr. Obama and laxer ones with which Mr. Trump replaced them. Mr. Wilkinson implied that was indeed the likeliest outcome given the tight time frame, and that it might be more fruitful to push for higher standards from 2026.

The second is the prospect of a continental mandate requiring a growing share of sales to be zero-emissions vehicles, which Mr. Wilkinson previously said he would raise with Mr. Biden’s administration. Having now done so, he reported that “there’s definitely interest on both sides” and that he expects further discussion of it.

There are also signals about early priorities in what they didn’t discuss. Despite recent speculation about continental implementation of carbon border adjustments, which can attach tariffs to carbon-intensive imports, Mr. Wilkinson said the issue is “not the first one out of the gate” for major cross-border discussion. That’s partly because of the difficulty of developing such a system when the U.S. doesn’t have a domestic carbon-pricing system in place.

“Yes, it will be part of what I think we want to talk to them about,” he said. “But there’s a lot of things we can do that will get us farther down the climate action path quicker.”

For all the talk of those areas of shared interest, American protectionism inevitably casts a shadow, after a recent executive order by Mr. Biden directing that U.S. agencies’ clean-tech purchases should be “Made in America.”

“It did come up, and it is something that we’re going to need to continue to talk about,” Mr. Wilkinson said. “My argument to them is that we’re absolutely aligned in terms of what we both want to do from an environmental perspective; we’re both aligned in terms of this being a critical way to create economic opportunity. And a lot of this is best done when we think about it on a continental basis.”

An undertone of much of what he had to say otherwise is that working as a partner on various forms of emissions reduction could help insulate Canada from an elbows-out approach to clean-economy competitiveness. But it will also mean finding the right balance in how much stock to put in co-ordination with a bigger neighbour looking out for its own interests.

Mr. Wilkinson comes at it as “somebody who has always been a Canadian nationalist, in the sense that decision-making power for Canada should reside in Canada.”

But “in a number of these areas,” he said, playing off each other’s strengths is going to be the surest path to reduced emissions and more green jobs on both sides of the border.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.