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Economy

Canada should not want to lead the world on climate change policy

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8 minute read

From the Fraser Institute

By Ross McKitrick

Some commentators in the media want the the federal Conservatives to take a leadership position on climate, and by extension make Canada a world leader on the journey to the low-carbon uplands of the future. This would be a mistake for three reasons.

First, unlike other areas such as trade, defence or central banking, where diplomats aim for realistic solutions to identifiable problems, in the global climate policy world one’s bona fides are not established by actions but by willingness to recite the words of an increasingly absurd creed. Take, for example, United Nations Secretary General António Guterres’ fanatical rhetoric about the “global boiling crisis” and his call for a “death knell” for fossil fuels “before they destroy our planet.” In that world no credit is given for actually reducing emissions unless you first declare that climate change is an existential crisis, that we are (again, to quote Guterres) at the “tip of a tipping point” of “climate breakdown” and that “humanity has become a weapon of mass extinction.” Any attempt to speak sensibly on the issue is condemned as denialism, whereas any amount of hypocrisy from jet-setting politicians, global bureaucrats and celebrities is readily forgiven as long as they parrot the deranged climate crisis lingo.

The opposite is also true. Unwillingness to state absurdities means actual accomplishments count for nothing. Compare President Donald Trump, who pulled out of the Paris treaty and disparaged climate change as unimportant, to Prime Minister Justin Trudeau who embraced climate emergency rhetoric and dispatched ever-larger Canadian delegations to the annual greenhouse gabfests. In the climate policy world, that made Canada a hero and the United States a villain. Meanwhile, thanks in part to expansion of natural gas supplies under the Trump administration, from 2015 to 2019 U.S. energy-based CO2 emissions fell by 3 per cent even as primary energy consumption grew by 3 per cent. In Canada over the same period, CO2 emissions fell only 1 per cent despite energy consumption not increasing at all. But for the purpose of naming heroes and villains, no one cared about the outcome, only the verbiage. Likewise, climate zealots will not credit Conservatives for anything they achieve on the climate file unless they are first willing to repeat untrue alarmist nonsense, and probably not even then.

On climate change, Conservatives should resolve to speak sensibly and use mainstream science and economic analysis, but that means rejecting climate crisis rhetoric and costly “net zero” aspirations. Which leads to the second problem—climate advocates love to talk about “solutions” but their track record is 40 years of costly failure and massive waste. Here again leadership status is tied to one’s willingness to dump ever-larger amounts of taxpayer money into impractical schemes loaded with all the fashionable buzzwords. The story is always the same. We need to hurry and embrace this exciting economic opportunity, which for some reason the private sector won’t touch.

There are genuine benefits to pursuing practical sensible improvements in the way we make and use fossil fuels. But the current and foreseeable state of energy technology means CO2 mitigation steps will be smaller and much slower than was the case for other energy side-effects such as acid rain and particulates. It has nothing to do with lack of “political will;” it’s an unavoidable consequence of the underlying science, engineering and economics. In this context, leadership means being willing sometimes to do nothing when all the available options yield negative net benefits.

That leads to the third problem—opportunity cost. Aspiring to “climate leadership” means not fixing any of the pressing economic problems we currently face. Climate policy over the past four decades has proven to be very expensive, economically damaging and environmentally futile. The migration of energy-intensive industry to China and India is a very real phenomenon and more than offsets the tiny emission-reduction measures Canada and other western countries pursued under the Kyoto Protocol.

The next government should start by creating a new super-ministry of Energy, Resources and Climate where long-term thinking and planning can occur in a collaborative setting, not the current one where climate policy is positioned at odds with—and antagonistic towards—everything else. The environment ministry can then return its focus to air and water pollution management, species and habitat conservation, meteorological services and other traditional environmental functions. The climate team should prepare another national assessment but this time provide much more historical data to help Canadians understand long-term observed patterns of temperature and precipitation rather than focusing so much on model simulations of the distant future under implausible emission scenarios.

The government should also move to extinguish “climate liability,” a legal hook on which dozens of costly nuisance lawsuits are proliferating here and elsewhere. Canada should also use its influence in the UN Intergovernmental Panel on Climate Change to reverse the mission creep, clean out the policy advocacy crowd and get the focus back on core scientific assessments. And we should lead a push to move the annual “COPs”—Conferences of the Parties to the Rio treaty—to an online format, an initiative that would ground enough jumbo jets each year to delay the melting of the ice caps at least a century.

Finally, the new Ministry of Energy, Resources and Climate should work with the provinces to find one region or municipality willing to be a demonstration project on the feasibility of relying only on renewables for electricity. We keep hearing from enthusiasts that wind and solar are the cheapest and best options, while critics point to their intermittency and hidden costs. Surely there must be one town in Canada where the councillors, fresh from declaring a climate crisis and buying electric buses, would welcome the chance to, as it were, show leadership. We could fit them out with all the windmills and solar panels they want, then disconnect them from the grid and see how it goes. And if upon further reflection no one is willing to try it, that would also be useful information.

In the meantime, the federal Conservatives should aim merely to do some sensible things that yield tangible improvements on greenhouse gas emissions without wrecking the economy. Maybe one day that will be seen as real leadership.

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Business

Number of federal executives up 42% under Trudeau

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From the Canadian Taxpayers Federation

By Ryan Thorpe 

“The government has ballooned the bureaucracy across the board, but even more concerning is that this government is swelling the ranks of its most expensive bureaucrats”

Both the number and cost of federal executives has exploded under the watch of Prime Minister Justin Trudeau, according to government data and access-to-information records obtained by the Canadian Taxpayers Federation.

As of 2024, there are 9,155 federal bureaucrats classified as executives by the Trudeau government, an increase of 42 per cent since 2016, when the total sat at 6,414.

“The government has ballooned the bureaucracy across the board, but even more concerning is that this government is swelling the ranks of its most expensive bureaucrats,” said Franco Terrazzano, CTF Federal Director. “Trudeau should go after the fat cats first and that means cutting back the size and cost of the federal c-suite.”

Growth has been seen among every class of executives within the federal government, with salaries  ranging from $134,827 to $255,607.

In 2022, the last year for which records are available, federal executives raked in $1.95 billion in total compensation. That represented a 41 per cent increase over 2015.

Inflation increased by 19.4 per cent between 2015 and 2022, according to Statistics Canada data.

About 90 per cent of federal executives get a bonus each year, according to records obtained by the CTF. The feds handed out $202 million in bonuses in 2022. The average bonus among executives was $18,252.

“Taxpayers are paying for more executives taking bigger salaries and bigger bonuses, but the government still can’t deliver good results,” Terrazzano said. “Can anyone in government explain why we’re paying so much for so little?”

The ballooning of the federal c-suite comes at a time when growth in the government’s bureaucracy has also been exploding.

The total size of the federal bureaucracy has grown by 42 per cent since Trudeau came to power, with more than 108,000 new bureaucrats added to the payroll.

Spending on federal bureaucrats hit a record high $67.4 billion last year, representing a 68 per cent increase in costs since 2016.

Meanwhile, spending on consultants has also reached a record high, with expenditures for 2023-24 sitting at $21.6 billion.

Despite the increased size of the bureaucracy and the federal c-suite, as well as record spending on outside consultants, departments continue to struggle to meet half of their performance targets.

In 2022-23, federal departments hit just 50 per cent of their performance targets, according to data  from the Treasury Board of Canada Secretariat. Each year from 2018 through 2021, federal departments hit less than half of their performance targets.

“Less than 50 per cent of [performance] targets are consistently met within the same year,” according to a 2023 report from the Parliamentary Budget Officer, the government’s independent budget watchdog.

“Taxpayers are paying through the nose because everywhere you look the size and cost of government is ballooning,” Terrazzano said. “If any politician is serious about fixing the budget and cutting taxes, they will have to shrink Ottawa’s bloated bureaucracy.”

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Economy

Federal government’s recent fiscal record includes unprecedented levels of spending and debt

Published on

From the Fraser Institute

By Jake Fuss and Grady Munro

As of 2024, Ottawa’s debt equals $51,467 per Canadian—12.3 per cent more than in 1995 when Canada reached a near-debt crisis.

According to an Angus Reid poll from earlier this year, 59 per cent of Canadians believe the federal government is spending too much and 64 per cent said they’re concerned about the size of the budget deficit. Nanos Research had similar polling results, finding 63 per cent of Canadians want Ottawa to reduce spending. These polling results are not surprising given the alarming state of federal finances.

The Trudeau government has consistently spent at record-high levels before, during and after COVID. In fact, Prime Minister Trudeau is on track to record the seven-highest years of per-person spending in Canadian history between 2018 and 2024. Inflation-adjusted spending (excluding debt interest costs) is expected to reach $11,856 per person this year—10.2 per cent higher than during the 2008-09 financial crisis and 28.7 per cent higher than during the peak of the Second World War.

Consequently, the Trudeau government has posted 10 consecutive deficits since taking office. The projected deficit in 2024/25 is a whopping $39.8 billion. This string of deficits has spurred a dramatic increase in federal debt. From 2014/15 (Prime Minister Harper’s last full year) to 2024/25, total federal debt is expected to have nearly doubled to $2.1 trillion. To make matters worse, the government plans to run more deficits until at least 2028/29 and total debt could rise by an additional $400.1 billion by March 2029.

Indeed, due to reckless decisions, the Trudeau government is on track to record the five-highest years of per-person debt (inflation-adjusted) in Canadian history between 2020 and 2024. As of 2024, Ottawa’s debt equals $51,467 per Canadian—12.3 per cent more than in 1995 when Canada reached a near-debt crisis.

Worse still, that doesn’t include any provincial or municipal debt, so the total government debt burden per Canadian is considerably higher.

Of course, to pay for this sky-high spending, the Trudeau government has borrowed and raised taxes. In addition to recently raising taxes on capital gains—harming entrepreneurship, investment and growth—the government has raised personal income taxes on middle-income families. Today, 86 per cent of middle-income Canadian families pay more in taxes than they did in 2015.

And what has this combination of tax increases and record-high spending and debt delivered for Canadians?

Amid widespread concerns about the rising cost of living, the average Canadian family is spending more on taxes than on food, shelter and clothing combined. Despite a recent federal budget supposedly focused on “fairness for every generation,” younger generations face a disproportionately higher tax burden in the future due to debt accumulated today. Meanwhile, Canadian living standards (as measured by inflation-adjusted GDP per person) are in a historic decline and (as of June 2024) stood 3.2 per cent below 2019 levels.

The current state of federal finances is simply unacceptable. Ottawa can and must do better. Canadians are already feeling the consequences, and it will only continue to get worse for future generations if we don’t constrain spending and return to balanced budgets soon.

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