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

From the MacDonald Laurier Institute

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 20^th 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 6^th 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.

Related Topics:#HeatherExnerPirot #MacdonaldLaurierInstitute #PolicyMakerOfTheYear #RuthlessRecklessDamaging #StevenGuilbeault

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Ford and Trudeau are playing checkers. Trump and Smith are playing chess

Published on December 19, 2024

Dan McTeague

By Dan McTeague

Ford’s calls for national unity – “We need to stand united as Canadians!” – in context feels like an endorsement of fellow Electric Vehicle fanatic Trudeau. And you do wonder if that issue has something to do with it. After all, the two have worked together to pump billions in taxpayer dollars into the EV industry.

There’s no doubt about it: Donald Trump’s threat of a blanket 25% tariff on Canadian goods (to be established if the Canadian government fails to take sufficient action to combat drug trafficking and illegal crossings over our southern border) would be catastrophic for our nation’s economy. More than $3 billion in goods move between the U.S. and Canada on a daily basis. If enacted, the Trump tariff would likely result in a full-blown recession.

It falls upon Canada’s leaders to prevent that from happening. That’s why Justin Trudeau flew to Florida two weeks ago to point out to the president-elect that the trade relationship between our countries is mutually beneficial.

This is true, but Trudeau isn’t the best person to make that case to Trump, since he has been trashing the once and future president, and his supporters, both in public and private, for years. He did so again at an appearance just the other day, in which he implied that American voters were sexist for once again failing to elect the nation’s first female president, and said that Trump’s election amounted to an assault on women’s rights.

Consequently, the meeting with Trump didn’t go well.

But Trudeau isn’t Canada’s only politician, and in recent days we’ve seen some contrasting approaches to this serious matter from our provincial leaders.

First up was Doug Ford, who followed up a phone call with Trudeau earlier this week by saying that Canadians have to prepare for a trade war. “Folks, this is coming, it’s not ‘if,’ it is — it’s coming… and we need to be prepared.”

Ford said that he’s working with Liberal Finance Minister Chrystia Freeland to put together a retaliatory tariff list. Spokesmen for his government floated the idea of banning the LCBO from buying American alcohol, and restricting the export of critical minerals needed for electric vehicle batteries (I’m sure Trump is terrified about that last one).

But Ford’s most dramatic threat was his announcement that Ontario is prepared to shut down energy exports to the U.S., specifically to Michigan, New York, Wisconsin, and Minnesota, if Trump follows through with his plan. “We’re sending a message to the U.S. You come and attack Ontario, you attack the livelihoods of Ontario and Canadians, we’re going to use every tool in our toolbox to defend Ontarians and Canadians across the border,” Ford said.

Now, unfortunately, all of this chest-thumping rings hollow. Ontario does almost $500 billion per year in trade with the U.S., and the province’s supply chains are highly integrated with America’s. The idea of just cutting off the power, as if you could just flip a switch, is actually impossible. It’s a bluff, and Trump has already called him on it. When told about Ford’s threat by a reporter this week, Trump replied “That’s okay if he does that. That’s fine.”

And Ford’s calls for national unity – “We need to stand united as Canadians!” – in context feels like an endorsement of fellow Electric Vehicle fanatic Trudeau. And you do wonder if that issue has something to do with it. After all, the two have worked together to pump billions in taxpayer dollars into the EV industry. Just over the past year Ford and Trudeau have been seen side by side announcing their $5 billion commitment to Honda, or their $28.2 billion in subsidies for new Stellantis and Volkswagen electric vehicle battery plants.

Their assumption was that the U.S. would be a major market for Canadian EVs. Remember that “vehicles are the second largest Canadian export by value, at $51 billion in 2023 of which 93% was exported to the U.S.,”according to the Canadian Vehicle Manufacturers Association, and “Auto is Ontario’s top export at 28.9% of all exports (2023).”

But Trump ran on abolishing the Biden administration’s de facto EV mandate. Now that he’s back in the White House, the market for those EVs that Trudeau and Ford invested in so heavily is going to be much softer. Perhaps they’d like to be able to blame Trump’s tariffs for the coming downturn rather than their own misjudgment.

In any event, Ford’s tactic stands in stark contrast to the response from Alberta, Canada’s true energy superpower. Premier Danielle Smith made it clear that her province “will not support cutting off our Alberta energy exports to the U.S., nor will we support a tariff war with our largest trading partner and closest ally.”

Smith spoke about this topic at length at an event announcing a new $29-million border patrol team charged with combatting drug trafficking, at which said that Trudeau’s criticisms of the president-elect were, “not helpful.” Her deputy premier Mike Ellis was quoted as saying, “The concerns that president-elect Trump has expressed regarding fentanyl are, quite frankly, the same concerns that I and the premier have had.” Smith and Ellis also criticized Ottawa’s progressively lenient approach to drug crimes.

(For what it’s worth, a recent Léger poll found that “Just 29 per cent of [Canadians] believe Trump’s concerns about illegal immigration and drug trafficking from Canada to the U.S. are unwarranted.” Perhaps that’s why some recent polls have found that Trudeau is currently less popular in Canada than Trump at the moment.)

Smith said that Trudeau’s criticisms of the president-elect were, “not helpful.” And on X/Twitter she said, “Now is the time to… reach out to our friends and allies in the U.S. to remind them just how much Americans and Canadians mutually benefit from our trade relationship – and what we can do to grow that partnership further,” adding, “Tariffs just hurt Americans and Canadians on both sides of the border. Let’s make sure they don’t happen.”

This is exactly the right approach. Smith knows there is a lot at stake in this fight, and is not willing to step into the ring in a fight that Canada simply can’t win, and will cause a great deal of hardship for all involved along the way.

While Trudeau indulges in virtue signaling and Ford in sabre rattling, Danielle Smith is engaging in true statesmanship. That’s something that is in short supply in our country these days.

As I’ve written before, Trump is playing chess while Justin Trudeau and Doug Ford are playing checkers. They should take note of Smith’s strategy. Honey will attract more than vinegar, and if the long history of our two countries tell us anything, it’s that diplomacy is more effective than idle threats.

Dan McTeague is President of Canadians for Affordable Energy.

Business

Canada needs to get serious about securing its border

Published on December 19, 2024

Todayville

From the Macdonald Laurier Institute

By Todd Hataley for Inside Policy

US President-elect Donald Trump has made clear his intention to call out Canada on weak enforcement on migration, money laundering, and the cross-border trafficking of narcotics, especially fentanyl.

Until just very recently, Canada has remained largely silent on these issues. Security agencies, such as the Royal Canadian Mounted Police (RCMP), Ontario Provincial Police (OPP), Sûreté du Québec (SQ) and the Canada Border Services Agency (CBSA), have tried to secure the border via memorandums of understanding, framework agreements, and legislated agreements that allow them to share information and even work together.

However, resources are limited for cross-border law enforcement co-operation. CBSA remains understaffed and RCMP Integrated Border Enforcement Teams (which work with US security agencies) have limited geographic reach, leaving much of the enforcement between ports of entry left to police of jurisdiction, who already are hard pressed to provide services to the communities they serve.

The Canadian government’s apparent strategy of largely ignoring the problem is becoming more difficult to maintain. With the United States Border Patrol intercepting increasing numbers of illegal migrants crossing into that country from Canada, it’s clear the porous border is a concern. Exacerbating the situation is the recent discovery of illegal narcotic super labs in Canada – where production far outstrips the market – and Canada’s unfortunate, albeit well-deserved reputation as a haven for global money launderers.

Thanks to Trump’s 25 per cent tariff threat, the crisis is now endangering Canada’s relationship with its largest and most-important trading partner. This announcement sent all sectors of government and the private sector into a frenzy, prompting Prime Minister Justin Trudeau to fly to Florida to seek out an early audience with Trump at his Mar-a-lago resort home. Trudeau’s team spun the trip as proof that the federal government is serious about working with the US to address its border security and public safety concerns.

But with political crises piling up, it will be difficult for Trudeau to also manage the political optics of kowtowing to Trump, who is widely unpopular among Canadians. Spending extra money to appease Trump during the ongoing housing, immigration, and health care crises could make the Trudeau’s popularity nosedive even further. Adding insult to injury, Trump is essentially demanding that Canada do America’s work by stopping illicit goods and people from entering the United States: customs and border security officials generally work on the principle of stopping goods from entering their country.

Trudeau faces many practical challenges, including the need to ramp up the number of border and law enforcement agents who have the skill sets and training required to police offences such as drug production, money laundering, and the cross-border smuggling of goods and humans. Purchasing helicopters and drones to conduct surveillance will do little to aid enforcement, since most goods smuggled across the border pass through legitimate border crossings. RCMP Commissioner Mike Duheme even suggested putting RCMP cadets along the border – a challenging proposition since vast swathes of the border are either wilderness or water. Surveillance is one thing, but the act of enforcement takes skilled people with the capacity to investigate, gather evidence, and articulate that evidence into something that can be used by the courts for convictions. These concerns are not being addressed in this current frenzy to spend money on border security.

There is also good evidence that fortifying the border, or what has become known as forward deployment along the border, does nothing to stop the cross-border transit of contraband goods and people. One need only look as far as the United States-Mexico border to see the failure of forward deployment.

As authorities increase border enforcement activities, the costs of smuggling goods and people mounts for criminals. Eventually, it drives out amateurs, leaving only the professional, skilled, and well-equipped criminal groups. This, in turn, often leads to increasing levels of violence along the border, making interdiction and disruption far more difficult for law enforcement agencies.

Canada has several clear options to address Trump’s border concerns. It can increase the staffing of frontline CBSA officers, including border agents, inland enforcement units that actively investigate and remove individuals from Canada, international liaison officers, and customs processing staff. It can also create a plan for CBSA to take over enforcement between ports of entry. Currently, CBSA enforces entry into Canada at the ports of entry and the RCMP are responsible for the areas in between. Having a single agency manage the border builds capacity and expertise, avoiding inter-bureaucracy competition and confusion.

Canada can also work to better integrate law enforcement, intelligence units, and border services at all levels of government and across international boundaries. Cross-border crime operations are often planned and execute far from the border.

Some of this already takes place, as noted above, but it needs to go much deeper and be more supportive at both institutional and individual levels. This process must also include private sector stakeholders: companies such as FedEx, UPS, and Amazon, as well as freight forwarders, trucking companies, and customs brokers, are all involved in cross-border trade. Their participation as partners in reducing cross-border criminal activity is essential.

Finally, the government needs to designate laws specific to cross-border crime and include meaningful penalties as a means of deterrence.

Hyper-focusing on the border while ignoring other aspects of cross-border crime may be good political optics, but it is a bad strategy. What we really need is functional enforcement – including an integrated process extended vertically and horizontally across all sectors of border stakeholders, at and away from the border, supported by strong policy and legislation. This is the path forward to better cross-border crime enforcement.

Dr. Todd Hataley is a professor in the School of Justice and Community Development at Fleming College. A retired member of the Royal Canadian Mounted Police, he worked as an investigator in organized crime, national security, cross-border crime, and extra-territorial torture. He is a contributor to the Macdonald-Laurier Institute.