A green COVID-19 recovery: how Canada can chart a sustainable path forward for the economy

More than a dozen environmental organizations in Canada are calling on the federal government to attach “green strings” to its economic recovery measures that prioritize both workers and efforts to address the climate crisis.

 In a report released publicly Tuesday, the International Institute for Sustainable Development outlines seven key principles for Ottawa to apply to any economic bailout packages or stimulus spending, including tying financial support for industry to major emissions reductions and ensuring that recovery efforts increase social equity. Thirteen other organizations, including Environmental Defence, Équiterre and David Suzuki Foundation, have signed on to the report. 

“Rather than seeing green strings as red tape, we should be seeing it as a way to maximize our recovery and ensure that the economic returns we get from recovery spending benefit Canadians in the best way possible, not only through jobs, but through a healthier environment, less pollution, through healthier ecosystems that allow Canadians to thrive in the future,” said Vanessa Corkal, a policy analyst with the International Institute for Sustainable Development and lead author of the report.

“It’s about really seizing on a huge swath of opportunities to create a healthier, a fair, a resilient and a competitive Canada,” said Isabelle Turcotte, the director of federal policy at the Pembina Institute, which endorsed the report. “These investments are going to define the wellbeing and the economic strength of Canada in that decarbonizing global market.”

Here’s what a green recovery could entail and why we need one.

Why does a green recovery matter for Canada?

Even before the COVID-19 pandemic struck, the world was dealing with pressing climate and biodiversity crises that will continue to have devasting impacts if left unaddressed. 

The Intergovernmental Panel on Climate Change warned in a 2018 special report that the world has just 10 years to slash greenhouse gas emissions by about 45 per cent from 2010 levels to avoid the worst effects of climate change. 

“We know that the health impacts from climate change are going to be extremely high,” Corkal said. Already, climate change has been linked to deadly wildfires and floods, shrinking glaciers and more intense heat waves.

While Canada is currently on track to miss its 2030 emissions reduction target, the government has committed to exceed that goal and to achieve net-zero emissions by 2050. How Ottawa rolls out its economic recovery plan could make a big difference for whether the country is able to achieve its climate goals.

“What we’re about to do in Canada and globally is invest massive sums of money over the next six to 24 months that would usually be invested over the next five to 10 years,” Turcotte said. 

“We’re really about to borrow from the future, so we have a responsibility to make sure that we are going to be investing this money with a long-term view to rebuild better,” she said.

The report notes “there is strong public support for ensuring a green recovery,” and points to an Abacus Data-Clean Energy Canada poll of 1,800 Canadians conducted between May 14 and 17, which found 58 per cent of respondents supported continued efforts to fight climate change. 

Another poll, released Tuesday and conducted by Pollara Strategic Insights for the International Boreal Conservation Campaign, found 70 per cent of 3,019 respondents want to see conservation of nature included as part of the economic recovery. That poll also found 72 per cent of respondents believe the government should invest in Indigenous stewardship as part of the economic recovery. 

Australia just committed $650 million to Indigenous rangers programs. Should Canada do the same?

How has COVID-19 affected the Canadian economy and what has been the government response?

The economic impact of the COVID-19 pandemic has been “severe,” the Conference Board of Canada says in the summary of its summer 2020 outlook, published last month. About three million Canadians lost their jobs at the height of the pandemic and while 300,000 of those jobs were recovered in May, many others won’t be regained any time soon. The Conference Board expects there to be one million fewer jobs in 2020 overall than in 2019.

Lower-wage workers have had a particularly challenging time, with a higher drop in employment in March and April, according to Statistics Canada’s May Labour Force Survey. While a higher percentage of low-wage jobs were recovered in May compared with overall employment, almost a quarter of low-wage workers were still working less than half of their usual hours.

The federal government has already invested billions of dollars to help protect people and businesses from the worst impacts of the economic crisis triggered by the pandemic and a number of those measures have been tied to environmental outcomes, Corkal noted. 

In the spring, for instance, the federal government announced $1.72 billion to clean-up orphan and inactive oil and gas wells, an initiative the government said would create thousands of jobs. The government also announced $750 million to create an Emissions Reductions Fund that would support the oil and gas industry to reduce emissions of methane, a potent greenhouse gas, in particular. Meanwhile, as a condition of accessing financing through the Large Employer Emergency Financing Facility, a program aimed at supporting Canada’s largest employers, companies will have to publish annual climate-related disclosure reports.

Prime Minister Justin Trudeau said in April that “just because we are in one crisis right now doesn’t mean we can forget about the other crisis, the climate crisis that we are also facing as a world, as a country.”

“So, I think the government is very much aware that this is a priority,” Corkal said. The key, she said, is making sure that these “green strings” or principles are applied to all government aid and stimulus packages aimed at all sectors of the economy, from agriculture to construction. 

How can Canada support high-carbon industries while still driving green innovation?

The International Institute for Sustainable Development’s report, which was submitted to a House of Commons’ committee in June, outlines seven principles and conditions that should be attached to all economic recovery measures.

The first principle recommends that companies receiving federal financial support be required to develop a plan to achieve net-zero emissions by 2050. In situations where financial support is provided to emissions intensive industries, such as aviation or oil and gas, the institute recommends the government find ways to ensure that support helps drive a transition to a low-carbon economy. For the airline industry, for instance, the report suggests conditions to slash emissions from ground operations.

“Support should not create or lock in brown infrastructure, such as new infrastructure that increases capacity for emissions-intensive fossil fuel production,” the report says.

Funding that prioritizes workers — and Canadian taxpayers — over executives 

The institute’s second principle calls for requirements for all companies that receive financial support to make climate-risk disclosures. 

Executive bonuses or salary increases should be prohibited until loans are paid back or, in instances when companies receive grants, until the economy recovers, the group says. This ties into their third principle: prioritize workers. 

“Any recovery efforts must be done with the health and safety of workers as a top concern and should endeavour to reduce inequality, create good quality and well-paid jobs, and maximize employment,” the report says.

For workers in emissions-intensive industries, financial support should be tied to re-training opportunities to help prepare workers for the green economy.

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How can stimulus spending address inequality?

Importantly, the recommendations go beyond measures aimed at simply reducing greenhouse gas emissions. Financial support, the authors say, must be tied to efforts that address social inequity and improve well-being.

“COVID-19 and climate change are both magnifiers for deep inequities that exist in our society that must be meaningfully addressed if we are to build back better,” the report says. 

Specifically, the group calls for Canada to fully implement the United Nations Declaration on the Rights of Indigenous Peoples, noting that “the COVID-19, climate and biodiversity crises illustrate the continued impacts of colonialism on Indigenous Peoples in Canada, who continue to be chronically underfunded.” 

The report also calls for recovery measures that consider the disproportionate effects the pandemic has had on women.

“Green jobs include not only jobs in the energy and manufacturing sectors but also jobs in the care and service economies and those that support broader social goals,” it says.

Public transit, bike lanes and clean electricity

Infrastructure funding should be directed toward clean electricity, public transit and creating bikeable and walkable communities rather than highways or airport upgrades, the report argues. The authors are also calling for support for innovative start-ups.

The institute says stimulus programs must mandate a commitment to transparency and accountability. 

“This should include a list of funding recipients and amounts provided, and information on what conditions have been applied,” the report says. 

Large companies that don’t meet their conditions should face repercussions, the authors suggest, positing that businesses “could have their loans converted to equity.”

Alongside efforts to attach “green strings” to financial support, the institute recommends the federal government simultaneously strengthen existing environmental and climate policies and regulations.