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Economy

Ruthless, reckless, damaging: the Hon. Steven Guilbeault is MLI’s Policy-maker of the year

Published

1 year ago

16 minute read

From the MacDonald Laurier Institute

By Heather Exner-Pirot

Guilbeault has treated the fact that Canada is a democracy, a market economy, and a federation as inconveniences to be overcome.

The Liberals have been chided for focusing on communications over substance, for announcing policies rather than implementing them. But there is an exception to this rule: the ruthlessly efficient Environment Minister Steven Guilbeault. No one else in Canada has been as influential, and, in my view, no one else has done so much damage.

From an emissions cap to toxic plastic straws, and from Clean Electricity Regulations to the Clean Fuel Standard, Guilbeault has been advancing economy-killing and constitution-defying laws at a frenzied pace.

He was appointed Minister of Environment and Climate Change Canada in October 2021. At the time of his appointment, Guilbeault appeared as the perfect villain: a caricature of the West-hating, anti-oil Liberal that has confounded the aspirations of Canadians west of the Laurentian corridor for decades. In the last two years he has disappointed few of his supporters and assuaged none of his critics’ fears.

Dubbed the “Green Jesus of Montreal” by La Presse, the 2001 image of Guilbeault being walked off in handcuffs in his faux orange prison jumpsuit emblazoned with the Greenpeace logo, following a CN Tower-scaling stunt to bring attention to climate change, features frequently in the social media accounts of his more outspoken critics.

The Canadian oil and gas sector has had a rough decade – from the shale revolution that flooded North America with cheap oil, to the COVID-19 pandemic – but it persisted. The sector achieved record breaking production, and royalties for governments, last year. The coming-into-service of TMX and CGL pipelines promises to grant additional export capacity for Canadian hydrocarbons.

But, like the final boss of a video game, Guilbeault is proving to be a formidable challenger to the country’s most important economic sector, even as the country struggles under declining productivity, persistent inflation and an affordability crisis. What Texas, Putin and OPEC could not undermine, Guilbeault is poised to do. This is intended as criticism but I expect Guilbeault would be pleased with the acknowledgment.

In this year alone he has advanced four sector-destroying policies, as part of the federal government’s much derided “pancake” approach to climate policy: stacking increasingly suffocating and incompatible regulations on Canadian industry to meet our Paris Accord commitments.

Carbon pricing schemes have broadly been accepted within heavy industry across Canada, if grudgingly. But with voters unwilling to accept a price per tonne of GHGs high enough to meaningfully address emissions, the Government has had to resort to additional, bespoke, mechanisms.

The Clean Fuel Regulations (CFR) came into effect on July 1, mandating reductions in the carbon intensity of transportation fuels through various methods, such as blending in biofuels. The Parliamentary Budget Officer found that the CFR are broadly regressive, impacting poorer households the most. The four Atlantic Premiers in particular contested the CFR on the grounds they would disproportionately hurt their residents, calling them “unfair and offensive to Atlantic Canadians” and demanding they be delayed. But Guilbeault blamed any price increase on refiners rather than his regulations, saying “there is simply no reason that they need to push costs onto consumers.”

While imploring refiners to decarbonize their product at a loss, Guilbeault also tacked on a ZEV (zero emissions vehicle) mandate to ensure any investments made in clean fuels today would have an ever-shrinking market and timeline to recoup costs. In other words, Guilbeault is asking refiners to invest in cleaner fuels while promising to ban their products before they could make back their money. The final regulations, mandating a 100 percent zero-emission vehicles sales target by 2035, were announced on December 19.

Such a move requires dramatically more capacity in the country’s electricity grid, up to 25% by some estimates. But, unbothered by the laws of physics, Guilbeault went ahead and introduced draft Clean Electricity Regulations (CER) in August. The CER will impose obligations on electricity generation to achieve net zero emissions in the grid by 2035 and will necessarily take large swathes of Canada’s existing generation capacity offline. In practice this means a phase out of coal, which is happening; and natural gas, which cannot realistically happen – particularly in the cold Prairie provinces of Alberta and Saskatchewan where hydroelectric generating capacity is limited, nuclear is years away, and intermittent wind and solar are unsuitable. The CER prompted Alberta Premier Danielle Smith to launch a national ad campaign protesting that “No one wants to freeze in the dark”.

More sober western voices have also warned against the CER. The CEO of SaskPower sent a letter  arguing that while the utility was “on track to meet our commitment to reduce GHG emissions by 50 per cent below 2005 levels by 2030”,  the CER are “not possible from technological, financial and logistical perspectives.” But Guilbeault has remained adamant that there will be no special carve outs for any province.

The crowning achievement of Guilbeault’s economy-destroying climate policies was announced on December 7: an emissions cap, and cut, on one sector only, Canadian oil and gas. The announcement was not made in downtown Calgary, amongst those most affected, but in Dubai at COP28. Such a cap is counterproductive, expensive, and both economically and politically self-sabotaging. There is no limit to the punishment Guilbeault is willing to impose on the energy sector, regardless of the collateral damage to the rest of the Canadian economy.

Guilbeault’s accomplishments do not end at stymying Canada’s upstream and downstream oil and gas sector. It’s been a fractious time for federal-provincial relations, and a challenging one for the Canadian Constitution. On a list that included Danielle’s Smith’s Alberta Sovereignty Act and Scot Moe’s Saskatchewan First Act; and invocations by Ontario, Quebec, and Saskatchewan of the notwithstanding clause; it was not one, but two of Minister Guilbeault’s laws that were declared unconstitutional by Canadian courts this year.

In the first instance, the Supreme Court of Canada determined the Impact Assessment Act – previously known as Bill C-69, or the No More Pipelines Act – to reach far beyond federal jurisdiction, granting Parliament “a practically untrammeled power to regulate projects qua projects, regardless of whether Parliament has jurisdiction to regulate a given physical activity in its entirety.” The vast majority of sections within the IAA were deemed unconstitutional.

Guilbeault doubled down, saying that the federal government would “course correct”, but that it would be unlikely to change the outcome of the IAA process for projects.

Just one month later, the Federal Court of Canada held that the federal government’s labelling of all Plastic Manufactured Items (PMI) as toxic was both unreasonable and unconstitutional. Again, Guilbeault was undeterred, and announced on December 8 that the federal government would appeal it.

It appears that, in Guilbeault’s view, federalism is an inconvenient and unacceptable barrier to accomplishing meaningful progress on climate change. For an ideologue like Guilbeault, the Constitution was not designed for, and is not up to the task of, addressing the existential threat posed by fossil fuels. But that is no reason not to try. He will continue to seek new avenues to restrain industry and the provinces; he will just have to tighten up the language.

No amount of tweaking will prevent the Clean Electricity Regulations and oil & gas emissions cap from facing challenges from Alberta and Saskatchewan. The federal government will rely on its criminal law power to see them through. He has suggested that violating the Clean Electricity Regulations, for example running coal fired plants beyond 2030, would be an offense under the Criminal Code. The joke in the Prairies is that he wants his western counterparts to have orange jumpsuits that match his own.

Guilbeault is seen as a true believer. His mission is to save the planet from climate change, and to save oil and gas producing apostates from themselves. Nothing will persuade him he should moderate his efforts. But I would be remiss not to point out that Guilbeault has shown the ability to tolerate pragmatism in his own Cabinet.

The first instance was with nuclear energy. Long a lightning rod for 20th century environmentalists, Guilbeault has historically been opposed to nuclear. In the Liberals’ Green Bond Framework, released in March 2022, nuclear energy was excluded alongside sin industries like tobacco & alcohol sales, arms manufacturing, gambling, and fossil fuels. After public opinion evolved, and in the face of successful nuclear refurbishments and new reactor developments in the GTA, the Liberal government reversed its decision. Guilbeault duly ate his humble pie, saying in April 2023 that:

“In the past I haven’t been the person who supported the most the development of nuclear energy. But when you look at what international experts like the International Energy Agency or the IPCC is saying, they’re saying, to prevent global temperatures from reaching 1.5 degrees Celsius, to achieve our carbon neutrality targets, we need this technology.”

This could not have been easy, and I applaud him for evolving his views in line with the evidence.

But he was not convinced enough to directly advocate for nuclear technology at COP28. On December 2, 2023 in Dubai, 22 states including Canada signed a landmark declaration committing to triple nuclear energy by 2050. Minister Guilbeault seemed to be everywhere at COP28; but he was not there for that announcement, missing the traditional ‘family photo’ of world leaders signing the nuclear declaration.

Likewise, Guilbeault had to accept with great reluctance the Liberals’ political gambit of exempting heating oil from carbon pricing. Their coalition must combine urban environmentalists and Atlantic Canadian townsfolk to win the next election. In the case of heating oil, the Atlantic caucus carried the day. But Guilbeault made clear it was a ploy not to be repeated, telling the Canadian Press in an interview on November 6th that he would not stand for any further concessions:

“As long as I’m the environment minister, there will be no more exemptions to carbon pricing…It’s certainly not ideal that we did it and in a perfect world we would not have to do that, but unfortunately we don’t live in a perfect world.”

Guilbeault is a threat to Canada’s prosperity, and to our allies’ too. Germany, Japan, Korea and others have come asking for more energy exports, only to be told there was no business case. The federal government’s own policies are making it so.

But more to the point his climate policies, committed though they may be, are destined to fail.

It is often said that if you want to go fast, go alone; but if you want to go far, go together.

Guilbeault is very far ahead from industry, the provinces, Canadians, and increasingly his own caucus. He is alienating voters who are concerned more about affordability and housing. There will likely be a backlash. As far as Guilbeault has swung the pendulum to the left, it will come swinging back at him and the Liberals the other way. The energy transition is a marathon, and Guilbeault is a sprinter.

One could almost admire Guilbeault’s unwavering commitment to his principles – his willingness to advance his goals in the face of criticism, resistance and alarm. But through his actions, Guilbeault has treated the fact that Canada is a democracy, a market economy, and a federation as inconveniences to be overcome.

Canadians that care about these things will find many reasons to be concerned with Guilbeault’s efforts this year. His impact on the nation’s politics and economy will be felt long after his policies have been overturned.

Heather Exner-Pirot is the director of energy, natural resources, and environment at the Macdonald-Laurier Institute.

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Bjorn Lomborg

How Canada Can Respond to Climate Change Smartly

Published on April 30, 2025

By

From the Fraser Institute

By Bjørn Lomborg

At a time when public finances are strained, and Canada and the world are facing many problems and threats, we need to consider policy choices carefully. On climate, we should spend smartly to solve it effectively, making sure there is enough money left over for all the other challenges.

A sensible response to climate change starts with telling it as it is. We are bombarded with doom-mongering that is too often just plain wrong. Climate change is a problem but it’s not the end of the world.

Yet the overheated rhetoric has convinced governments to spend taxpayer funds heavily on subsidizing current, inefficient solutions. In 2024, the world spent a record-setting CAD$3 trillion on the green energy transition. Taxpayers are directly and indirectly subsidizing millions of wind turbines and solar panels that do little for climate change but line the coffers of green energy companies.

We need to do better and invest more in the only realistic solution to climate change: low-carbon energy research and development. Studies indicate that every dollar invested in green R&D can prevent $11 in long-term climate damages, making it the most effective long-term global climate policy.

Throughout history, humanity has tackled major challenges not by imposing restrictions but by innovating and developing transformative technologies. We didn’t address 1950s air pollution in Los Angeles by banning cars but by creating the catalytic converter. We didn’t combat hunger by urging people to eat less, but through the 1960s Green Revolution that innovated high-yielding varieties to grow much more food.

In 1980, after the oil price shocks, the rich world spent more than 8 cents of every $100 of GDP on green R&D to find energy alternatives. As fossil fuels became cheap again, investment dropped. When climate concern grew, we forgot innovation and instead the focus shifted to subsidizing existing, ineffective solar and wind.

In 2015, governments promised to double green R&D spending by 2020, but did no such thing. By 2023, the rich world still wasn’t back to spending even 4 cents out of every $100 of GDP.

Globally, the rich world spends just CAD$35 billion on green R&D — one-hundredth of overall “green” spending. We should increase this four-fold to about $140 billion a year. Canada’s share would be less than $5 billion a year, less than a tenth of its 2024 CAD$50 billion energy transition spending.

This would allow us to accelerate green innovation and bring forward the day green becomes cheaper than fossil fuels. Breakthroughs are needed in many areas. Take nuclear power. Right now, it is way too expensive, largely because extensive regulations force the production of every new power plant into what essentially becomes a unique, eye-wateringly expensive, extravagant artwork.

The next generation of nuclear power would work on small, modular reactors that get type approval in the production stage and then get produced by the thousand at low cost. The merits of this approach are obvious: we don’t have a bureaucracy that, at a huge cost, certifies every consumer’s cellphone when it is bought. We don’t see every airport making ridiculously burdensome requirements for every newly built airplane. Instead, they both get type-approved and then mass-produced.

We should support the innovation of so-called fourth-generation nuclear power, because if Canadian innovation can make nuclear energy cheaper than fossil fuels, everyone in the world will be able to make the switch—not just rich, well-meaning Canadians, but China, India, and countries across Africa.

Of course, we don’t know if fourth-generation nuclear will work out. That is the nature of innovation. But with smarter spending on R&D, we can afford to focus on many potential technologies. We should consider investing in innovation to grow hydrogen production along with water purification, next-generation battery technology, growing algae on the ocean surface producing CO₂-free oil (a proposal from the decoder of the human genome, Craig Venter), CO₂ extraction, fusion, second-generation biofuels, and thousands of other potential areas.

We must stop believing that spending ever-more money subsidizing still-inefficient technology is going to be a major part of the climate solution. Telling voters across the world for many decades to be poorer, colder, less comfortable, with less meat, fewer cars and no plane travel will never work, and will certainly not be copied by China, India and Africa. What will work is innovating a future where green is cheaper.

Innovation needs to be the cornerstone of our climate policy. Secondly, we need to invest in adaptation. Adaptive infrastructure like green areas and water features help cool cities during heatwaves. Farmers already adapt their practices to suit changing climates. As temperatures rise, farmers plant earlier, with better-adapted varieties or change what they grow, allowing the world to be ever-better fed.

Adaptation has often been overlooked in climate change policy, or derided as a distraction from reducing emissions. The truth is it’s a crucial part of avoiding large parts of the climate problem.

Along with innovation and adaptation, the third climate policy is to drive human development. Lifting communities out of poverty and making them flourish is not just good in and of itself — it is also a defense against rising temperatures. Eliminating poverty reduces vulnerability to climate events like heat waves or hurricanes. Prosperous societies afford more healthcare, social protection, and investment in climate adaptation. Wealthy countries spend more on environmental preservation, reducing deforestation, and promoting conservation efforts.

Focusing funds on these three policy areas will mean Canada can help spark the breakthroughs that are needed to lower energy costs while reducing emissions and making future generations around the world more resilient to climate and all the other big challenges. The path to solving climate change lies in innovation, adaptation, and building prosperous economies.

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Business

Net Zero by 2050: There is no realistic path to affordable and reliable electricity

Published on April 28, 2025

By

  By Dave Morton of the Canadian Energy Reliability Council.

Maintaining energy diversity is crucial to a truly sustainable future

Canada is on an ambitious path to “decarbonize” its economy by 2050 to deliver on its political commitment to achieve net-zero greenhouse gas (GHG) emissions. Although policy varies across provinces and federally, a default policy of electrification has emerged, and the electricity industry, which in Canada is largely owned by our provincial governments, appears to be on board.

In a November 2023 submission to the federal government, Electricity Canada, an association of major electric generators and suppliers in Canada, stated: “Every credible path to Net Zero by 2050 relies on electrification of other sectors.” In a single generation, then, will clean electricity become the dominant source of energy in Canada? If so, this puts all our energy eggs in one basket. Lost in the debate seem to be considerations of energy diversity and its role in energy system reliability.

What does an electrification strategy mean for Canada? Currently, for every 100 units of energy we consume in Canada, over 40 come to us as liquid fuels like gasoline and diesel, almost 40 as gaseous fuels like natural gas and propane, and a little less than 20 in the form of electrons produced by those fuels as well as by water, uranium, wind, solar and biomass. In British Columbia, for example, the gas system delivered approximately double the energy of the electricity system.

How much electricity will we need? According to a recent Fraser Institute report, a decarbonized electricity grid by 2050 requires a doubling of electricity. This means adding the equivalent of 134 new large hydro projects like BC’s Site C, 18 nuclear facilities like Ontario’s Bruce Power Plant, or installing almost 75,000 large wind turbines on over one million hectares of land, an area nearly 14.5 times the size of the municipality of Calgary.

Is it feasible to achieve a fully decarbonized electricity grid in the next 25 years that will supply much of our energy requirements? There is a real risk of skilled labour and supply chain shortages that may be impossible to overcome, especially as many other countries are also racing towards net-zero by 2050. Even now, shortages of transformers and copper wire are impacting capital projects. The Fraser Institute report looks at the construction challenges and concludes that doing so “is likely impossible within the 2050 timeframe”.

How we get there matters a lot to our energy reliability along the way. As we put more eggs in the basket, our reliability risk increases. Pursuing electrification while not continuing to invest in our existing fossil fuel-based infrastructure risks leaving our homes and industries short of basic energy needs if we miss our electrification targets.

The IEA 2023 Roadmap to Net Zero estimates that technologies not yet available on the market will be needed to deliver 35 percent of emissions reductions needed for net zero in 2050.  It comes then as no surprise that many of the technologies needed to grow a green electric grid are not fully mature. While wind and solar, increasingly the new generation source of choice in many jurisdictions, serve as a relatively inexpensive source of electricity and play a key role in meeting expanded demand for electricity, they introduce significant challenges to grid stability and reliability that remain largely unresolved. As most people know, they only produce electricity when the wind blows and the sun shines, thereby requiring a firm back-up source of electricity generation.

Given the unpopularity of fossil fuel generation, the difficulty of building hydro and the reluctance to adopt nuclear in much of Canada, there is little in the way of firm electricity available to provide that backup. Large “utility scale” batteries may help mitigate intermittent electricity production in the short term, but these facilities too are immature. Furthermore, wind, solar and batteries, because of the way they connect to the grid don’t contribute to grid reliability in the same way the previous generation of electric generation does.

Other zero-emitting electricity generation technologies are in various stages of development – for example, Carbon Capture Utilization and Storage (CCUS) fitted to GHG emitting generation facilities can allow gas or even coal to generate firm electricity and along with Small Modular Reactors (SMRs) can provide a firm and flexible source of electricity.

What if everything can’t be electrified? In June 2024, a report commissioned by the federal government concluded that the share of overall energy supplied by electricity will need to roughly triple by 2050, increasing from the current 17 percent to between 40 and 70 percent. In this analysis, then, even a tripling of existing electricity generation, will at best only meet 70 percent of our energy needs by 2050.

Therefore, to ensure the continued supply of reliable energy, non-electrification pathways to net zero are also required. CCUS and SMR technologies currently being developed for producing electricity could potentially be used to provide thermal energy for industrial processes and even building heat; biofuels to replace gasoline, diesel and natural gas; and hydrogen to augment natural gas, along with GHG offsets and various emission trading schemes are similarly

While many of these technologies can and currently do contribute to GHG emission reductions, uncertainties remain relating to their scalability, cost and public acceptance. These uncertainties in all sectors of our energy system leaves us with the question: Is there any credible pathway to reliable net-zero energy by 2050?

Electricity Canada states: “Ensuring reliability, affordability, and sustainability is a balancing act … the energy transition is in large part policy-driven; thus, current policy preferences are uniquely impactful on the way utilities can manage the energy trilemma. The energy trilemma is often referred to colloquially as a three-legged stool, with GHG reductions only one of those legs. But the other two, reliability and affordability, are key to the success of the transition.

Policymakers should urgently consider whether any pathway exists to deliver reliable net-zero energy by 2050. If not, letting the pace of the transition be dictated by only one of those legs guarantees, at best, a wobbly stool. Matching the pace of GHG reductions with achievable measures to maintain energy diversity and reliability at prices that are affordable will be critical to setting us on a truly sustainable pathway to net zero, even if it isn’t achieved by 2050.

Dave Morton, former Chair and CEO of the British Columbia Utilities Commission (BCUC), is with the Canadian Energy Reliability Council. 

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