Ottawa should scrap its oil and gas emissions cap plan

Ottawa’s proposed GHG cap, which solely targets the oil and gas industry while exempting the remaining 73.4 per cent of the country’s GHG emissions, lacks a scientific rationale.

Once again, Alberta is at odds with the federal government, this time over proposed regulations, which would impose a cap on greenhouse gas (GHG) emissions in the oil and gas sector, with the goal of reducing emissions by 35 to 38 per cent by 2030 (relative to 2019 levels).

The Smith government fiercely opposes these regulations and recently submitted formal feedback to Ottawa. While the federal government says these regulations are necessary to combat climate change, in the reality they will impose significant costs on Canadians without yielding detectable environmental benefits.

Firstly, it’s a universally accepted fact that a unit of carbon dioxide has the same atmospheric effect regardless of its source, be it from an oilsands mine in Alberta, a manufacturer in Quebec or a steel mill in Ontario. CO2 is CO2 is CO2. Therefore, Ottawa’s proposed GHG cap, which solely targets the oil and gas industry while exempting the remaining 73.4 per cent of the country’s GHG emissions, lacks a scientific rationale.

Moreover, Canada already has a national carbon tax aimed at reducing GHG emissions. Stacking a GHG cap on top of the carbon tax contradicts the rationale for a carbon tax and would likely result in emissions reduction at a very high cost. According to a recent economic analysis by the Conference Board of Canada, the cap could reduce Canada’s economy (i.e. 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.

These new findings echo earlier studies, which show the proposed cap’s large costs and little benefits. For instance, a recent study 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.

Again, these large economic costs come with almost no discernible environmental benefit. 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.

Meanwhile, every credible forecast of world energy consumption indicates that oil and gas will continue to dominate the global energy supply mix for decades. 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.

Clearly, this is an opportunity for Canada, which possesses abundant reserves of natural gas (a cleaner alternative to coal), to play a pivotal role in reducing global GHG emissions. Countries such as China, which is grappling with rising energy demands, are eager to reduce their heavy reliance on coal. And several countries including Germany want to diversify away from Russian gas for geopolitical and energy security reasons. By expanding our natural gas resources, Canada could unleash significant economic activity (jobs, revenue, etc.) while reducing global GHG emissions and improving global energy security.

The Trudeau government will likely publish a draft version of the regulations, which will include the cap, sometime in the next few months. The cap plan lacks any scientific, economic or environmental rationale so the government should scrap the cap for the benefit of Canadians and the world.

Authors:

Elmira Aliakbari

Director, Natural Resource Studies, Fraser Institute

Julio Mejía

Policy Analyst

Related Topics:#ElmiraAliakbari #FraserInstitute #GHGEmissions #JulioMejía #OilAndGasEmissionsCap #OilAndGasIndustry feature

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Economic progress stalling for Canada and other G7 countries

Published on May 10, 2024

Todayville

From the Fraser Institute

By Jake Fuss

For decades, Canada and other countries in the G7 have been known as the economic powerhouses of the world. They generally have had the biggest economies and the most prosperous countries. But in recent years, poor government policy across the G7 has contributed to slowing economic growth and near-stagnant living standards.

Simply put, the Group of Seven countries—Canada, France, Germany, Italy, Japan, the United Kingdom and the United States—have become complacent. Rather than build off past economic success by employing small governments that are limited and efficient, these countries have largely pursued policies that increase or maintain high taxes on families and businesses, increase regulation and grow government spending.

Canada is a prime example. As multiple levels of government have turned on the spending taps to expand programs or implement new ones, the size of total government has surged ever higher. Unsurprisingly, Canada’s general government spending as a share of GDP has risen from 39.3 per cent in 2007 to 42.2 per cent in 2022.

At the same time, federal and provincial governments have increased taxes on professionals, businessowners and entrepreneurs to the point where the country’s top combined marginal tax rate is now the fifth-highest among OECD countries. New regulations such as Bill C-69, which instituted a complex and burdensome assessment process for major infrastructure projects and Bill C-48, which prohibits producers from shipping oil or natural gas from British Columbia’s northern coast, have also made it difficult to conduct business.

The results of poor government policy in Canada and other G7 countries have not been pretty.

Productivity, which is typically defined as economic output per hour of work, is a crucial determinant of overall economic growth and living standards in a country. Over the most recent 10-year period of available data (2013 to 2022), productivity growth has been meagre at best. Annual productivity growth equaled 0.9 per cent for the G7 on average over this period, which means the average rate of growth during the two previous decades (1.6 per cent) has essentially been chopped in half. For some countries such as Canada, productivity has grown even slower than the paltry G7 average.

Since productivity has grown at a snail’s pace, citizens are now experiencing stalled improvement in living standards. Gross domestic product (GDP) per person, a common indicator of living standards, grew annually (inflation-adjusted) by an anemic 0.7 per cent in Canada from 2013 to 2022 and only slightly better across the G7 at 1.3 per cent. This should raise alarm bells for policymakers.

A skeptic might suggest this is merely a global phenomenon. But other countries have fared much better. Two European countries, Ireland and Estonia, have seen a far more significant improvement than G7 countries in both productivity and per-person GDP.

From 2013 to 2022, Estonia’s annual productivity has grown more than twice as fast (1.9 per cent) as the G7 countries (0.9 per cent). Productivity in Ireland has grown at a rapid annual pace of 5.9 per cent, more than six times faster than the G7.

A similar story occurs when examining improvements in living standards. Estonians enjoyed average per-person GDP growth of 2.8 per cent from 2013 to 2022—more than double the G7. Meanwhile, Ireland’s per-person GDP has surged by 7.9 per cent annually over the 10-year period. To put this in perspective, living standards for the Irish grew 10 times faster than for Canadians.

But this should come as no surprise. Governments in Ireland and Estonia are smaller than the G7 average and impose lower taxes on individuals and businesses. In 2019, general government spending as a percentage of GDP averaged 44.0 per cent for G7 countries. Spending for governments in both Estonia and Ireland were well below this benchmark.

Moreover, the business tax rate averaged 27.2 per cent for G7 countries in 2023 compared to lower rates in Ireland (12.5 per cent) and Estonia (20.0 per cent). For personal income taxes, Estonia’s top marginal tax rate (20.0 per cent) is significantly below the G7 average of 49.7 per cent. Ireland’s top marginal tax rate is below the G7 average as well.

Economic progress has largely stalled for Canada and other G7 countries. The status quo of government policy is simply untenable.

Author:

Jake Fuss

Economy

Young Canadians are putting off having a family due to rising cost of living, survey finds

Published on May 5, 2024

Todayville

From LifeSiteNews

By Clare Marie Merkowsky

An April study has found that 42% of Gen Z and 39% of Millennials are putting off starting families due to a lack of work-life balance spurred by an increase in the cost of living.

A survey has found that more Canadians are delaying starting a family due to a lack of work-life balance spurred by the rising cost of living.

According to an April 24 Express Employment Professionals-Harris Poll survey, one-third of employed job seekers stated that they are putting off starting a family due to a lack of work-life balance, including 42% of Gen Z and 39% of Millennials.

“The most common thing I hear from candidates who are putting off starting a family is that the cost of living is too high,” Jessica Culo, an Express franchise owner in Edmonton, Alberta stated.

“We definitely hear more and more that candidates are looking for flexibility, and I think employers understand family/work balance is important to employees,” she added.

Two-thirds of respondents further stated that they believe it’s essential that the company they work for prioritizes giving its employees a good work-life balance as they look to start a family. This included 77% of Gen Z and 72% of Millennials.

The survey comes as Canada’s fertility rate hit a record-low of 1.33 children per woman in 2022. According to the data collected by Statistics Canada, the number marks the lowest fertility rate in the past century of record keeping. 

Sadly, while 2022 experienced a record-breaking low fertility rate, the same year, 97,211 Canadian babies were killed by abortion.

Canadians’ reluctance or delay to have children comes as young Canadians seem to be beginning to reap the effects of the policies of Prime Minister Justin Trudeau’s government, which has been criticized for its overspending, onerous climate regulations, lax immigration policies, and “woke” politics.

In fact, many have pointed out that considering the rising housing prices, most Canadians under 30 will not be able to purchase a home.   

Similarly, while Trudeau sends Canadians’ tax dollars oversees and further taxes their fuel and heating, Canadians are struggling to pay for basic necessities including food, rent, and heating. 

A September report by Statistics Canada revealed that food prices are rising faster than the headline inflation rate – the overall inflation rate in the country – as staple food items are increasing at a rate of 10 to 18 percent year-over-year.  

While the cost of living has increased the financial burden of Canadians looking to rear children, the nation’s child benefit program does provide some relief for those who have kids.

Under the Canadian Revenue Agency’s benefit, Canadians families are given a monthly stipend depending on their family income and situation. Each province also has a program to help families support their children.

Young Canadians looking to start a family can use the child and family benefits calculator to estimate the benefits which they would receive.

Regardless of the cost of raising children, the Catholic Church unchangeably teaches that it is a grave sin for married couples to frustrate the natural ends of the procreative act through contraceptives, abortion or other means.