2.3 – Issues for Early Action
WD can provide briefings on a broad range of subjects in the coming weeks and months; however, early Ministerial engagement on the following issues could aid in their advancement.
Intergovernmental Relations
Issue
The Minister responsible for WD is mandated to “lead and coordinate the efforts of the Government of Canada to establish cooperative relationships with the provinces constituting western Canada, business, labour and other public and private organizations for the development and diversification of the economy of Western Canada.”1 The diverse range of priorities across western provinces means a one-size-fits-all approach to this mandate does not work.
[Redacted]
Background
- The western provinces each have distinct economies and diverse priorities. As a result, each province has a different perspective on issues such as the Trans Mountain Pipeline expansion, interprovincial trade, and equalization payments.
- Despite significant contributions to the national economy, western provinces feel their economic contributions are not valued by the federal government. According to a survey from the Environics Institute, for the first time, a majority of people polled in Alberta and Saskatchewan agreed that “Western Canada gets so few benefits from being part of Canada that they might as well go it on their own.”2
- When the West feels as if their perspectives are not taken into account, trust in the federal government falters and alienation grows. This is magnified when the issue is tied to western economic drivers, such as oil and gas.
Manitoba Métis Federation
- The Manitoba Métis Federation (MMF) is the democratically elected, self-governing organization for the Manitoba Métis Community. The MMF has a keen interest in economic development for Métis people in Manitoba.
[Redacted]
Economic Transition in Calgary
Issue
Due to the global low-carbon energy transition, consistently low oil prices, and local frustration with boom and bust cycles, Calgary is adjusting to structural changes to its economy by developing emerging industries. Calgary is also expanding its capacity to be an innovation hub. WD is uniquely positioned among federal departments to play a role on-the-ground in supporting this transition.
[Redacted]
Background
- As the corporate center of Alberta’s oil and gas industry, Calgary is significantly affected by the downturn in oil prices:
- the Conference Board of Canada forecasts economic growth, which usually averages 3.1%, will be 1.5% in 2019;3
- unemployment in the city was 7.3% in August 2019, compared to 5.7% nationally;4 and,
- downtown office vacancies sit at 24.4%.5
- Industry concerns persist around market access and competitiveness issues critical to the success of the oil and gas sector and, by association, Calgary’s economic health. These concerns have been exacerbated by federal policy and regulatory action such as the implementation of Bills C-69 and C-48.
- Diversification efforts are ongoing at all levels. Several business accelerators and incubators have been established through collaboration between post-secondary institutions, industry, government, and civil society.
- In an effort to diversify, Calgary Economic Development’s (CED’s) municipal economic strategy, Calgary in the New Economy, emphasizes the importance of talent and business attraction, innovation, and livability. WD is a member of the leadership and implementation team for this strategy, giving the department an opportunity to identify areas for collaboration with Grow West: The Western Canada Growth Strategy.
- Calgary has established strengths in energy, clean technology, and agri-business. Building on these strengths, Calgary has leveraged local expertise to become a clean resources hub. The Clean Resources Innovation Network (CRIN) brings together stakeholders to help Canada become a global leader in clean hydrocarbon energy production.
- WD provided CRIN with $450,000 to provide interim support prior to the approval of a Government of Canada investment of $100 million over four years.
- This cluster of activity is possible because of the deep knowledge in innovative technologies such as Steam Assisted Gravity Drainage and Carbon Capture Utilization and Storage, among others.
- The city is also expanding its digital and creative industries, life sciences, and financial services. Calgary’s workforce has the skills to succeed in alternative careers such as software development and data analytics, but some reskilling is required.
- WD has invested over $48 million in Calgary’s economic growth and diversification since January 2017. This includes priority areas such as advanced manufacturing ($14 million), digital technology ($10.5 million), and life sciences ($7 million).
Arctic Gateway Initiative
Northern Manitoba is well-positioned to play a role in securing sovereignty in Canada’s Arctic region. There are also critical infrastructure needs for northern transportation and trade.The Arctic Gateway Group Limited Partnership (AGG) has a vision to expand the Hudson Bay Rail line and Port of Churchill to position northern Manitoba as a trade and transportation hub. Expansion will increase the flow of goods, which will create jobs and skills-training opportunities, increase trade, and lower the cost of goods and services northern communities rely on.
[Redacted]
Background
- The 2017 Hudson Bay Rail line washouts in northern Manitoba made national news. Nearly 30,000 people from First Nations and other remote communities in northern Manitoba were negatively impacted, including families physically separated for over a year, job losses, and increased cost of living.
- WD brokered the purchase of the Hudson Bay Rail line and Port of Churchill by the AGG, a unique partnership of industry, community, and northern First Nations. WD, on behalf of the Government of Canada, also provided $127 million in grants and contributions to AGG to support the acquisition and repairs of the rail line, which were completed in 2018.
- [Redacted] These investments provide the foundation for future development of the Port of Churchill to realize AGG’s Arctic Gateway vision.
- Budget 2019 approved $400 million for arctic and northern-focused projects under Transport Canada’s National Trade Corridors Fund, which will expand current eligibility to include Churchill. These funds are pending Treasury Board approval, but present an opportunity for AGG to secure additional investment in the Port of Churchill. [Redacted]
- The only land access to Churchill is by rail. The re-introduction of rail transportation as an alternative to air transportation will significantly reduce the cost of food, fuel, and other goods going to northern Manitoba. In 2017, the cost of providing heating fuel to Churchill was $6 million, with the Government of Canada covering $5.4 million.
- Prospects of mineral wealth and ice-free summer months (which will allow increased shipping) in the arctic is causing geopolitical tensions between Canada, China, and Russia.
- China and Russia are proactively investing billions upgrading military bases, conducting land surveys, and planning for future transportation infrastructure. Due to climate change, investments will continue to intensify and outpace Canada’s progress, threatening our nation’s sovereignty.
Southern Mountain Caribou conservation
Issue
Industrial activities, such as forestry, oil and gas exploration, mining, and recreational activities, have degraded and fragmented the habitat of southern mountain caribou in BC and Alberta. These impacts to the landscape are making it easier for predators to hunt caribou. As a result, caribou populations are shrinking. Proposed conservation measures will result in job and profit loss in industries on which communities rely.
[Redacted]
Background
- In 2003, southern mountain caribou were listed as ‘threatened’ under the Species at Risk Act (SARA), which means measures must be taken to reverse the factors causing population decline. Federal and provincial recovery efforts to this effect have been ongoing for more than a decade.
- The day-to-day management of species like southern mountain caribou is primarily a matter of provincial/territorial jurisdiction. The federal government is responsible for caribou conservation on federal lands (e.g. national parks), the general administration of SARA, and has certain responsibilities when provincial/territorial protection measures are not enough.
- In May 2018, the Minister of Environment announced southern mountain caribou face ‘imminent threats to recovery’. This announcement requires the Minister of Environment to recommend an emergency protection order for the species.
- An emergency protection order, which can vary in scope, gives the federal government control over the management of industrial activities not normally under the federal government’s jurisdiction in the areas where it applies. In BC and Alberta, this could include control over activities such as forestry, mining, energy sectors, and backcountry recreation (e.g. snowmobiling). Stopping these activities could contribute to job losses and profit reductions at companies in rural communities that depend on these sectors for their livelihood.
- The Minister of Environment can, however, present alternate conservation options alongside the emergency protection order. To this end, the federal government is working with BC, Alberta, and Indigenous groups to develop collaborative recovery approaches that do not halt all economic activity.
- Work to date by federal and provincial governments in partnership with two First Nations has resulted in three draft conservation agreements: 1) a bilateral agreement with BC; 2) a bilateral agreement with Alberta; and 3) a Partnership Agreement with BC and the Saulteau and West Moberly First Nations. Together, these agreements would have lower economic impact on communities and potentially reduce the costs to the federal and provincial governments. Alberta launched public consultation on its agreement in fall 2019; BC’s consultation process was completed in June 2019.
Challenges in the BC Forestry Sector
Issue
BC’s forestry sector is facing production curtailments and mill closures across the province, impacting approximately 140 communities that rely on the sector.6 Provincial estimates note up to 5,900 workers have been affected thus far.7 Forestry workers continue to raise their concerns in the media about the economic outlook for the sector and are seeking continued support from all levels of government. WD has provided incremental funding to forestry-reliant communities in the past, on behalf of the federal government. The department is monitoring the issue’s progression in case it is asked to do so again.
[Redacted]
Background
- The sector’s challenges stem from several factors, including the ongoing softwood lumber dispute with the US; a 45% drop in lumber prices since May 2018;8 and, reduced timber supply because of the mountain pine beetle infestation and severe wildfire seasons in 2017 and 2018.
- In June 2017, Canada announced the Softwood Lumber Action Plan, which provided $867 million to support the companies and workers dependent on the softwood lumber industry. The plan included programs delivered by a number of federal departments, not including Regional Development Agencies.
- On September 17, 2019, the BC government announced $69 million to support impacted forest workers in several BC Interior communities. These measures include funding for early retirement bridging; short-term forest employment focused on fire prevention and community resiliency; access to skills training; and, a new job placement coordination office. However, this initiative does not provide support to self-employed contractors in the supply chain, nor to local businesses affected by mill closures.
Canada Coal Transition Initiative
Issue
Budget 2019 announced $150 million in funding over five years beginning in 2020 ($105 million for WD; $45 million for the Atlantic Canada Opportunities Agency) to help address infrastructure needs in communities impacted by the Government of Canada’s 2018 announcement to phase out coal-fired electricity by 2030. Treasury Board approval is needed to access these funds.
[Redacted]
Background
- In 2018, the Government of Canada introduced regulations to phase out coal-fired electricity by 2030 as part of the Pan-Canadian Framework on Clean Growth and Climate Change. This phase-out means up to 3,900 workers in Alberta, Saskatchewan, Nova Scotia, and New Brunswick could lose their jobs.9 The majority of affected workers are in Alberta and Saskatchewan.
- Budget 2018 announced $35 million over five years ($25 million for WD and $10 million for the ACOA) to assist workers and communities affected by the coal phase-out to transition their skills and economies. Fifteen projects have been approved with this funding: eight in Alberta and seven in Saskatchewan. WD continues to allocate the remaining funds.
- The Task Force on the Just Transition for Canadian Coal Power Workers and Communities (2018), established by the Minister of Environment, provided recommendations on adapting to this transition. One recommendation included support for infrastructure needs in affected communities.
- In addition to the $150 million for infrastructure, Budget 2019 also identified Natural Resources Canada as the new lead for the Government of Canada’s just transition efforts.
- On August 1, 2019, the Minister of Natural Resources met with coal-affected communities in Alberta to discuss potential approaches. WD met with affected communities in Saskatchewan for a similar discussion. The meetings garnered community support for the initiative.
Forks North Portage Partnership
In place-based or place-making economic development, rather than creating new spaces and assets from scratch, a community’s existing assets and uniqueness can be leveraged to attract new investment and improve social wellbeing. A key organization dedicated to place-making in downtown Winnipeg is the Forks North Portage Partnership (FNPP), which acts as a catalyst, encouraging activities for people in downtown Winnipeg through partnerships and revitalization strategies. Continued support for FNPP will facilitate ongoing development of the Forks, a major tourist attraction in downtown Winnipeg; and economic development of North Portage, an area of downtown that has struggled to attract business activity.
[Redacted]
Background
- FNPP is a not-for-profit development corporation that manages the public sites of the Forks and North Portage. Canada, the Province of Manitoba, and the City of Winnipeg are equal shareholders in FNPP. No shareholder directly owns any of FNPP’s assets, which include land and parking under Portage Place Shopping Centre.
- The Minister responsible for WD is the Government of Canada shareholder in FNPP. In this capacity, the Minister must:
- appoint the chairperson of the FNPP Board of Directors alongside Manitoba and Winnipeg;
- nominate three directors to represent Canada on FNPP’s Board of Directors;
- consent to major changes in FNPP’s assets, articles, and by-laws;
- approve FNPP’s 10-year strategic development plans; and,
- participate in FNPP announcements.
- One example of a major change in FNPP’s assets that has involved the Minister is the pending sale of the land and parking assets under Portage Place Shopping Centre.
- Portage Place Shopping Centre, an urban mall located in North Portage and owned by Vancouver-based Peterson Group, was constructed over 30 years ago. It was originally intended to be a key development to revitalize downtown Winnipeg. However, it did not attract the intended economic activity to be successful.
- As a result, the Peterson Group is selling the mall. Since FNPP owns the land and parking under the mall, they are working with the Peterson Group to sell the mall, land, and parking as one package. A potential buyer has been identified who plans to redevelop Portage Place, which could revitalize the area and stimulate further economic development. The sale is expected to close in early January 2020, but this timeline is subject to change, depending on the due diligence requirements of the buyer.
- Consent for the sale has already been provided by the Minister responsible for WD. However, if the terms of the sale are altered or cancelled, then the shareholders of FNPP, including the Minister responsible for WD, may be required to act immediately to approve changes or come up with an alternate plan.
[Redacted]
Footnotes
1 The Western Economic Diversification Act
2 Confederation of Tomorrow 2019 Survey of Canadians. 2019. Environics Institute.
3 Metropolitan Outlook 1: Calgary- Spring 2019. Conference Board of Canada.
4 Ibid.
5 Avison Young Global Office Market Report: Mid-Year 2019. 2019. Avison Young.
6 Smart Future: A path forward for BC’s forest products industry. 2019. Council of Forest Industries.
7 Twice laid off due to sawmill closures, B.C. worker ready for new career. Sept. 2019. The Canadian Press.
8 US Lumber and Panel Market Report- August 16, 2019. Global Wood.
9 A Just and Fair Transition for Canadian Coal Power Workers and Communities December 2018. Task Force on Just Transition.
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