Justin Trudeau, Doug Ford show improbable common purpose on building low-carbon industries

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Maybe it really is possible for a progressive federal government and a more conservative provincial one to work collaboratively on climate and energy policy.

One reason for hope came with last week’s announcement that the Canada Infrastructure Bank will provide $970-million in financing to help the provincial utility Ontario Power Generation build the country’s first small modular nuclear reactor (SMR). If the project is successful, it will provide Ontario with additional non-emitting electricity, and proof of concept for a technology that could be deployed elsewhere in the country and be a significant export.

Another announcement on the same day got less attention, but may be at least as significant when it comes to common purpose. That was news that Ontario is signing on for a new program – called Regional Energy and Resource Tables - in which Ottawa works separately with each province to develop a handful of sectors which both sides consider important for low-carbon economic growth.

In Ontario’s case, they’ve mutually identified five such areas, including nuclear technology deployment. A related one is meeting growing electricity demand with clean supply. The others are critical minerals (key to the electric-vehicle supply chain Canada hopes to build), non-emitting hydrogen (which could help transition Ontario industries such as steel), and sustainable forestry.

The fact that these two governments could agree on these goals, while acting immediately on one of them, is a welcome indication of emerging cross-partisan recognition that environmental and economic goals now intersect. That is, if they don’t allow looming disagreements on other matters to force a quick return to the perpetual narrative of climate-policy conflict.

Ontario is the ninth province or territory to launch one of the working groups with Ottawa. But with Alberta and Saskatchewan yet to do so, it’s the first among governments initially most resistant to Prime Minister Justin Trudeau’s climate agenda.

After taking office in 2018, Premier Doug Ford joined his Alberta and Saskatchewan counterparts in an unsuccessful legal challenge of federal carbon pricing policy, while tearing up renewable electricity contracts, ripping out EV charging stations, and generally acting as though any attempts at clean growth were a frivolous distraction from returning Ontario to its industrial glory days.

Mr. Ford is still no fan of carbon pricing, and has shown little interest in emissions reduction for its own sake.

But he has clearly recognized that the energy transition is somewhere jobs and economic growth can be found.

The shift is to his credit, for proving pragmatic when faced with realities such as manufacturers wanting assurances of reliable, low-emissions electricity before making investments.

It’s also to the credit of the federal Liberals, who once delighted in using Mr. Ford as a foil, but have since realized it’s in their interests to cultivate areas of clean-economy policy where interests align and play down disputes.

The two sides seem to have first truly converged with their combined efforts to successfully land commitments from automakers to assemble EVs in the province.

Mr. Trudeau’s Liberals were by most accounts ahead of Mr. Ford’s Progressive Conservatives in making that effort. But once they brought him aboard, it seemed to help whet his appetite for making Ontario inviting to climate-conscious industry, and working further together along the lines announced last week.

Whether that working relationship can be harmoniously built, despite still not seeing eye-to-eye on key areas of climate policy, will be tested soon on a couple of fronts.

One is carbon pricing. While Mr. Ford remains opposed to the fuel charge paid by most consumers, his government did implement its own version of the separate system for large industrial emitters, which Ottawa deemed sufficient to avoid the backstop federal industrial-pricing system being imposed on Ontario.

But Mr. Trudeau’s government has been revisiting all such equivalency agreements, demanding greater stringency. And Ontario’s negotiations are among the most fraught, because its current industrial system is laxer than most other provinces’.

The other is how electricity generation is regulated. Despite Mr. Ford’s enthusiasm for nuclear and hints of openness to wind and solar power, his government’s strategy for meeting rising power demand involves increasing natural gas usage. That puts it on a collision course with federal plans to introduce a new Clean Electricity Standard mandating a net-zero emissions grid by 2035.

How those issues play out will reveal both governments’ willingness to compromise, with Ottawa especially in a tricky spot.

The federal government can’t just set aside its carbon-pricing expectations, or fill the electricity regulation with Ontario-oriented loopholes, without blowing holes in already tenuous plans to meet national emissions targets.

Ottawa has to hope Mr. Ford keeps moving close enough to its turf to find middle ground that maintains its credibility, including with other provinces.

But where unresolvable disagreements on climate ambition remain, the two governments might now be at a point where they don’t allow them to totally define the relationship.

There is lots of work to be done - from smartly combining spending powers to speeding up approval processes - in the sectors they’re targeting together.

And the more they can keep presenting a united front, the better they’ll be positioned to attract clean investment that’s vital to future competitiveness – and send a signal across the country that there’s room for consensus in climate policy, even among those who initially gravitated toward combativeness.