Alberta
Federal emissions plan will cost Albertans dearly
A new report finds every Albertan will have $3,300 less for essentials if the ineffective federal emissions reduction plan is left in place.
For years, the federal government has been targeting net zero by 2050 and putting in place an aggressive approach to reduce emissions as outlined in its Emissions Reduction Plan. This scheme, which included the carbon tax, emissions cap, electricity regulations and other initiatives, has drawn strong criticism from provinces, industry, business groups and Canadians.
A report by the Conference Board of Canada, commissioned by Alberta’s government, sheds new light on the negative impacts of the federal government’s punitive environmental approach. By 2050, Alberta’s GDP will shrink by 11 per cent, employment will decline by four per cent and the average person will have $3,300 less in disposable income – while Canada still misses its emissions target.
Alberta’s government is calling on the next federal government to permanently abandon the carbon tax, emissions cap and the entire flawed federal approach. Instead, the federal government should focus on reducing emissions without hurting the economy or making life harder for Albertan and Canadian families.
“These findings should send a message to whoever ends up being the next federal government. Our province remains firmly committed to protecting the environment and creating a future for our children, but that can’t be achieved by trampling on Canadians’ livelihoods. Ottawa has offered nothing but penalties and vague rhetoric. Instead of meaningful incentives to reduce emissions, we get carbon taxes, a production cap, and layers and layers of costly regulations, all burdening families and workers who are already stretched thin.”
The Conference Board of Canada assessed how Alberta businesses and consumers will react to the federal policies based on the costs and effectiveness of the technologies necessary to meet the federal targets.
It found that Alberta will be disproportionately impacted by the current federal plan, experiencing a deep recession in 2030 and subsequently slower economic growth going forward. According to the report, compared to the 2050 baseline scenario, Alberta’s GDP, jobs, revenue and incomes will significantly decline because of federal emissions policies:
- GDP: Projected to be 11 per cent lower
- Employment: Projected to be 4.1 per cent lower
- Government revenues: Projected to be 9.3 per cent lower
- Real (price adjusted) incomes: Down $3,300 (or 7.3 per cent) per person
Nationally, real GDP in Canada is estimated to fall 3.8 per cent in 2050. Canadian oil and gas production in 2050 would be 37 per cent lower, mostly due to the proposed federal oil and gas production cap.
On March 12, the independent Parliamentary Budget Officer (PBO) – following on reports from S&P Global, Deloitte Canada and the Conference Board of Canada – released a scathing report outlining the negative impacts of the proposed federal oil and gas emissions cap. According to the report, the PBO estimates that the federal government’s cap alone will in fact slash oil and gas production by almost 5 per cent, all while these required production cuts reduce nominal GDP by $20.5 billion in 2032.
The PBO report also suggests this policy will reduce economy-wide employment in Canada by 40,300 jobs and full-time equivalents by 54,400 in 2032.
Alberta’s government continues to call for the next federal government to focus on policies that grow the economy, while working with provinces and respecting the Canadian constitution.
Quick facts:
- The Conference Board of Canada scenarios assume oil and gas production grow to 9.7 million barrels of oil equivalent in 2050 with peak oil production of 9.9 million barrels per day in 2042, reflecting continued global oil demand.
- Canada’s employment is estimated to be 2.6 per cent lower, consumer prices 2.5 per cent higher, and real GDP 3.8 per cent lower in 2050 under the federal plan (compared to the baseline scenario).
- According to the report, Canada’s electricity sector would need to reduce emissions by 376 per cent below baseline in 2050, through significant investment in carbon capture and storage, to meet the federal net-zero commitment.
- The Conference Board of Canada’s realistic scenario assumes carbon capture and storage (CCS) will be deployed at a slower rate than is generally assumed by the federal government.
- Canada’s Emission Reduction Plan, released in March 2022, is a roadmap and its policies include the carbon tax, Clean Electricity Regulation, Clean Fuel Regulation, federal oil and gas emissions cap, methane reduction targets, zero emission vehicle mandates, and various other subsidy programs.
- The Conference Board of Canada’s report on assessing the impact of the federal Emissions Reduction Plan was completed prior to U.S. President Donald Trump’s administration and does not include the impacts of potential U.S. tariffs.
- U.S. tariffs have further illustrated the importance of market access to Canada’s energy security.
Related information
Below are my updated charts through April 2025 along with the cumulative data starting in October 2024. As you can see, central and southern Alberta are trending quite dry, while the north appears to be faring much better. However, even there, the devil is in the details. For instance, in Grande Prairie the overall precipitation level appears to be “normal”, yet in April it was bone dry and talking with someone who was recently there, they described it as a dust bowl. In short, some rainfall would be helpful. These next 3 months are fairly critical.
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From the Fraser Institute
After the Smith government recently announced its shift to a new approach for funding hospitals, known as “activity-based funding” (ABF), defenders of the status quo in Alberta were quick to argue ABF will not improve health care in the province. Their claims are simply incorrect. In reality, based on the experiences of other better-performing universal health-care systems, ABF will help reduce wait times for Alberta patients and provide better value-for-money for taxpayers.
First, it’s important to understand Alberta is not breaking new ground with this approach. Other developed countries shifted to the ABF model starting in the early 1990s.
Indeed, after years of paying their hospitals a lump-sum annual budget for surgical care (like Alberta currently), other countries with universal health care recognized this form of payment encouraged hospitals to deliver fewer services by turning each patient into a cost to be minimized. The shift to ABF, which compensates hospitals for the actual services they provide, flips the script—hospitals in these countries now see patients as a source of revenue.
In fact, in many universal health-care countries, these reforms began so long ago that some are now on their second or even third generation of ABF, incorporating further innovations to encourage an even greater focus on quality.
For example, in Sweden in the early 1990s, counties that embraced ABF enjoyed a potential cost savings of 13 per cent over non-reforming counties that stuck with budgets. In Stockholm, one study measured an 11 per cent increase in hospital activity overall alongside a 1 per cent decrease in costs following the introduction of ABF. Moreover, according to the study, ABF did not reduce access for older patients or patients with more complex conditions. In England, the shift to ABF in the early to mid-2000s helped increase hospital activity and reduce the cost of care per patient, also without negatively affecting quality of care.
Multi-national studies on the shift to ABF have repeatedly shown increases in the volume of care provided, reduced costs per admission, and (perhaps most importantly for Albertans) shorter wait times. Studies have also shown ABF may lead to improved quality and access to advanced medical technology for patients.
Clearly, the naysayers who claim that ABF is some sort of new or untested reform, or that Albertans are heading down an unknown path with unmanageable and unexpected risks, are at the very least uninformed.
And what of those theoretical drawbacks?
Some critics claim that ABF may encourage faster discharges of patients to reduce costs. But they fail to note this theoretical drawback also exists under the current system where discharging higher-cost patients earlier can reduce the drain on hospital budgets. And crucially, other countries have implemented policies to prevent these types of theoretical drawbacks under ABF, which can inform Alberta’s approach from the start.
Critics also argue that competition between private clinics, or even between clinics and hospitals, is somehow a bad thing. But all of the developed world’s top performing universal health-care systems, with the best outcomes and shortest wait times, include a blend of both public and private care. No one has done it with the naysayers’ fixation on government provision.
And finally, some critics claim that, under ABF, private clinics will simply focus on less-complex procedures for less-complex patients to achieve greater profit, leaving public hospitals to perform more complex and thus costly surgeries. But in fact, private clinics alleviate pressure on the public system, allowing hospitals to dedicate their sophisticated resources to complex cases. To be sure, the government must ensure that complex procedures—no matter where they are performed—must always receive appropriate levels of funding and similarly that less-complex procedures are also appropriately funded. But again, the vast and lengthy experience with ABF in other universal health-care countries can help inform Alberta’s approach, which could then serve as an example for other provinces.
Alberta’s health-care system simply does not deliver for patients, with its painfully long wait times and poor access to physicians and services—despite its massive price tag. With its planned shift to activity-based funding, the province has embarked on a path to better health care, despite any false claims from the naysayers. Now it’s crucial for the Smith government to learn from the experiences of others and get this critical reform right.
Nadeem Esmail
Senior Fellow, Fraser Institute
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