MacDonald Laurier Institute
Bureaucrats should not be arbiters of our online world

From the Macdonald Laurier Institute
By Leonid Sirota and Mark Mancini
When it comes to regulating the internet, Ottawa tells Canadians to simply “trust the experts.”
The federal government has pursued a far-reaching internet regulation agenda. This includes the Online Streaming Act (previously known as Bill C-11) and the Online News Act (previously known as Bill C-18). Both are ostensibly designed to force foreign online platforms – streaming ones such as Netflix, Disney+, and YouTube in the former case, Google and Facebook in the latter – to provide support, mainly but not exclusively financial, to Canadian cultural and journalistic producers. The most recent addition to this regulatory programme, Bill C-63, partly targets online platforms too, but its reach is broader. It seeks to prevent a range of “online harms” – from the distribution of child pornography to hate speech.
These legislative endeavours have attracted commentary from all corners, not least from Macdonald-Laurier Institute experts. Much of the discussion has been critical of the government’s policies on the ground of their unwisdom, immorality, and possible unconstitutionality.
But we would like to take a different tack here and focus not on the ends pursued but the means employed by C-11, C-18, and C-63: the empowerment of administrative agencies as rule-makers and arbiters of Canadians’ online world. While they purport to regulate new technologies, business models, and cultural forms, these policies are a throwback to an old philosophy of government that subverts fundamental constitutional principles: democracy, the separation of powers, and the rule of law.
It is worth beginning with a brief restatement of what these principles mean. Democracy means the exercise of political power – law-making, in particular – by either the people themselves or, more commonly, through elected representatives. The separation of powers means that the making and execution of laws are different functions, not to be confused or conflated, and that adjudication of disputes in accordance with the law is a separate function still. The rule of law is a complex idea, but perhaps the pithiest formulation of its core meaning belongs to economist and political philosopher F.A. Hayek: it “means that government in all its actions is bound by rules … which make it possible to foresee how the authority will use its coercive powers in given circumstances.”
Contrast this with the philosophy underpinning the government’s approach to internet regulation. This philosophy permeated the report of a panel commissioned by the federal government at the end of the last decade to propose reforms to Canada’s regulation of the internet. Published in January 2020, “Canada’s Communications Future: Time to Act” called for legislation that would “provide sufficient guidance to assist the [Canadian Radio-Telecommunications Commission (CRTC)] in the discharge of its duties, but sufficient flexibility for it to operate independently in deciding how to implement sector policy. To achieve this, legislative statements of policy should set out broadly framed objectives and should not be overly prescriptive.” Translation: the democratically elected Parliament should not bother with making actual rules; that would be the job of the bureaucrats at the CRTC. They know better – both what the rules should be and how to apply them. Parliament is their enabler, not their master, and the courts should defer to their judgments.
In fairness, the legislation ultimately enacted or considered by Parliament does not go quite as far in empowering the CRTC or a new Digital Safety Commission (DSC) at the expense of Parliament as that report had urged. But it does go far. Probably the most important example of this concerns the amenability of user content – the average TikTok video, rather than Netflix – to CRTC regulation. This was one of the major points of contention when Bill C-11 was before Parliament. The Bill itself – despite claims by the government to the contrary – quite clearly permitted the CRTC to regulate user content, though it did not require it to do so. Amendments to remove this discretionary power were roundly rejected at the government’s insistence, in favour of leaving the user content question open for decision by the CRTC – only for the government to issue a Policy Direction to the CRTC “not to impose regulatory requirements” on user content.
The real scope of the law, and hence the degree of its impact on the freedom of expression of ordinary Canadians, will thus be fleshed out through the interplay of policy directions from Cabinet and CRTC consultations and orders. The same goes for various other aspects of the Online Streaming Act, such as Canadian content and discoverability requirements to be imposed on online platforms. The Online News Act, had it functioned as intended, would similarly have given the CRTC the final say over the extent of the obligations of the platforms subject to it. (In reality, one of these two platforms instead banned the publication of news content, and to avoid the other doing the same thing, the government made a deal with it that eviscerated the act.) And under Bill C-63, the decisions as to whether an online platform’s policies are “adequate to mitigate the risk that users … will be exposed to harmful content” is similarly within the remit of the DSC, with little if any guidance from Parliament as to what is in fact required.
This way of doing things undermines parliamentary democracy as anyone, except some scholars of administrative law would understand it. The people elected to make laws do not, in fact, make them in any meaningful way. On the contrary, they pawn off responsibility for contentious policy choices to administrators; they enact no more than empty shells, politely described as “framework legislation,” full of blanks to be filled out later. This transgression against constitutional principle is compounded when Cabinet makes a mockery of the parliamentary process with its policy flip-flops, which can then be reversed by further Cabinet fiat. The excuse typically given for this dereliction of duty is that the problems to be addressed are too complex for parliamentarians to deal with, which only makes one wonder at their nerve to have put themselves forward to do a job they are concededly unqualified for in the first place.
Enthusiasts for the internet agenda may say that it remedies its democratic deficiencies by consulting with those subject to new registration requirements. Yet CRTC consultations on the Online Streaming Act provided no more than a shabby ersatz of what democracy is supposed to mean – debate and discussion in Parliament. The submission period was short, and “industry-focused.” The CRTC ended up issuing orders requiring registration on a range of internet services that meet a $10 million revenue threshold, and the government issued a policy direction to the CRTC instructing that user content not be regulated. The CRTC’s regulatory plan for the Online Streaming Act is still being developed, and will likely involve further decisions about the reach of registration requirements. Whether the DSC does any better – if and when it implements Bill C-63 – remains to be seen. But, in any case, consultations that only include industry players, or some nominal number of users, cannot replicate an engaged and informed Parliament that weighs competing interests. Nor can it replace an engaged and informed citizenry, holding politicians to account for their choices at the ballot box.
Separation of powers fares no better. Instead of Parliament making laws, independent prosecutors bringing charges, and independent courts ruling on them, the CRTC and DSC combine their broad rule-making powers with the ability to both jawbone and outright prosecute online platforms, and to rule on the charges. The Canadian Civil Liberties Association rightly laments “the vast authority bestowed upon” the DSC “to interpret the law, make up new rules, enforce them, and then serve as judge, jury, and executioner.”
Here again, proponents of administrative power think they have an answer. Instead of the old-fashioned institutions wielding divided powers, they say the modern world requires the government’s full authority to be concentrated in the hands of experts. Agencies like the CRTC and, presumably, the DSC have the skills and wisdom to deal with the complex and increasingly difficult online environment. This claim is attractive in part because the layman often cannot comprehend the size and scale of challenges that modern regulation confronts, while politicians are all too often happy to demonstrate their unseriousness and ignorance.
But, in addition to its other problems, the vision of expert administrators who know better is simply unwarranted by the facts. For example, Konrad von Finckenstein, former chair of the CRTC, has told a Senate committee studying Bill C-11 that the CRTC simply does not normally deal with matters of this nature; and that the CRTC will likely need to hire contractors to fulfil its mandate under the legislation. The CRTC is also, by its own admission, not really up to speed when it comes to the universe of online media it is required to regulate under the Online Streaming Act: it has invoked the need to gather information about podcasting to justify its far-reaching registration requirements for platforms that host them. As for the DSC, it will of course be an entirely new bureaucratic structure with no existing expertise at all. Perhaps the government will appoint experts to it. But it doesn’t have to. Bill C-63 imposes no requirements as to the qualifications of the DSC’s members other than their being Canadian citizens or permanent residents. Under the Canadian Radio-television and Telecommunications Commission Act, the same is also true of the CRTC.
Over-reliance on administrative regulation and enforcement undermines the rule of law too, by making the rules applicable to the internet uncertain and their application unpredictable. The legislation relies on vague terms that will only be fleshed out as the agencies that apply it go along, which will discourage innovation, chill expression, and incentivize platforms to take quick action against their users to avoid getting into trouble with the regulators. And if the victims of unfavourable rulings want to challenge them in actual courts, the Supreme Court’s precedents prevent judges from coming to their own independent assessment of what the law requires, but instead require them to yield to the bureaucrats’ interpretations unless these are not “merely” mistaken, but outright unreasonable. Even the requirements of the Canadian Charter of Rights and Freedoms are dissolved in this bureaucratic acid; from the supreme law of Canada, they are diluted into values that must, to be sure, be taken into account, but only as a factor among others.
All this may seem like legalistic pedantry propounded by academics who do not care about the pressing needs of contemporary society. But that impression would be mistaken. It is precisely the government’s disregard for Canada’s constitutional foundations that ultimately ensures that the rules produced for it by its administrative instrumentalities are out of touch.
Instead of legislation reflecting Canada’s public opinion as represented in Parliament, we are to be governed by rules drafted by unrepresentative bureaucrats, potentially influenced by special interest groups with a privileged access to them. Instead of the exercise of coercive power being channelled through institutions with limited remits keeping one another accountable, we are told to trust experts who cheerfully admit having no real expertise to speak of. And instead of the law being predictably and impartially applied by judges who are not invested in the government’s policy and do not depend on government goodwill for reappointment, the law, and the constitution itself, only count insofar as they are consistent with administrative need.
It may be that we are stuck with the administrative state. Although some scholars have made arguments to the contrary, we believe that, as a matter of law, Parliament is entitled to delegate very considerable policy-making powers to agencies such as the CRTC and the DSC. If the government is set on pursuing its regulatory agenda through the old-fashioned means of creating and empowering bureaucratic structures, the courts will not save us, even though, as we have argued elsewhere, they have become rather more skeptical of the administrative state’s claim to be the solution to all the problems of the modern world than they used to be until fairly recently.
But the government having the authority to do something does not mean that doing it would be a good idea. It, and we the citizens, should embrace the judiciary’s skepticism of the vision of government-by-administrator that characterizes the federal government’s plans. More to the point, we should recall what our most important constitutional principles mean. If we are not to erode them, we need to reject the means the government is proposing to employ, as well as, arguably, the ends it is pursuing.
Leonid Sirota is Senior Fellow with the Macdonald-Laurier Institute, and an Associate Professor in the School of Law at the University of Reading, in the United Kingdom, where he teaches public law. His research interests include the rule of law, constitutional interpretation, administrative law, the freedoms of conscience and expression, election law, and other aspects of Canadian and comparative public law.
Mark Mancini, a Senior Fellow with the Macdonald-Laurier Institute, is a Ph.D. candidate at the University of British Columbia, Peter A. Allard School of Law. He holds a J.D. from the University of New Brunswick, Faculty of Law, and an LL.M. from the University of Chicago Law School.
Alberta
‘Far too serious for such uninformed, careless journalism’: Complaint filed against Globe and Mail article challenging Alberta’s gender surgery law

Macdonald Laurier Institute challenges Globe article on gender medicine
The complaint, now endorsed by 41 physicians, was filed in response to an article about Alberta’s law restricting gender surgery and hormones for minors.
On June 9, the Macdonald-Laurier Institute submitted a formal complaint to The Globe and Mail regarding its May 29 Morning Update by Danielle Groen, which reported on the Canadian Medical Association’s legal challenge to Alberta’s Bill 26.
Written by MLI Senior Fellow Mia Hughes and signed by 34 Canadian medical professionals at the time of submission to the Globe, the complaint stated that the Morning Update was misleading, ideologically slanted, and in violation the Globe’s own editorial standards of accuracy, fairness, and balance. It objected to the article’s repetition of discredited claims—that puberty blockers are reversible, that they “buy time to think,” and that denying access could lead to suicide—all assertions that have been thoroughly debunked in recent years.
Given the article’s reliance on the World Professional Association for Transgender Health (WPATH), the complaint detailed the collapse of WPATH’s credibility, citing unsealed discovery documents from an Alabama court case and the Cass Review’s conclusion that WPATH’s guidelines—and those based on them—lack developmental rigour. It also noted the newsletter’s failure to mention the growing international shift away from paediatric medical transition in countries such as the UK, Sweden, and Finland. MLI called for the article to be corrected and urged the Globe to uphold its commitment to balanced, evidence-based journalism on this critical issue.
On June 18, Globe and Mail Standards Editor Sandra Martin responded, defending the article as a brief summary that provided a variety of links to offer further context. However, the three Globe and Mail news stories linked to in the article likewise lacked the necessary balance and context. Martin also pointed to a Canadian Paediatric Society (CPS) statement linked to in the newsletter. She argued it provided “sufficient context and qualification”—despite the fact that the CPS itself relies on WPATH’s discredited guidelines. Notwithstanding, Martin claimed the article met editorial standards and that brevity justified the lack of balance.
MLI responded that brevity does not excuse misinformation, particularly on a matter as serious as paediatric medical care, and reiterated the need for the Globe to address the scientific inaccuracies directly. MLI again called for the article to be corrected and for the unsupported suicide claim to be removed. As of this writing, the Globe has not responded.
Letter of complaint
June 9, 2025
To: The Globe and Mail
Attn: Sandra Martin, standards editor
CC: Caroline Alphonso, health editor; Mark Iype, deputy national editor and Alberta bureau chief
To the editors;
Your May 29 Morning Update: The Politics of Care by Danielle Groen, covering the Canadian Medical Association’s legal challenge to Alberta’s Bill 26, was misleading and ideologically slanted. It is journalistically irresponsible to report on contested medical claims as undisputed fact.
This issue is far too serious for such uninformed, careless journalism lacking vital perspectives and scientific context. At stake is the health and future of vulnerable children, and your reporting risks misleading parents into consenting to irreversible interventions based on misinformation.
According to The Globe and Mail’s own Journalistic Principles outlined in its Editorial Code of Conduct, the credibility of your reporting rests on “solid research, clear, intelligent writing, and maintaining a reputation for honesty, accuracy, fairness, balance and transparency.” Moreover, your principles go on to state that The Globe will “seek to provide reasonable accounts of competing views in any controversy.” The May 29 update violated these principles. There is, as I will show, a widely available body of scientific information that directly contests the claims and perspectives presented in your article. Yet this information is completely absent from your reporting.
The collapse of WPATH’s credibility
The article’s claim that Alberta’s law “falls well outside established medical practice” and could pose the “greatest threat” to transgender youth is both false and inflammatory. There is no global medical consensus on how to treat gender-distressed young people. In fact, in North America, guidelines are based on the Standards of Care developed by the World Professional Association for Transgender Health (WPATH)—an organization now indisputably shown to place ideology above evidence.
For example, in a U.S. legal case over Alabama’s youth transition ban, WPATH was forced to disclose over two million internal emails. These revealed the organization commissioned independent evidence reviews for its latest Standards of Care (SOC8)—then suppressed those reviews when they found overwhelmingly low-quality evidence. Yet WPATH proceeded to publish the SOC8 as if it were evidence-based. This is not science. It is fraudulent and unethical conduct.
These emails also showed Admiral Rachel Levine—then-assistant secretary for Health in the Biden administration—pressured WPATH to remove all lower age recommendations from the guidelines—not on scientific grounds, but to avoid undermining ongoing legal cases at the state level. This is politics, not sound medical practice.
The U.K.’s Cass Review, a major multi-year investigation, included a systematic review of the guidelines in gender medicine. A systematic review is considered the gold standard because it assesses and synthesizes all the available research in a field, thereby reducing bias and providing a large comprehensive set of data upon which to reach findings. The systematic review of gender medicine guidelines concluded that WPATH’s standards of care “lack developmental rigour” and should not be used as a basis for clinical practice. The Cass Review also exposed citation laundering where medical associations endlessly recycled weak evidence across interlocking guidelines to fabricate a false consensus. This led Cass to suggest that “the circularity of this approach may explain why there has been an apparent consensus on key areas of practice despite the evidence being poor.”
Countries like Sweden, Finland, and the U.K. have now abandoned WPATH and limited or halted medicalized youth transitions in favour of a therapy-first approach. In Norway, UKOM, an independent government health agency, has made similar recommendations. This shows the direction of global practice is moving away from WPATH’s medicalized approach—not toward it. As part of any serious effort to “provide reasonable accounts of competing views,” your reporting should acknowledge these developments.
Any journalist who cites WPATH as a credible authority on paediatric gender medicine—especially in the absence of contextualizing or competing views—signals a lack of due diligence and a fundamental misunderstanding of the field. It demonstrates that either no independent research was undertaken, or it was ignored despite your editorial standards.
Puberty blockers don’t ‘buy time’ and are not reversible
Your article repeats a widely debunked claim: that puberty blockers are a harmless pause to allow young people time to explore their identity. In fact, studies have consistently shown that between 98 per cent and 100 per cent of children placed on puberty blockers go on to take cross-sex hormones. Before puberty blockers, most children desisted and reconciled with their birth sex during or after puberty. Now, virtually none do.
This strongly suggests that blocking puberty in fact prevents the natural resolution of gender distress. Therefore, the most accurate and up-to-date understanding is that puberty blockers function not as a pause, but as the first step in a treatment continuum involving irreversible cross-sex hormones. Indeed, a 2022 paper found that while puberty suppression had been “justified by claims that it was reversible … these claims are increasingly implausible.” Again, adherence to the Globe’s own editorial guidelines would require, at minimum, the acknowledgement of the above findings alongside the claims your May 29 article makes.
Moreover, it is categorically false to describe puberty blockers as “completely reversible.” Besides locking youth into a pathway of further medicalization, puberty blockers pose serious physical risks: loss of bone density, impaired sexual development, stunted fertility, and psychosocial harm from being developmentally out of sync with peers. There are no long-term safety studies. These drugs are being prescribed to children despite glaring gaps in our understanding of their long-term effects.
Given the Globe’s stated editorial commitment to principles such as “accuracy,” the crucial information from the studies linked above should be provided in any article discussing puberty blockers. At a bare minimum, in adherence to the Globe’s commitment to “balance,” this information should be included alongside the contentious and disputed claims the article makes that these treatments are reversible.
No proof of suicide prevention
The most irresponsible and dangerous claim in your article is that denying access to puberty blockers could lead to “depression, self-harm and suicide.” There is no robust evidence supporting this transition-or-suicide narrative, and in fact, the findings of the highest-quality study conducted to date found no evidence that puberty suppression reduces suicide risk.
Suicide is complex and attributing it to a single cause is not only false—it violates all established suicide reporting guidelines. Sensationalized claims like this risk creating contagion effects and fuelling panic. In the public interest, reporting on the topic of suicide must be held to the most rigorous standards, and provide the most high-quality and accurate information.
Euphemism hides medical harm
Your use of euphemistic language obscures the extreme nature of the medical interventions being performed in gender clinics. Calling double mastectomies for teenage girls “paediatric breast surgeries for gender-affirming reasons” sanitizes the medically unnecessary removal of a child’s healthy organs. Referring to phalloplasty and vaginoplasty as “gender-affirming surgeries on lower body parts” conceals the fact that these are extreme operations involving permanent disfigurement, high complication rates, and often requiring multiple revisions.
Honest journalism should not hide these facts behind comforting language. Your reporting denies youth, their parents, and the general public the necessary information to understand the nature of these interventions. Members of the general public rely greatly on the news media to equip them with such information, and your own editorial standards claim you will fulfill this core responsibility.
Your responsibility to the public
As a flagship Canadian news outlet, your responsibility is not to amplify activist messaging, but to report the truth with integrity. On a subject as medically and ethically fraught as paediatric gender medicine, accuracy is not optional. The public depends on you to scrutinize claims, not echo ideology. Parents may make irreversible decisions on behalf of their children based on the narratives you promote. When reporting is false or ideologically distorted, the cost is measured in real-world harm to some of our society’s most vulnerable young people.
I encourage the Globe and Mail to publish an updated version on this article in order to correct the public record with the relevant information discussed above, and to modify your reporting practices on this matter going forward—by meeting your own journalistic standards—so that the public receives balanced, correct, and reliable information on this vital topic.
Trustworthy journalism is a cornerstone of public health—and on the issue of paediatric gender medicine, the stakes could not be higher.
Sincerely,
Mia Hughes
Senior Fellow, Macdonald-Laurier Institute
Author of The WPATH Files
The following 41 physicians have signed to endorse this letter:
Dr. Mike Ackermann, MD
Dr. Duncan Veasey, Psy MD
Dr. Rick Gibson, MD
Dr. Benjamin Turner, MD, FRCSC
Dr. J.N. Mahy, MD, FRCSC, FACS
Dr. Khai T. Phan, MD, CCFP
Dr. Martha Fulford, MD
Dr. J. Edward Les, MD, FRCPC
Dr. Darrell Palmer, MD, FRCPC
Dr. Jane Cassie, MD, FRCPC
Dr. David Lowen, MD, FCFP
Dr. Shawn Whatley, MD, FCFP (EM)
Dr. David Zitner, MD
Dr. Leonora Regenstreif, MD, CCFP(AM), FCFP
Dr. Gregory Chan, MD
Dr. Alanna Fitzpatrick, MD, FRCSC
Dr. Chris Millburn, MD, CCFP
Dr. Julie Curwin, MD, FRCPC
Dr. Roy Eappen, MD, MDCM, FRCP (c)
Dr. York N. Hsiang, MD, FRCSC
Dr. Dion Davidson, MD, FRCSC, FACS
Dr. Kevin Sclater, MD, CCFP (PC)
Dr. Theresa Szezepaniak, MB, ChB, DRCOG
Dr. Sofia Bayfield, MD, CCFP
Dr. Elizabeth Henry, MD, CCFP
Dr. Stephen Malthouse, MD
Dr. Darrell Hamm, MD, CCFP
Dr. Dale Classen, MD, FRCSC
Dr. Adam T. Gorner, MD, CCFP
Dr. Wesley B. Steed, MD
Dr. Timothy Ehmann, MD, FRCPC
Dr. Ryan Torrie, MD
Dr. Zachary Heinricks, MD, CCFP
Dr. Jessica Shintani, MD, CCFP
Dr. Mark D’Souza, MD, CCFP(EM), FCFP*
Dr. Joanne Sinai, MD, FRCPC*
Dr. Jane Batt, MD*
Dr. Brent McGrath, MD, FRCPC*
Dr. Leslie MacMillan MD FRCPC (emeritus)*
Dr. Ian Mitchell, MD, FRCPC*
Dr. John Cunnington, MD
*Indicates physician who signed following the letter’s June 9 submission to the Globe and Mail, but in advance of this letter being published on the MLI website.
Alberta
High costs, low returns – Canada’s wildly expensive emissions cap

In this new commentary, Director of Energy, Natural Resources, and Environment Heather Exner-Pirot reveals why the Canadian government’s oil and gas emissions cap isn’t just expensive – it’s economic insanity.
Canada is the world’s third-largest exporter of oil, fourth-largest producer, and top source of imports to the United States. Much of Canada’s oil wealth is concentrated in the oil sands in northern Alberta, which hosts 99 percent of the country’s enormous oil endowment: about 160 billion barrels of proven reserves, of a total resource of approximately 1.8 trillion barrels. This is the major source of oil to the United States refinery complex, a large part of which is optimized for the oil sands’ heavy oil.
Reliability of energy supply has remerged as a major geopolitical issue. Canadian oil and gas is an essential component of North American energy security. Yet a proposed cap on emissions from the sectors promises to cut Canadian production and exports in the years ahead. It would be hard to provide less environmental benefit for a higher economic and security cost. There are far better ways to reduce emissions while maintaining North America’s security of energy supply.
The high cost of the cap
In 1994 a Liberal federal government, Alberta provincial conservative government and representatives from the oil and gas industry, working together through the national oil sands task force, developed A New Energy Vision for Canada. Their efforts turned what was then a middling resource into a trillion dollar nation-building project. Production has increased tenfold since the report came out.
The task force acknowledged the need for industry to “put its best efforts toward … reducing greenhouse gas emissions.” However, it also expected governments to “understand” that there “is no benefit to Canada or to the environment to have production and value-added processing done outside of the country in less efficient jurisdictions … policies set by regulator must not result in discouraging oil sands production.”
As part of its efforts to meet its climate goals under the Paris Accord, the Canadian government proposed a regulatory framework for an emissions cap on the oil and gas sector in December 2023. It set a legally binding limit on greenhouse gas emissions, targeting a 35 to 38 percent reduction from 2019 levels by 2030 for upstream operations, through regulations to be made under the Canadian Environmental Protection Act, 1999 (CEPA).
The federal government has not yet finalized its proposed regulations. However, industry experts and economists have criticized the current iteration as logistically unworkable, overly expensive, and likely to be challenged as unconstitutional. In effect, this policy layers a cap-and-trade system for just one sector (oil and gas) on top of a competing carbon pricing mechanism (the large-emitter trading systems, often referred to as the industrial carbon price), a discriminatory practice that also undermines the entire economic rationale of a carbon pricing system.
While the Canadian government has maintained that it is focused on reducing emissions rather than production – the latter of which would put it at odds with provincial jurisdiction over non-renewable resources – a series of third party analyses as well as the Parliamentary Budget Office’s own impact assessment find it would indeed constrain Canadian oil and gas production. The economic cost of the emissions cap far exceeds any corresponding benefit in reduced emissions.
How much will the emissions cap cost in terms of dollar per tonne of carbon in avoided emissions, both domestically and globally? Based solely on the cost to the Canadian economy, we estimate the emission cap is equivalent to a C$2,887/tonne carbon price by 2032.
Assuming no impact on global demand and full substitution by non-Canadian crudes, it finds that the cost of each tonne of carbon displaced globally is between C$96,000 to C$289,000 for oil sands bitumen production. For displaced Canadian conventional and natural gas, the cost is infinite, i.e. global emissions would actually be higher for every barrel or unit of Canadian oil and gas displaced with competitor products as a result of the emissions cap.
Canadian oil and gas emissions reduction efforts
The oil and gas sector is the highest emitting economic sector in Canada. However, it has made substantial efforts to reduce emissions over the past two decades and is succeeding. Absolute emissions in the sector peaked in 2014, despite production growing by over a million barrels of oil equivalent since (see Figure 1).
Figure 1 Indexed greenhouse gas (GHG) emissions (and gross domestic product (GDP) at basic prices, for the oil and gas extraction industry, 2009 to 2022 (2009 = 100). Source: Statistics Canada 2024.
Much of this success can be attributed to methane capture, particularly in the natural gas and conventional oil sectors, where absolute emissions peaked in 2007 and 2014 respectively.
Since 2014, the oil sands have dramatically increased production by over a million barrels per day, but at the same time have reduced the emissions per barrel every year, leaving the absolute emissions of the oil and gas sector relatively flat. The oil sands are performing well vis-à-vis their international peers, seeing their emissions per barrel decline by 30 percent since 2013, compared to 21 percent for global majors and 34 percent for US E&Ps (exploration and production companies) (see Figure 2).
Figure 2 Indexed Oil Sands GHG relative intensity trend (2013=100). Source: BMO Capital Markets, “I Want What You Got: Canada’s Oil Resource Advantage,” April 2025
On an emissions intensity absolute basis, the oil sands have significantly outperformed their peers, shaving off 25kg/barrel of emissions since 2013 (see Figure 3) and more than 65kg/barrel since the oil sands task force wrote their report in 1994.
As emissions improvements from methane reductions plateau, the oil sands are likely to outperform their conventional peers in emissions per barrel reductions going forward. The sector is working on strategies such as solvent extraction and carbon capture and storage that, if implemented, would reduce the life-cycle emissions per barrel of oil sands to levels at or below the global crude average.
Figure 3 Emissions intensity absolute change (kg CO2e/bbl) (2013–24E) Source: BMO Capital Markets, 2025
The high cost of the cap
Several parties have analyzed the proposed emissions cap to determine its economic and production impact. The results of the assessments vary widely. For the purposes of this commentary we rely on the federal Office of the Parliamentary Budget Officer (PBO), which published its analysis of the proposed emissions cap in March 2025. Helpfully, the PBO provided a table summarizing the main findings of the various analyses (see Table 1).
The PBO found that the required reduction in upstream oil and gas sector production levels under an emissions cap would lower real gross domestic product (GDP) in Canada by 0.33 percent in 2030 and 0.39 percent in 2032, and reduce nominal GDP by C$20.5 billion by 2032. The PBO further estimated that achieving the legal upper bound would reduce economy-wide employment in Canada by 40,300 jobs and full-time equivalents by 54,400 in 2032.
Table 2 Comparison of estimated impacts of the proposed emissions cap in 2030. Source: PBO 2025
However, the PBO does not estimate the carbon price per tonne of emissions reduced. This is a useful metric as Canadians have become broadly familiar with the real-world impacts of a price on carbon. The federal government quashed the consumer carbon price at $80/tonne in March 2025, ahead of the federal election, due to its unpopularity and perceived impacts on affordability. The federal carbon pricing benchmark is scheduled to hit C$170 in 2030. ECCC has quantified the damages of a tonne of carbon dioxide – referred to as the “Social Cost of Carbon” – as C$294/tonne.
Based on PBO assumptions that the emissions cap will reduce emissions by 7.1MT and reduce GDP by $20.5 billion in 2032, the implied carbon price is C$2,887/tonne.
Emissions cap impact in a global context
Even this eye-popping figure does not tell the full story. The Canadian oil and gas production that must be withdrawn to meet the requirements of the emissions cap will be replaced in global markets from other producers; there is no reason to assume the emissions cap will affect global demand.
Based on life-cycle GHG emissions of the sample of crudes used in the US refinery complex, Canadian oil sands produce only 1 to 3 percent higher emissions than a global average[1] (see Figure 4), with some facilities producing lower emissions than the average barrel.
Figure 4 Life Cycle GHG emissions of crude oils (kg CO2e/bbl). Source: BMO Capital Markets 2025
As such, the emissions cap, if applied just to oil sands production, would only displace global emissions of 71,000 to 213,000 tonnes (1 to 3 percent of 7.1MT). At a cost of C$20.5 billion for those global emissions reductions, the price of carbon is equivalent to C$96,000 to C$289,000 per tonne (see Figure 5).
Figure 5 Cost per tonne of emissions cap behind domestic carbon all (left) and post-global crude substitution (right)
For any displaced conventional Canadian crude oil or natural gas, the situation becomes absurd. Because Canadian conventional oil and natural gas have a lower emissions intensity than global averages, global product substitutions resulting from the emissions cap would actually serve to increase global emissions, resulting in an infinite price per tonne of carbon.
The C$100k/tonne carbon price estimate is probably low
We believe our assessment of the effective carbon price of the emissions cap at C$96,000+/tonne to be conservative for the following reasons.
First, it assumes Canadian heavy oil will be displaced in global markets by an average, archetypal crude. In fact, it would be displaced by other heavy crudes from places like Venezuela, Mexico, and Iraq (see Figure 4), which have higher average emissions per barrel than Canadian oil sands crudes. In such a circumstance, global emissions would actually rise and the price per carbon tonne from an emissions cap on oil sands production would also effectively be infinite.
Secondly, emissions cap impact assumptions by the PBO are likely conservative. Those by ECCC, based on a particular scenario outlook, are already outdated. ECCC assumed a production loss of only 0.7 percent by 2030, with oil sands production hitting approximately 3.7 million barrels (MMbbls) per day of bitumen production in 2030. According to S&P Global analysis, that level is likely to be hit this year.[2]
S&P further forecasts oil sands production to reach 4.0 MMbbls by 2030, or about 300,000 barrels more than it produces today. This would represent a far lower production growth rate than the oil sands have experienced in the past five years. But assuming the S&P forecast is correct, production would need to decline in the oil sands by 8 percent to meet the emissions cap requirements. PBO assumed only a 5.4 percent overall oil and gas production loss and ECCC assumed only 0.7 percent, while Conference Board of Canada assumed an 11.1 percent loss and Deloitte assumed 11.5 percent (see Table 1). Production numbers to date more closely align with Conference Board of Canada and Deloitte projections.
Let’s make the Canadian oil and gas sector better, not smaller
The Canadian oil and gas sector, and in particular the oil sands, has a responsibility to do their part to reduce emissions while maintaining competitive businesses that can support good Canadian jobs, provide government revenues and diversify exports. The oil sands sector has re-invested for decades in continuous improvements to drive down production costs while improving its emissions per barrel.
It is hard to conceive of a more expensive and divisive way to reduce emissions from the sector and from the Canadian economy than the proposed emissions cap. Other expensive programs, such as Norway’s EV subsidies, the United Kingdom’s offshore wind contracts-for-difference, Germany’s Energiewende feed-in-tariffs and surcharges, and US Inflation Reduction Act investment tax credits, don’t come close to the high costs of the emissions cap on a price-per-tonne of carbon abated basis.
The emissions cap, as currently proposed, will make Canada’s oil and gas sector significantly less competitive, harm investment, and undermine Canada’s vision to be an energy superpower. This policy will also reduce the oil and gas sector’s capacity to invest in technologies that drive additional emission reductions, such as solvents and carbon capture, especially in our current lower price environment. As such it is more likely to undermine climate action than support it.
The federal and provincial governments have come together to advance a vision for Canadian energy in the past. In this moment, they have the opportunity once again to find real solutions to the climate challenge while harnessing the energy sector to advance Canada’s economic well-being, productivity, and global energy security.
About the author
Heather Exner-Pirot is Director of Energy, Natural Resources, and Environment at the Macdonald-Laurier Institute.
-
Business18 hours ago
Most Canadians say retaliatory tariffs on American goods contribute to raising the price of essential goods at home
-
National1 day ago
Women and girls beauty pageant urges dismissal of transgender human rights complaint
-
Alberta18 hours ago
Cross-Canada NGL corridor will stretch from B.C. to Ontario
-
International2 days ago
Support for the Ukraine war continues because no one elected is actually in charge.
-
Business2 days ago
Trump slaps Brazil with tariffs over social media censorship
-
Business2 days ago
CBC six-figure salaries soar
-
Business19 hours ago
B.C. premier wants a private pipeline—here’s how you make that happen
-
Addictions2 days ago
Can addiction be predicted—and prevented?