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Economy

Latest dire predictions about Carney’s emissions cap

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5 minute read

From the Fraser Institute

By Kenneth P. Green

According to a new report from the Parliamentary Budget Officer (PBO), the federal government’s proposed oil and gas emissions cap will curtail production, cost a not-so-small fortune and kill a lot of jobs. This news will surprise absolutely no one who’s been paying attention to Ottawa’s regulatory crusade against greenhouse gases over the past few years.

To be precise, according to the PBO’s report of March 2025, under the proposed cap, production for upstream industry oil and gas subsectors must be reduced by 4.9 per cent relative to their projected baseline levels out to 2030/32. Further, required reduction in upstream oil and gas sector production levels will lower GDP (inflation-adjusted) in Canada by an estimated 0.39 per cent in 2032 and reduce nominal GDP by $20.5 billion. And achieving the legal upper bound will reduce economy-wide employment in Canada by an estimated 40,300 jobs and fulltime equivalents by 54,400 in 2032.

The federal government is contesting the PBO’s estimates, with Jonathan Wilkinson, federal minister of Energy and Natural Resources of Canada, claiming that the “PBO wasted their time and taxpayer dollars by analyzing a made up scenario.” Of course, one might observe that using “made up scenarios” is what making forecasts of regulatory costs is all about. No one, including the government, has a crystal ball that can show the future.

But the PBO’s projected costs are only the latest analysis. 2024 report by Deloitte (and commissioned by the federal Treasury Board) found that the proposed “cap results in a significant decline in GDP in Alberta and the Rest of Canada.” The main impacts of the cap are lower oil and gas activity and output, reduced employment, reduce income, lower returns on investment and a higher price of oil.

Consequently, according to the report, by 2040 Alberta’s GDP will be lower by 4.5 per cent and Canada’s GDP will be lower by 1 per cent compared to a no-cap baseline. Cumulatively over the 2030 to 2040 timeline, Deloitte estimated that real GDP in Alberta will be $191 billion lower, and real GDP in the Rest of Canada will be $91 billion lower compared to the no-cap (business as usual) baseline (in 2017 dollars). Employment also took a hit in the Deloitte report, which found the level of employment in 2040 will be lower by 2 per cent in Alberta and 0.5 per cent in the Rest of Canada compared to a no-cap baseline. Alberta will lose an estimated 55,000 jobs on average (35,000 in the Rest of Canada) between 2030 and 2040 under the cap.

Another 2024 report by the Conference Board of Canada estimated that the “oil and gas productions cuts forecasted lead to a one-time, permanent decline in total Canadian real GDP of between 0.9 per cent (most likely outcome) to 1.6 per cent (least likely outcome) relative to the baseline in 2030. This is equivalent to a loss of $22.8 to $40.4 billion (in 2012 dollars)… In Alberta, real GDP would fall by between $16.3 and $28.5 billion—or by 3.8 per cent and 6.7 per cent, respectively.”

Finally, a report by S&P Global Commodity Insights (and commissioned by the Canadian Association of Petroleum Producers) estimated that a “production cut driven by a stringent 40% emission cap could cause $75 billion lower upstream spend and $247 billion lower GDP contribution (vs. a no cap reference case).”

All of these estimates, by respected economic analysis firms, raise serious questions about the government’s own 2024 Regulatory Impact Analysis, which suggested that the proposed regulations will only have incremental impacts on the economy—namely, $3.3 billion (plus administrative costs to industry and the government, estimated to be $219 million). According to the analysis, the “proposed Regulations are expected to result in a net decrease in labour expenditure in the oil and gas sector of about 1.6% relative to the baseline estimate of employment income over the 2030 to 2032 time frame.”

But according to the new PBO report, the costs of the government’s proposed cap on greenhouse gas emission from Canada’s oil and gas sector will be costly and destructive to the sector, it’s primary province (Alberta), and its employees in Alberta and across Canada. All this in the face of likely-resurgent U.S. oil and gas production.

Now that policymakers in Ottawa have seemingly recognized the unpopularity of the consumer carbon tax, a good next step would be to scrap the cap.

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Alberta

Pierre Poilievre – Per Capita, Hardisty, Alberta Is the Most Important Little Town In Canada

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From Pierre Poilievre

The tiny town of Hardisty, Alberta (623 people) moves $90 billion in energy a year—that’s more than the GDP of some countries.

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Business

Why it’s time to repeal the oil tanker ban on B.C.’s north coast

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The Port of Prince Rupert on the north coast of British Columbia. Photo courtesy Prince Rupert Port Authority

From the Canadian Energy Centre

By Will Gibson

Moratorium does little to improve marine safety while sending the wrong message to energy investors

In 2019, Martha Hall Findlay, then-CEO of the Canada West Foundation, penned a strongly worded op-ed in the Globe and Mail calling the federal ban of oil tankers on B.C.’s northern coast “un-Canadian.”

Six years later, her opinion hasn’t changed.

“It was bad legislation and the government should get rid of it,” said Hall Findlay, now director of the University of Calgary’s School of Public Policy.

The moratorium, known as Bill C-48, banned vessels carrying more than 12,500 tonnes of oil from accessing northern B.C. ports.

Targeting products from one sector in one area does little to achieve the goal of overall improved marine transport safety, she said.

“There are risks associated with any kind of transportation with any goods, and not all of them are with oil tankers. All that singling out one part of one coast did was prevent more oil and gas from being produced that could be shipped off that coast,” she said.

Hall Findlay is a former Liberal MP who served as Suncor Energy’s chief sustainability officer before taking on her role at the University of Calgary.

She sees an opportunity to remove the tanker moratorium in light of changing attitudes about resource development across Canada and a new federal government that has publicly committed to delivering nation-building energy projects.

“There’s a greater recognition in large portions of the public across the country, not just Alberta and Saskatchewan, that Canada is too dependent on the United States as the only customer for our energy products,” she said.

“There are better alternatives to C-48, such as setting aside what are called Particularly Sensitive Sea Areas, which have been established in areas such as the Great Barrier Reef and the Galapagos Islands.”

The Business Council of British Columbia, which represents more than 200 companies, post-secondary institutions and industry associations, echoes Hall Findlay’s call for the tanker ban to be repealed.

“Comparable shipments face no such restrictions on the East Coast,” said Denise Mullen, the council’s director of environment, sustainability and Indigenous relations.

“This unfair treatment reinforces Canada’s over-reliance on the U.S. market, where Canadian oil is sold at a discount, by restricting access to Asia-Pacific markets.

“This results in billions in lost government revenues and reduced private investment at a time when our economy can least afford it.”

The ban on tanker traffic specifically in northern B.C. doesn’t make sense given Canada already has strong marine safety regulations in place, Mullen said.

Notably, completion of the Trans Mountain Pipeline expansion in 2024 also doubled marine spill response capacity on Canada’s West Coast. A $170 million investment added new equipment, personnel and response bases in the Salish Sea.

“The [C-48] moratorium adds little real protection while sending a damaging message to global investors,” she said.

“This undermines the confidence needed for long-term investment in critical trade-enabling infrastructure.”

Indigenous Resource Network executive director John Desjarlais senses there’s an openness to revisiting the issue for Indigenous communities.

“Sentiment has changed and evolved in the past six years,” he said.

“There are still concerns and trust that needs to be built. But there’s also a recognition that in addition to environmental impacts, [there are] consequences of not doing it in terms of an economic impact as well as the cascading socio-economic impacts.”

The ban effectively killed the proposed $16-billion Eagle Spirit project, an Indigenous-led pipeline that would have shipped oil from northern Alberta to a tidewater export terminal at Prince Rupert, B.C.

“When you have Indigenous participants who want to advance these projects, the moratorium needs to be revisited,” Desjarlais said.

He notes that in the six years since the tanker ban went into effect, there are growing partnerships between B.C. First Nations and the energy industry, including the Haisla Nation’s Cedar LNG project and the Nisga’a Nation’s Ksi Lisims LNG project.

This has deepened the trust that projects can mitigate risks while providing economic reconciliation and benefits to communities, Dejarlais said.

“Industry has come leaps and bounds in terms of working with First Nations,” he said.

“They are treating the rights of the communities they work with appropriately in terms of project risk and returns.”

Hall Findlay is cautiously optimistic that the tanker ban will be replaced by more appropriate legislation.

“I’m hoping that we see the revival of a federal government that brings pragmatism to governing the country,” she said.

“Repealing C-48 would be a sign of that happening.”

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