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The Guilbeault – Trudeau Fallout: Canada’s Oil and Gas Emissions Cap is Under Fire from Experts and Business Leaders – Resource Works

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Steven Guilbeault, Canada’s environment and climate minister, at the COP28. Photo by AP.

By Resource Works

More News and Views From Resource Works Here

Prime Minister Justin Trudeau and his eco-extremist Minister of the Environment and Climate Change Steven Guilbeault are risking hundreds of billions of dollars of investments in Alberta’s and Canada’s economies and core social programs

The federal government’s proposed cap on emissions from oil and gas has now been outlined in a draft.

While Ottawa insists that it is not a cap on the production of oil and gas, experts fail to see how the emissions cap is not also a de facto production cap, given the details of the policy.

The industry fears that, in effect, that is just what it is — with negative impacts on western provinces that produce oil and gas for domestic use and for export.

The federal government proposes to limit emissions for oil and gas at 35% to 38% below the 2019 level. At the same time, Ottawa says the new rules would allow production to increase 12% above 2019 levels.

The producers are trying to figure out the ups and downs of the policy, and there is a lot to unpack. The federal draft “framework”  is open for discussion and consultation until February 2024.

The initial reaction from the Canadian Association of Petroleum Producers was that the emissions cap could result in “significant” production cuts, and it called the government’s emissions framework unnecessary. Alberta’s oil and gas sector has been invested in decarbonization efforts and measures to reduce methane emissions, already beating a target of a 45% reduction by 2025.

Alberta Premier Danielle Smith furiously flamed that “This announced de facto production cap on Alberta’s oil and gas sector amounts to an intentional attack by the federal government on the economy of Alberta and the financial well-being of millions of Albertans and Canadians. . . .

“With their pronouncement singling out the oil and gas sector alone for punitive federal treatment, Prime Minister Justin Trudeau and his eco-extremist Minister of the Environment and Climate Change Steven Guilbeault are risking hundreds of billions of dollars of investments in Alberta’s and Canada’s economies and core social programs, are devaluing the retirement investments of millions of Canadians, and are threatening the jobs of hundreds of thousands of Albertans.”

The Business Council of Canada hammered the cap as part of a “full-on charge against the oil and gas sector,” with no other industry so targeted by Ottawa. “It all seems punitive and short-sighted.”

The sectoral specificity is alarmingly pointed.

The Indigenous Resource Network also said it was disappointed by the emissions-cap announcement — and will seek an Indigenous exemption from the cap for Indigenous communities engaged in the oil and gas sector.

And Karen Ogen, CEO of the First Nations LNG Alliance, said from the COP28 climate conference in Dubai that the federal announcement is “disheartening” because of what resource projects mean to Indigenous people. “We’re being shoved aside again.”

The emissions cap follows the unravelling of the federal carbon tax. In the fall of 2023, the Federal Government made a number of exemptions and incentives, including removing the carbon tax from home heating in Atlantic Canada only. As Premiers in the rest of Canada voice their frustration, Saskatchewan even declared it will no longer collect the federal carbon tax at all.

Then the new national chief of the Assembly of First Nations, Cindy Woodhouse, said she ‘absolutely’ supports Ontario chiefs in a push for a review of federal carbon-pricing rules. The Ontario chiefs oppose the tax because they say it is not revenue neutral, especially for those on reserves, and because electric vehicles and heat pumps are neither available nor workable in many First Nations communities.

In the face of crumbling support for its policy agenda, Trevor Tombe of the University of Calgary saw in the new approach a softening of Ottawa’s enthusiasm for carbon taxes.

“I think it’s pretty clear that government is backing away from the carbon tax as a central pillar of their climate policy. And that means if you want to hit your target, you need to adopt other policies.”

Ergo, production (emissions) caps.

Debate continues over whether Canada is overdoing its climate measures, given that it produces only 1.5% of world emissions. And that Canada is the only top ten world oil producer that proposes such an emissions cap. None of the world’s other major oil producers have an emissions cap.

And then there’s the report from Canada’s independent parliamentary budget officer: “Canada’s own emissions are not large enough to materially impact climate change.”

He went on to say: “Consequently, Canada’s primary means of limiting the economic costs of climate change are through participation in a globally coordinated emissions reduction regime.”

LNG, anyone?

Whatever the final version of the regulatory cap looks like, we can expect to lose investment and economic activity, and the producing provinces, companies and their families can expect some pain.

That seems to be a trade-off that, to some extent, the federal government wants to make. But why is it going in this direction?

While some provinces like Quebec or Manitoba have incredible hydroelectric resources, and Ontario is Canada’s nuclear power leader, some provinces, especially in Western Canada, produce and consume oil and natural gas products.

BC produces natural gas in the northeast and is close to exporting LNG overseas. It is already contributing to transporting, refining and exporting oil that is produced elsewhere in the country.

These industries contribute to emissions, they cannot easily be phased out without serious implications for every aspect of how we live our lives. We rely on fossil fuels. So it’s not as simple as saying, “Let’s just get rid of it.”

Policy leaders globally are trying to resolve right now the question of what sacrifices and compromises are we willing to make in order to address climate change in a meaningful way; What is the rate of change and transformation that our economies are willing to accept? And that consumers — and voters — are willing to accept? What can we do without limiting human development in areas of the world where it’s still desperately needed?

We already have Ottawa’s carbon pricing (carbon taxation) scheme. The provinces have been given the opportunity to structure carbon pricing as they see fit, provided that it meets the baseline set by the federal government. Of course, not every province has wanted to do that.

Ottawa is signalling that they don’t think the carbon tax model has been working to meet the emissions (and electoral) targets that they’ve set. So now Ottawa has come up with this emissions backstop, what the feds call a cap-and-trade model for the oil and gas sector.

It’s fair to say that this scheme is a little bit more convoluted. It is going to limit industries. It will add consumer costs. It will cause even more confusion around energy. And we can certainly expect it to be challenged in court.

We’ve recently seen a number of federal environmental policies get kiboshed in courts on constitutional grounds, and criticized by judges across the country. Provincial governments have a tremendous stake in what goes on with natural resource development in their jurisdictions.

We don’t expect this issue of a federal emissions cap will be easily resolved. Look for it to be a very large part of the discussion around the next federal election.

All in all, there’s a lot of concern that, if the scheme is overly convoluted, industries could start to pull back. That could have a large impact on our ability to not only keep our economy strong and serve the interests of Canadians but also on our ability to invest in technologies that actually reduce emissions, like carbon capture or hydrogen.

Our Resource Works CEO, Stewart Muir, recently returned from the COP28 climate conference in Dubai. Among other things, he raised awareness of Canada’s role as a solutions provider to the world, from coal-displacing LNG to BC’s opportunity to become a major hydrogen energy hub.

We’ve made considerable progress in reducing emissions, especially in oil and gas. We have some of the most stringent regulations, not only on carbon and methane, but more broadly on, social and governance dimensions, how you manage local environmental concerns like water and land conservation, and protecting wildlife.

Canada has made huge progress at every level, and the energy sector is building new partnerships with Indigenous communities to ensure that they’re meaningfully included in land and environmental management and also in economic opportunities, including joint or sole ownership of projects.

We are part of addressing climate change and we are part of meeting the world’s energy needs sustainably, responsibly and reliably.

These are conversations that need to continue, and they need to inform our policy agenda as a country.

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Canada may escape the worst as Trump declares America’s economic independence with Liberation Day tariffs

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MXM logo  MxM News

Quick Hit:

On Wednesday, President Trump declared a national emergency to implement a sweeping 10% baseline tariff on all imported goods, calling it a “Declaration of Economic Independence.” Trump said the tariffs would revitalize the domestic economy, declaring that, “April 2, 2025, will forever be remembered as the day American industry was reborn.”

Key Details:

  • The baseline 10% tariff will take effect Saturday, while targeted “reciprocal” tariffs—20% on the EU, 24% on Japan, and 17% on Israel—begin April 9th. Trump also imposed 25% tariffs on most Canadian and Mexican goods, as well as on all foreign-made cars and auto parts, effective early Thursday.

  • Trump justified the policy by citing foreign trade restrictions and long-standing deficits. He pointed to policies in Australia, the EU, Japan, and South Korea as examples of protectionist barriers that unfairly harm American workers and industries.

  • The White House estimates the 10% tariff could generate $200 billion in revenue over the next decade. Officials say the added funds would help reduce the federal deficit while giving the U.S. stronger leverage in negotiations with countries running large trade surpluses.

Diving Deeper:

President Trump on Wednesday unveiled a broad new tariff policy affecting every imported product into the United States, marking what he described as the beginning of a new economic era. Declaring a national emergency from the White House Rose Garden, the president announced a new 10% baseline tariff on all imports, alongside steeper country-specific tariffs targeting longstanding trade imbalances.

“This is our Declaration of Economic Independence,” Trump said. “Factories will come roaring back into our country — and you see it happening already.”

The tariffs, which take effect Saturday, represent a substantial increase from the pre-Trump average U.S. tariff rate and are part of what the administration is calling “Liberation Day” for American industry. Reciprocal tariffs kick in April 9th, with the administration detailing specific rates—20% for the European Union, 24% for Japan, and 17% for Israel—based on calculations tied to bilateral trade deficits.

“From 1789 to 1913, we were a tariff-backed nation,” Trump said. “The United States was proportionately the wealthiest it has ever been.” He criticized the establishment of the income tax in 1913 and blamed the 1929 economic collapse on a departure from tariff-based policies.

To underscore the move’s long-anticipated nature, Trump noted he had been warning about unfair trade for decades. “If you look at my old speeches, where I was young and very handsome… I’d be talking about how we were being ripped off by these countries,” he quipped.

The president also used the moment to renew his push for broader economic reforms, urging Congress to eliminate federal taxes on tips, overtime pay, and Social Security benefits. He also proposed allowing Americans to write off interest on domestic auto loans.

Critics of the plan warned it could raise prices for consumers, noting inflation has already risen 22% under the Biden administration. However, Trump pointed to low inflation during his first term—when he imposed more targeted tariffs—as proof his strategy can work without sparking runaway costs.

White House officials reportedly described the new baseline rate as a guardrail against countries attempting to game the system. One official explained the methodology behind the reciprocal tariffs: “The trade deficit that we have with any given country is the sum of all trade practices, the sum of all cheating,” adding that the tariffs are “half of what they could be” because “the president is lenient and he wants to be kind to the world.”

In addition to Wednesday’s sweeping changes, Trump’s administration recently imposed a 25% tariff on Chinese goods tied to fentanyl smuggling and another 25% on steel and aluminum imports—revoking previous carve-outs for countries like Brazil and South Korea. Future tariffs on semiconductors, pharmaceuticals, and raw materials such as copper and lumber are reportedly under consideration.

Trump closed his remarks with a message to foreign leaders: “To all of the foreign presidents, prime ministers, kings, queens, ambassadors… I say, ‘Terminate your own tariffs, drop your barriers.’” He declared April 2nd “the day America’s destiny was reclaimed” and promised, “This will indeed be the golden age of America.”

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2025 Federal Election

Three cheers for Poilievre’s alcohol tax cut

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By Franco Terrazzano

The Canadian Taxpayers Federation applauds Conservative Party Leader Pierre Poilievre’s commitment to end and reverse the alcohol escalator tax.

“Poilievre just promised major alcohol tax cuts and taxpayers will cheers to that,” said Franco Terrazzano, CTF Federal Director. “Poilievre’s tax cut will save Canadians money every time they have a cold one with a buddy or enjoy a glass of Pinot with their better half and it will give Canadians brewers, distillers and wineries a fighting chance against tariffs.”

Today, federal alcohol taxes increased by two per cent, costing taxpayers about $40 million this year, according to Beer Canada.

Poilievre announced a Conservative government “will axe the escalator tax on wine, beer and spirits back to 2017 levels, ending the automatic annual tax increases.”

The alcohol escalator tax has automatically increased excise taxes on beer, wine and spirits every year, without a vote in Parliament, since 2017. The alcohol escalator tax has cost taxpayers more than $900 million since being imposed, according to Beer Canada.

Taxes from multiple levels of government account for about half of the price of alcohol.

Meanwhile, tariffs are hitting the industry hard. Brewers have described the tariffs as “Armageddon for craft brewing.”

“Automatic tax hikes are undemocratic, uncompetitive and unaffordable and they need to stop,” Terrazzano said. “If politicians think Canadians aren’t paying enough tax, they should at least have the spine to vote on the tax increase.

“Poilievre is right to end the escalator tax and all party leaders should commit to making life more affordable for Canadian consumers and businesses by ending the undemocratic alcohol tax hikes.”

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