From Canadians for Affordable Energy

Even if it fails to hit its emissions targets (which it will,) the economic consequences of enacting this plan are very serious. It would make Canada the only country in the world which willingly and purposefully stifles its single largest revenue stream. 

At this point, everyone in Canada has heard about the Carbon Tax and had a chance to experience its negative effects. But less has been said about another harmful policy dreamed up by the Trudeau government — the Emissions Cap on the oil and gas sector. Just like the Carbon Tax, the Emissions Cap is part of Trudeau’s larger program to try and achieve “Net Zero” greenhouse gas (GHG) emissions by 2050, which will have no positive impact on the environment, but which will be ruinous to Canada’s natural resource sector and to the national economy.

In their 2021 platform, the Liberals made a commitment to “cap and cut emissions from the oil and gas sector” and proclaimed that that industry must reduce emissions “at a pace and scale needed to achieve net-zero by 2050.” As promised, in December 2023 the Trudeau government proposed an Emissions Cap to reduce GHG emissions in the oil and gas sector by 42 percent by 2030. Keep in mind Canada contributes only 1.5% of global emissions, so this plan, even if accomplished, would reduce global emissions by less than one half of one percent.

Even if it fails to hit its emissions targets (which it will,) the economic consequences of enacting this plan are very serious. It would make Canada the only country in the world which willingly and purposefully stifles its single largest revenue stream. After all, the oil and gas industry generates $45 billion per year in annual economic activity, and contributes $170 billion per year to the GDP.

But don’t take my word for it. According to a Deloitte report commissioned by the Government of Alberta, an Emissions Cap would lead to a 10% decrease in Alberta’s oil production and a 16% decrease in conventional natural gas production. Fossil fuel production would decrease in B.C., Saskatchewan, and Newfoundland as well. Other industries connected to the oil and gas sector such as the mining, refinery products, and utilities are also expected to be impacted and will experience a decrease in output in Alberta and the rest of Canada.

The report goes on to state that in 2040 “Alberta’s GDP is estimated to be lower by 4.5% and Canada’s GDP by 1.0% compared to the baseline.”

It notes that because it is assumed that “the Cap is a permanent measure, the shift in the output of the oil and gas sector and associated losses are permanent and accumulate over time. Cumulatively, over the 2030 to 2040 period, we estimate that real GDP in Alberta is $191 billion lower and real GDP in the Rest of Canada is $91 billion lower, compared to the baseline scenario ($2017 dollars).”

Of course, the environmentalists will crow that the oil and gas industry is dying anyway and the demand for oil and gas around the world is slowly decreasing, but this is simply not true.

Global demand for oil and gas is only growing and will continue to do so. According to the report, “Based on current policy and before the impact of the Cap, we expect: Oil production in Canada to increase by 27% by 2030 and 32% by 2040 from 2021 levels; and Gas production in Canada to increase by 10% by 2030 and 16% by 2040 from 2021 levels.”

And this isn’t the only study which projects negative outcomes from this policy. The Montreal Economic Institute (MEI) released a study which describes how the Trudeau government’s proposed Emissions Cap for the energy sector would “cost the Canadian economy between $44.8 billion and $79.3 billion a year” and would “cause substantial losses, without achieving any net reduction in global emission.”

You can read the study here.

Plus it is worth noting that this emissions cap will result in “substantial losses without achieving any net reduction in global emissions.”

Why? Because of the increase in global demands for oil and gas, we can either produce those resources here or get them from another country that has no environmental, much less labour standards, such as Russia, Venezuela, and Iran.

To add insult to injury for the oil and gas producing provinces, and as I’ve pointed out in the past, this cap on emissions would apply only to the oil and gas sector. This emissions cap would not apply to the concrete industry, the automotive industry, or the mining industry. And — surprise surprise — it certainly won’t apply to Montreal’s lucrative jet-building industry.

But take heed: this isn’t simply an Alberta issue. This is a Canadian issue and one that everyone in Canada should be concerned about.

The umbrella of Net Zero by 2050 is large and far reaching, and an emissions cap is simply one part of a multi-layered attack on our economy and way of life. Carbon taxes, layered on top of a Clean Fuel Standard, layered on top of pipeline blockages, layered on top of Bills C-48 and C-69, preventing oil from being shipped from other parts of the world — will run counter to our national interests, and endanger the Canadian way of life for generations to come.

If Canadians are now vehemently opposed to carbon taxes, as we suggested would be the case half a dozen years ago, wait for this unnecessary burden to befall them.

In the words made famous by the Canadian rock legend BTO, “You ain’t seen nothing yet!”

Dan McTeague is President of Canadians for Affordable Energy.

From Resource Works

Singh… somehow has failed to correct his original post.

National NDP leader Jagmeet Singh earns a new mark for his business mathematics — though his subject is better called “mythematics.” He gets an F for his declaration that Cenovus Energy had record profits of $37 billion in 2023.

He began with this post on X (Twitter): “Last year, Cenovus raked in $37 billion in profits. And a whopping $64 billion in 2022. Big Oil is making record profits, burning the planet AND asking for massive public handouts. It’s time to end the free ride for oil and gas.”

Readers quickly hit back: “Per Cenovus’ own 2023 Financial Year report, profits were $4.11 billion CAD, down 36% from 2022. Mr. Singh conflates revenue (which includes no expenses, government fees, or taxes) with profit.”

Some pointed to Cenovus’s own figures:
Revenue: CA$52.2b (down 22% from FY 2022)
Net income: CA$4.11b (down 36% from FY 2022)
Profit margin: 7.9% (down from 9.6% in FY 2022)

Heather Exner-Pirot of the Macdonald-Laurier Institute, and special adviser to the Business Council of Canada, added: “Not sure why Singh would just make up numbers? Anyone can look up their annual financial results. There was no $37 billion in profits. Although if they did have that kind of year, it would be great for Albertan royalties and Canadian business taxes.”

She included a link to Cenovus’s 2023 annual report. Singh, though, somehow has failed to correct his original post.

The NDP leader’s earnings from Parliament now run at $271,700 a year. But under his strange “mythematics,” as applied to Cenovus, he presumably has no expenses and pays no taxes, so that $271,700 is all “profit.” Nice…

Pity that the average Canadian, whose gross income in 2023 was $64,850, has to pay out living expenses such as accommodation, food, and taxes to assorted governments. That’s realistic mathematics, not mythematics.

And that average Canadian does not have Parliament to pick up such expenses as Singh racked up from April 1 to June 30: travel, $28,304; hospitality, $3,319; and contract, $38,053.

In his support for the Trudeau Liberal government, we see Singh’s “mythematics” at work again. As the small-c conservative Fraser Institute points out: the Trudeau government’s recent fiscal record includes unprecedented levels of spending and debt.

“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% higher than during the 2008-09 financial crisis and 28.7% 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), 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% more than in 1995 when Canada reached a near-debt crisis.”

The New Democrats back the Liberals on confidence and budgetary votes in Parliament, in exchange for concessions on key political priorities. When it came to the current budget, the government included things Singh’s NDP supports, such as funding for pharmacare and a national school lunch program.

But Singh withheld support for the budget for two weeks, saying it didn’t provide adequate funding for a new disability benefit or for Indigenous communities. In the end, he did vote for the budget, and thus those fiscal issues raised by the Fraser Institute. Singh did not disclose if he has been offered Liberal solutions down the road to his concerns.

All a question of “mythematics,” we assume.