The latest fad here in Canada is the so-called “Just Transition” in which Justin Trudeau’s government, determined to add to its already long list of failed policy schemes, intends to socially engineer the transition of the Alberta workforce out of high-paying skilled jobs in oil and gas production into low-paid and largely imaginary jobs in the ‘clean economy’. But don’t think they haven’t been thinking through the coming challenges. Natural Resources Minister Jonathan Wilkinson, who will table a “Just transition” bill in 2023, cautions “I do not believe that the challenge we are going to face is that there are workers who are displaced that will not find other good-paying jobs. I am actually quite worried that there are so many opportunities … we will not have enough workers to fill the jobs.” So there, you doubters. Of course if what he says were true it would mean the government doesn’t have to force the process to happen, the market would take care of everything. But what he is saying isn’t the least bit true. We’d call it wishful thinking if there was any evidence that thinking had played a role.
What’s essential here is not the politics of a spat between Canada’s federal government and that of Alberta. It’s that those in charge in Ottawa, who have presided over a series of economic debacles from runaway debt to runaway inflation to runaway public sector salaries with remarkable insouciance, think there is nothing complicated or difficult about revamping the entire economy. They have learned nothing from the last half-decade in power, the last half-century on industrial policy, or the last century on central planning. Nothing.
A federal briefing note for Wilkinson, Key Messages on Just Transition, indicates that there will be massive implications for at least 13.5% of the workforce, which is an underestimate because whatever has a huge impact on agriculture, manufacturing, building and transportation, the four sectors identified as most affected, will certainly have knock-on effects for others. And it contains this callous throwaway line: “Some green jobs will not require workers with green skills to perform their jobs, i.e. janitor or driver working for a solar energy company.”
Great. You go from being a highly-paid rig operator to a janitor and are meant to feel that justice as well as prosperity have been enhanced. But why think it would work? Why believe you could just, on the back of an envelope or with a single legislative document, change the careers and output of more than one in eight workers in a gigantic central planning spasm and have it all work?
As former Liberal MP turned “Gas price wizard” Dan McTeague recently Tweeted, “The carbon/climate fixation has: – caused inflation/ – devalued the Loonie/ – reduced capital inflows into Canada/ – helped drive up global energy price/ – ensured a rise in coal use/ – raised national debt”. But none of these actual results of their actions have dented their confidence that, if they just go at it harder, they’ll create price stability, strengthen the dollar, attract investment, get rid of coal and pay off the debt.
Nigel Hannaford raised similar objections, saying:
“If Ottawa wants to take energy workers earning $150,000 a year and put them into jobs earning less than half that, you could call the transition a lot of things. But certainly not any word that means fair, equitable – or just.”
As he adds, the plan will hit Alberta workers especially hard. But “Nationally, oil and gas means directly and indirectly nearly 600,000 jobs to Canada. And more than a third of them are outside Alberta.” However the main point is that it’s not working, or doing anything that reminds you of a thing that is working:
“over the last seven years, Mr. Trudeau has been killing pipelines, chasing tankers away from the West Coast (but not the East), using regulations to make it more expensive for oil and gas producers to operate and putting potentially valuable exploration lands out of reach in national parks.”
Rex Murphy was even less impressed, writing that:
“Well, that’s one way to start the New Year. Send out a second-tier minister, working in concert with another second-tier minister, Seamus O’Regan, and an NDP consort, Charlie Angus, to announce a peremptory, arbitrary, unnegotiated shutdown of a greatly productive province’s principal industry.”
Harsh. But fair, because it is easier to destroy than create, something all practical people know all too well. Unfortunately those we have entrusted with power do not seem to know it, so they are undaunted by this unbroken record of failure.
Even on small things they’ve done badly. Don Braid pointed out in the Edmonton Journal that:
“Past efforts to help transition workers, from the Newfoundland and Labrador fishery crisis to the shift away from coal-fired electricity, proved that Ottawa has had no workable plans, provided few useful benefits, and revealed both chaotic disorganization and appalling bureaucratic lassitude.”
Despite which, rather than backing down, they’re just warming up, so to speak. This “transition”, from people who in most cases have never even run a corner store, involves entirely overhauling labour markets, energy markets, manufacturing and transportation in a massive modern economy and have everything work better. And not just economically. You also get social justice. And colder weather which you will like or else. But how do they plan to do it?
Seriously. How, for instance, do they think Gosplan attempted to work similar wonders with the dramatically less complicated Russian/Soviet economy and, at the risk of raising awkward questions, what flaws in its approach do they think led to the scorched-earth disaster of the actual Soviet economy rather than the one Stalin intended and many western economists hallucinated? Do they have any idea what the actual central planning process even looked like at a technical level, let alone why it failed? (And at least Gosplan worked with imaginary quantities of real things like steel; a plan whose matrix inputs include imaginary things like efficient biofuels is fantasy squared.)
Such an approach makes merely banning gas stoves, overhauling haute cuisine, look like the work of timid amateurs. And it comes, perhaps unsurprisingly, from a Prime Minister who, never having run anything except a famously inept ministry, thinks he can run them all while they switch to unproven product lines in harmonious diversity, equity and inclusion. While flunking basic accounting: he appears genuinely to believe that his carbon tax gives people back more than it takes, no matter how often qualified expert opinion says otherwise.
If we had one wish in economics, it would be to have every concerned citizen read Leonard Read’s “I, Pencil” on the mind-boggling complexity of making a humble, prosaic lead pencil even before there were microchips. And then send it to their legislative representative, and the head of their executive branch. Because the degree of ignorance and arrogance in believing one can redo an entire economy, and a society, and a world, is mind-boggling. Including conjuring into existence whatever technology is needed, from solar-driven hydrogen to massive efficient batteries to an entire grid able to power your electric car, electric stove and electric furnace.