Ottawa’s emissions cap will impose massive costs with virtually no benefit

From the Fraser Institute

The resulting reduction in global GHG emissions would amount to a mere four-tenths of one per cent (i.e. 0.004 per cent) with virtually no impact on the climate or any detectable environmental, health or safety benefits.

Last year, when the Trudeau government said it would cap greenhouse gas emissions (GHG) from the oil and gas sector at 35 to 38 per cent below 2019 levels by 2030, it claimed the cap will not affect oil and gas production.

But a report by Deloitte, a leading audit and consulting firm, found that the cap (which would go into effect in 2026) will in fact curtail production, destroy jobs and cost the Canadian economy billions of dollars. Under Trudeau’s cap, Canada must curtail oil production by 626,000 barrels per day by 2030 or by approximately 10.0 per cent of the expected production—and curtail gas production by approximately 12.0 per cent.

According to the report’s estimates, Alberta will be hit hardest, with 3.6 per cent less investment, almost 70,000 fewer jobs, and a 4.5 per cent decrease in the province’s economic output (i.e. GDP) by 2040. Ontario will lose more than 15,000 jobs and $2.3 billion from its economy by 2040. And Quebec will lose more than 3,000 jobs and $0.4 billion from its economy during the same period.

Overall, the whole country will experience an economic loss equivalent to 1.0 per cent of GDP, translating into lower wages, the loss of nearly 113,000 jobs and a 1.3 per cent reduction in government tax revenues. Canada’s real GDP growth in 2023 was a paltry 1.1 per cent, so a 1 per cent reduction would be a significant economic loss.

Deloitte’s findings echo previous studies on the effects of Ottawa’s cap. According to a recent economic analysis by the Conference Board of Canada, the cap could reduce Canada’s GDP by up to $1 trillion between 2030 and 2040, eliminate up to 151,000 jobs by 2030, reduce federal government revenue by up to $151 billion between 2030 and 2040, and reduce Alberta government revenue by up to $127 billion over the same period.

Similarly, another recent study published by the Fraser Institute found that an emissions cap on the oil and gas sector would inevitably reduce production and exports, leading to at least $45 billion in lost economic activity in 2030 alone, accompanied by a substantial drop in government revenue.

Crucially, the huge economic cost to Canadians will come without any discernable environmental benefits. Even if Canada were to entirely shut down its oil and gas sector by 2030, thus eliminating all GHG emissions from the sector, the resulting reduction in global GHG emissions would amount to a mere four-tenths of one per cent (i.e. 0.004 per cent) with virtually no impact on the climate or any detectable environmental, health or safety benefits.

Given the sustained demand for fossil fuels, constraining oil and gas production and exports in Canada would merely shift production to other regions, potentially to countries with lower environmental and human rights standards such as Iran, Russia and Venezuela.

The Trudeau government’s proposed GHG cap will severely damage Canada’s economy for virtually no environmental benefit. The government should scrap the cap and prioritize the economic wellbeing of Canadians over policies that only bring pain with no gain.

Authors:

Julio Mejía

Policy Analyst

Elmira Aliakbari

Director, Natural Resource Studies, Fraser Institute

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“Poilievre is providing significant tax relief for people working hard to make ends meet,” said Franco Terrazzano, CTF Federal Director. “The best way the government can make life more affordable is to let people keep more of their own money and Poilievre’s tax cut would do just that.”

Today, Poilievre announced he would cut the lowest income tax bracket from 15 to 12.75 per cent. Poilievre estimates this would save a two-income family up to $1,800.

“We will free up money for this tax cut by eliminating waste, cutting bureaucracy and consultants and capping spending with a dollar-for-dollar law,” Poilievre said.

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News release from The Coalition of Concerned Manufacturers and Businesses of Canada

“Trump Endorses Carney, Poilievre Endorses Canada”

The Coalition of Concerned Manufacturers and Businesses of Canada (CCMBC) strongly supports the election of Pierre Poilievre as the next Prime Minister of Canada. CCMBC President Catherine Swift stated “Canadian business has been undermined for 10 years by the post-national, anti-business Liberal agenda, and the ability of our members to create well-paying jobs has been seriously impaired. Mark Carney, who has been a key advisor to the Trudeau Liberals for years, will continue this destructive approach.”

International Monetary Fund data show Canada has had the worst growth per capita among developed nations for the last decade, directly as a result of Liberal government policies. Many analysts are referring to this period as Canada’s lost decade, which will merely be extended by a Carney-led government. Swift added “We have never seen any concern for the small- and medium-sized business (SME) community, which represents half of Canada’s GDP, from Carney. His globalist policies only involve large crony capitalists and top-down regulatory overload to the detriment of SMEs.”

It is not surprising that US President Trump recently stated that he would prefer to deal with a Liberal Prime Minister, as Trump would prefer the weaker economy the Liberals have created and which will continue under Carney’s anti-free market agenda. Poilievre has committed to unleashing Canada’s resource wealth and eliminating the industrial carbon tax, essential elements for a Canadian economic revival. Swift concluded “Where Trump endorses Carney, Pierre Poilievre endorses Canada. We firmly believe a Poilievre government will build a stronger Canada, where businesses can succeed and Canadians thrive. This is why we are endorsing Pierre Poilievre for Prime Minister.”

The CCMBC was formed in 2016 with a mandate to advocate for proactive and innovative policies that are conducive to manufacturing and business retention and safeguarding job growth in Canada.

www.ccmbc.ca