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Prime minister must excise terrible energy policies

Published

2 months ago

4 minute read

From the Fraser Institute

By Kenneth P. Green

Prime Minister Mark Carney recently unveiled his new cabinet. And there’s quite a lot of work to do.

Before his election victory, the prime minister exorcised a widely-despised element of Canada’s climate policy, the “consumer” carbon tax, which was imposed directly on Canadians for their consumption of energy (electricity, heating fuel, gasoline). At the same time, in response to President Donald Trump’s tariff war, the prime minister made grand proclamations of future energy glory. “Canada has a tremendous opportunity to be the world’s leading energy superpower, in both clean and conventional energy,” he said. “We are going to aggressively develop projects that are in the national interest in order to protect Canada’s energy security, diversify our trade, and enhance our long-term competitiveness—all while reducing emissions.”

Great plan. So what’s next?

Again, quite a lot. If Prime Minister Carney is serious about reforming Canadian energy policy so Canada can compete against a likely resurgent Trump-driven U.S. energy sector, he must follow this latest bit of tax reform and vocal boosterism with genuine regulatory reform. In other words, the Carney government must repeal the anti-energy regulations implemented by the Trudeau government.

First on the chopping block—Bill C-69, colloquially known as the “No More Pipelines Act,” which created massive uncertainty by introducing vague assessment criteria including “gender implications” for major energy projects including pipelines and LNG export facilities. If Ottawa simplified the project review process, it could help Canada access more lucrative markets for energy products outside the United States.

Then there’s Bill C-48 (colloquially known as the “Tanker Ban Bill”), which changed regulations for large vessels transporting oil to and from ports on British Columbia’s northern coast, effectively banning such shipments and limiting the ability of Canadian firms to export to non-U.S. markets. Tanking the tanker ban should be an obvious sail forward.

Next up, the Trudeau plan to cap greenhouse gas emissions from the oil and gas sector (at 35 per cent below 2019 levels by 2030), alongside major new regulations for methane emissions in the sector. These regulations will likely raise costs and curtail production. By removing them, Ottawa can increase the ability of Canada’s energy sector to compete against a rising U.S. energy sector.

Finally, the Trudeau government’s Clean Electricity Regulations will likely drive electricity rates through the roof while ushering in an age of less reliable electricity supply—a two-handed slap to Canadian energy consumers. Ending these misguided regulations is a no-brainer for the new government in Ottawa.

Prime Minister Carney’s first acts on the Canadian energy file look good. The carbon tax is half-dead (the industrial tax remains in place). And a new pro-energy rhetoric has displaced Trudeau’s “phase it out” framing of Canadian energy policy. But if Carney and his new cabinet are serious about unleashing Canada’s energy potential, reducing dependence on the U.S. market, reaching more lucrative foreign markets, increasing production, and so on, they better get cracking on a regulatory reform agenda lest they find themselves hamstrung by their predecessor’s regulatory legacy.

Kenneth P. Green

Senior Fellow, Fraser Institute
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