Business
Federal government should stay in its lane
From the Fraser Institute
By Jason Clemens and Jake Fuss
There’s been more talk this year than normal about the need for governments, particularly Ottawa, to “stay in their own lane.” But what does this actually mean when it comes to the practical taxing, spending and regulating done by provincial and federal governments?
The rules of the road, so to speak, are laid out in sections 91 and 92 of the Canadian Constitution. As noted economist Jack Mintz recently explained, the federal government was allocated responsibility for areas of national priority such as defence and foreign relations, criminal law, and national industries such as transportation, communication and financial institutions. The provinces, on the other hand, were allotted responsibilities deemed to be closer to the people such as health care, education, social services and municipalities.
Simply put, the principle of staying in one’s lane means the federal and provincial governments respect one another’s areas of responsibility and work collaboratively when there are joint interests and/or overlapping responsibilities such as environmental issues.
The experience of the mid-1990s through to roughly 2015 shows the tangible benefits of having each level of government focus on their areas of responsibility. Recall that the Liberal Chrétien government fundamentally removed itself from several areas of provincial jurisdiction, particularly welfare and social services, in its historic 1995 budget.
But the election of the Trudeau government in 2015 represented a marked change in approach. The tax and spending policies of the Trudeau government, which broke a 20-year consensus, favoured ever-increasing spending, higher taxes and much higher levels of borrowing. Federal spending (excluding interest payments on debt) has increased from $273.6 billion in 2015-16 when Trudeau first took office to an expected $483.6 billion this year, an increase of 76.7 per cent.
Federal taxes on most Canadians, including the middle class, have also increased despite the Trudeau government promising lower taxes. And despite the tax increases, borrowing has also increased. Consequently, the national debt has ballooned from $1.1 trillion when Trudeau took office to an estimated $2.1 trillion this year.
Despite these massive spending increases, there are serious questions about core areas of federal responsibility. Consider, for example, the major problems with Canada’s defence spending.
Canada has been called out by both NATO officials and our counterparts within NATO for failing to meet our commitments. As a NATO country, Canada is committed to spend 2 per cent of the value of our economy (GDP) annually on defence. The latest estimate is that Canada will spend 1.4 per cent of GDP on defence and we’re the only country without a plan to reach the target by 2030. The Parliamentary Budget Officer recently estimated that to reach our NATO commitment, defence spending would have to increase by $21.3 billion in 2029-30, which given the state of federal finances would entail much higher borrowing and/or higher taxes.
So, while the Trudeau government has increased federal spending markedly, it has not spent those funds on core areas of federal responsibility. Instead, Trudeau’s Ottawa has increasingly involved itself in provincial areas of responsibility. Consider three new national initiatives that are all squarely provincial areas of responsibility: pharmacare, $10-a-day daycare and dental care.
And the amounts involved in these programs are not incidental. In Budget 2021, the Trudeau government announced $27.2 billion over five years for the new $10-a-day daycare initiative, Budget 2023 committed $13.0 billion for the dental benefit over five years, and Budget 2024 included a first step towards national pharmacare with spending of $1.5 billion over five years to cover most contraceptives and some diabetes medications.
So, while the Trudeau government has deprioritized core areas of federal responsibility such as defence, it has increasingly intruded on areas of provincial responsibility.
Canada works best when provincial and federal governments recognize and adhere to their roles within Confederation as was more the norm for more than two decades. The Trudeau government’s intrusion into provincial jurisdiction has increased tensions with the provinces, likely created unsustainable new programs that will ultimately put enormous financial pressure on the provinces, and led to a less well-functioning federal government. Staying in one’s lane makes sense for both driving and political governance.
Authors:
Business
A tale of two countries – Drill, Baby, Drill vs Cap, Baby, Cap
From EnergyNow.ca
By Deidra Garyk
Analysis of the U.S. Election and the Canadian Oil and Gas Emissions Cap
Monday, November 4, the Canadian federal government announced the long-awaited draft emissions cap for the oil and gas industry.
The next day, the world’s largest economy held an election that resulted in a decisive victory for the position of 47th President of the USA.
With the GOP (Republicans) taking a commanding lead with 53 out of 100 possible Senate seats, and two more still to be confirmed, they have a majority that can help move along their plans for at least the next two years. Rumoured expectations are that they’ll take the House too, which will further solidify President-elect Trump’s mandate.
As part of Trump’s campaign platform, Agenda47, he promised “to bring Americans the lowest-cost energy and electricity on Earth.” The agenda pledged that “to keep pace with the world economy that depends on fossil fuels for more than 80% of its energy, President Trump will DRILL, BABY, DRILL.”
The platform also states that under his leadership, the US will once again leave the Paris Climate Accords, and he will oppose all Green New Deal policies that impact energy development. He also plans to roll back the Biden administration’s EV mandates and emissions targets, while advocating for low emissions nuclear energy.
It isn’t a guarantee that he will do anything that he says; however, if the past is any indication, we can expect Trump to follow through on his energy and climate promises.
Even though Canada and the USA are on a contiguous land mass, they could not be farther apart in energy and climate ideology.
On the northern side of the border, a day before, Canada’s green avengers of the Liberal cabinet congregated for a press conference to jubilantly announce their emissions cap, which has been studied and determined to be a defacto production cap. CAP, BABY, CAP!
Claims that the new rules go after pollution, not production, should be met with scepticism. If pollution is the problem, there would be blanket emissions caps on all heavy emitting industries and imported oil and gas would be subject to the same requirements, but it is not. I’m not sure how else to read it other than a willful slight with a sledgehammer against the Canadian oil and gas industry.
Especially since Natural Resources Minister Jonathan Wilkinson said that this is a backstop to ensure the Pathways Alliance does what they say they will. I wonder if the Pathways folks feel like they have a giant target on their backs… and fronts?
The hour-long press conference was a lesson in how to deceive with a straight face. Most of the Liberals’ claims have either been discredited or are unsubstantiated as to be meaningless.
Wilkinson, a Rhodes Scholar, calls this cap an “economic opportunity” because he believes that for Canadian oil and gas, climate change is a competitive issue, for both combusted and non-combusted products. Square that circle when no other country on the planet has an emissions cap on its oil and gas industry.
Nonetheless, the Liberals expect production to increase, which is counter to what they say out of the other side of their mouths – that oil and gas demand will peak this year, and we are not going to be using it much longer so we should just shut it all down.
Wilkinson excitedly announced the need for thousands and thousands of workers to build the decarbonization infrastructure of the new energy future. However, the Department of Environment’s Cost-Benefit Analysis Summary contradicts this claim, citing thousands of job losses.
The Study also identifies that the costs from the plan will be borne by Canadians. The Conference Board of Canada expressed similar concerns, but they were dismissed by the politicians on stage.
Edmonton MP and Minister of Employment, Workforce Development, and Official Languages Randy Boissonnault, also known as “The Other Randy” for his ethical mis-steps, put on one of the best shows of the press conference. He speaks so convincingly that you almost believe him. Almost.
He claimed that when he was campaigning last election during the Covid pandemic, the number one topic at the doors was climate change. Edmontonians wanted to talk about climate change over the global pandemic that was disrupting their lives? Yeah, right.
The Other Randy praised Ministers Guilbeault and Wilkinson for working with industry on the regulations and promised that Canadian workers will be part of the consultation and final rules. Forgive me for being sceptical.
The Spiderman-like Steven Guilbeault, Minister of Environment and Climate Change, said that oil companies have seen record profits, going from $6.6 billion pre-pandemic to $66 billion post-pandemic, and the Liberals want that extra money used on projects they approve of, namely ones that are climate-related.
Guilbault believes this cap is necessary for prosperity and energy security, along with being good for workers and “for good union jobs”. It’s not often talked about, but within the feds’ climate plans is a push for unionizing jobs. It was top-of-mind for the Deputy Minister of Labour when I was part of a delegation to Ottawa last year. She was most interested in learning about how many oil and gas jobs are unionized and showed visible displeasure at finding out that most are not.
The press conference seemed to be more of a one-sided political bun fight, with a disproportionate amount of time spent talking smack about Pierre Poilievre, Premier Danielle Smith, and Premier Scott Moe. Perhaps demonstrating the Liberals’ trepidation about the future since the final regulations will come out late next year and go into effect January 1, 2026, when it’s likely they will be out of office.
With the climate zealots out of power, enforcement may be a challenge. What if companies don’t meet the arbitrary targets and deadlines imposed by the rules? What if companies don’t buy the required credits? A reporter asked, but Guilbeault didn’t give an answer in his response. I guess we will have to wait to see what changes are made to the Canadian Environmental Protection Act (CEPA), the enforcement regulations.
Wilkinson said climate change is a “collective action problem” that must be addressed as it is the “existential threat to the human race.” This gives you a sense of how they see things – there is a problem and government is the solution.
Meanwhile, energy policy is a “Day 1 priority” for Trump. As a businessperson, he understands that demand is growing, and limited regulations are the way to develop all forms of energy.
Even if industry can meet the emissions reduction targets – there are a variety of opinions on the proposed rules – it does not mean the regulations should be implemented. Canada’s real per capita GDP is 73 per cent of America’s, so as Canada goes hard on emissions reduction regulations, if investment moves south, that number is not going to improve. Don’t let them tell you otherwise.
Deidra Garyk is the Founder and President of Equipois:ability Advisory, a consulting firm specializing in sustainability solutions. Over 20 years in the Canadian energy sector, Deidra held key roles, where she focused on a broad range of initiatives, from sustainability reporting to fostering collaboration among industry stakeholders through her work in joint venture contracts.
Outside of her professional commitments, Deidra is an energy advocate and a recognized thought leader. She is passionate about promoting balanced, fact-based discussions on energy policy and sustainability. Through her research, writing, and public speaking, Deidra seeks to advance a more informed and pragmatic dialogue on the future of energy.
Business
Biden-Harris Admin Reportedly Backs Off On Major Emissions Initiative At UN Climate Summit
From the Daily Caller News Foundation
By Nick Pope
The Biden-Harris administration is quietly backing away from a plan to use the ongoing U.N. climate conference to announce an international call for emissions reductions, according to Politico.
It is not clear whether it is because President-elect Donald Trump decisively won last week’s presidential election, but Biden-Harris officials reportedly intended to partner with several other countries in announcing “ambitious” carbon emissions reduction goals for 2035 before the announcement fell through, according to Politico, which cited a draft press release it obtained and several unnamed officials. Had it not fallen through, the announcement could have gone live as early as Monday, the first day of the conference — commonly referred to as COP29 — in Azerbaijan, a Caucasian petrostate with a questionable human rights record.
The aborted call to action would not have been legally binding, though it would have served as a signal to corporations to invest in emissions reduction initiatives and pave the way for other nations to get on board, according to Politico. The countries that would have been named in the announcement would have committed to slashing emissions across nearly every sector of their respective economies, and they would have taken aim at specific chemicals like carbon dioxide, methane and nitrous oxide.
The press release announcing the commitments “clearly won’t be published” at this point, one senior foreign diplomat told Politico, which granted the source anonymity to speak freely on the matter. Beyond Trump’s victory, other potential factors that may have interfered with the plan to roll out the 2035 targets include ambivalence from potential partners or bureaucratic logjam in the European Union, an American ally that typically collaborates on similar climate targets.
The U.S. circulated the idea of putting out a statement ahead of COP29 with “a lot of parties but never pushed for it to become something more,” a European official involved in climate negotiations told Politico.
Trump’s pending return to the White House is looming large at COP29, given the president-elect’s pledges to roll back green spending, regulations and initiatives and jack up fossil fuel production, according to CBS News. Moreover, Trump has also promised to withdraw again from the U.N.’s Paris Climate Accords, which he did in his first term before the Biden-Harris administration rejoined the deal.
The White House did not respond immediately to a request for comment.
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