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MacDonald Laurier Institute

More racism isn’t the solution for racism

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12 minute read

From the Macdonald Laurier Institute

By David L. Thomas for Inside Policy

If Canada decided long ago that it is morally wrong to discriminate based on race, why is it suddenly okay now in BC?

Sometimes our solutions to problems have the feature of exacerbating them and making conditions worse for the very people we intended to help.

The latest candidate is the British Columbia government’s proposed Bill 23, the Anti-Racism Act. The Bill arises from the 2022 Anti-Racism Data Act and the follow-up 2023 Anti-Racism Legislation Questionnaire Summary Report (the Report).

The Bill raises two questions: Does systemic racism really exist? If it does, is the Anti-Racism Act the right solution – or will it make matters worse?

On the first question, let’s draw a clear distinction between allegations of “racism” and “systemic racism.” Racism is about an incident that amounts to discrimination based on someone’s race. Systemic racism suggests not merely the presence of particular incidents of racism, but rather, something baked into the “system” that results in the discrimination of a person or group based on their race.

There are, without question, examples of systemic racism in our history, such as laws that were overtly racist in their nature. For example, we once allowed restrictive covenants in BC on land titles that prohibited property ownership by certain races. We look back on those examples today with disgust. Since those days we have implemented long-standing, honourable anti-discrimination laws that state that no one should be judged by their physical or mental characteristics. We all come into the world with certain attributes that will be with us for life. We concluded a long time ago that it is morally wrong to discriminate against a person based on such attributes.

Interestingly, the Report does not provide any examples of systemic racism. In fact, the Report admits that in its public questionnaire, the highest response was denial that systemic racism exists. The Report acknowledges that there was “a consistent theme” of denial of systemic racism and racial trauma across all demographic groups. The fact that all demographic groups question the existence is raised in another section of the Report: “In the analysis of comments, the ways in which respondents expressed denialism were not noticeably different across ethnic groups.”

Not to be dissuaded by responses that systemic racism doesn’t exist, the Report explains away “denialism” as being the result of the respondents’ anti-diversity, overt racism, implied racism, victimhood, and naïveté. The Report even suggests that denialism is a problem to be dealt with: “Denial of systemic racism was found across ethnicities, suggesting the need for a closer look at foundational drivers of culture, how those persist, and what can dismantle it.”

Notwithstanding the uncertain answer to our first question, the first principle in the Anti-Racism Act broadly asserts: “systemic racism, systemic racism specific to Indigenous peoples and racial inequity are harming individuals and communities in British Columbia and require urgent action.” And yet, nowhere in the Anti-Racism Act is there evidence or examples of systemic racism or an indication of where it can be found.

Nevertheless, let’s give the BC government the benefit of the doubt and conclude that systemic racism does exist. Why do they need to create a whole new bureaucracy with endless reports and action plans? Why don’t they go straight to those laws and policies that result in adverse differential treatment of others based on nothing more than their race and repeal them? The NDP has a majority government. What is it waiting for? The solution should be simple.

Unfortunately, the NDP solution is the Anti-Racism Act, which sets out to do something different. Rather ironically, the law in fact establishes adverse differential treatment of people based on their race. It contains several racially discriminatory clauses and mandates. An obvious example is Section 5, which establishes a Provincial Committee on Anti-Racism. However, to be a member of said Committee, one must “racialized” which, we are left to presume, means you cannot be white. Apparently, the BC government has decided to exclude the insights and opinions of an entire group of people based solely on the colour of their skin.

The Anti-Racism Act will require all public bodies to set race-based recruitment and advancement targets to ensure “racialized individuals” are hired and promoted to senior levels. Under this law, such racial discrimination is not only permissible, but also mandated. It will be lawful to racially discriminate against certain people pursuing their career ambitions, even though, like their “racialized” friends, they did not have any choice to be born with certain immutable characteristics.

All of this is permissible under the Charter of Rights and Freedoms even though Section 15(1) guarantees that everyone has the right to equal protection and equal benefit of the law without discrimination. However, Section 15(2) goes on to say it’s okay to ignore the previous section if you make an unequal law for the “amelioration of conditions of disadvantaged individuals or groups including those that are disadvantaged because of race….” etc.

Lawmakers should always ask themselves the question: this may seem like a good idea today, but will it seem like a good idea 50 years from now? I am sure those lawmakers who permitted racist covenants on land titles thought it was a good idea at the time. Is mandating a new form of reverse-racism today really a good idea in the long run? The racial demographics in Canada are rapidly changing. Some academics foresee white people becoming the minority in Canada as early as 2050. Will the Anti-Racism Act endure as a socially just and morally defensible law when the racial structure of Canadian society is fundamentally different than it is today?

The latest data from Statistics Canada shows that people of South Korean, Japanese, and South Asian descent tend to be the top earners in Canada, broadly speaking. While Latin-American and Black people are often among the lowest earners, white people are mostly in the middle of the pack. If the goal of the Anti-Racism Act is to advance racial equity, why does it contravene its second principle – “actions to … advance racial equity … should be informed by data” – by ignoring the data?

If Canada decided long ago that it is morally wrong to discriminate based on race, why is it suddenly okay now in BC? How is this morally justified? And, who decides which groups are advantaged or disadvantaged under the Charter? Will those determinations change over time, or will legal privileges based on race be owned indefinitely?

In my years as a human rights adjudicator and mediator, I often heard the allegation of “systemic racism,” but no one was able to clearly point to it when asked. I was not expected to ask such questions, but to just accept its existence as a given fact. It would be impolite to ask if there could be other reasons for disparate outcomes. Best to leave it to something invisible, that we all just agree is there, without having to point a finger to a person or an identifiable policy that might counter back. And yet, the Statistics Canada data, showing striking income differences within the visible minority cohort, tells us there is something more going on here.

I doubt the Anti-Racism Act will ever resolve the disparate outcomes that it targets. I fear it will make outcomes worse. The Anti-Racism Act contemplates anti-racism training in public bodies and the Report suggests education in our schools, presumably to educate everyone about Canada’s racist nature and unequal outcomes being based on systemic racism. It’s easy to blame something you cannot see for the outcomes you don’t like. The problem with blaming disparate outcomes solely on this invisible “systemic racism” is that it detracts from and negates other obvious causes of disparity. This is not how racial equity will be advanced. It is not how to teach our children to advance themselves or to create a more just society. It is more likely to have the opposite effect because problems never get solved when the cause is wrongly identified.

Anti-racism activists want to fight discrimination with racism. Ironically, it will only beget more racism in the long run. The more we see acceptable and overt racism in the law the more we will see the normalization of racism. It will make life for certain visible minorities and Indigenous peoples worse by further dividing society. People will naturally segregate to protect themselves when the laws make some more equal than others. Is that the outcome we desire?

The BC government seems determined to abandon principles of equality, to ignore uncomfortable data, and to force a racist and society-dividing solution onto a problem that people, of all backgrounds, don’t even agree exists.

David L. Thomas is a lawyer and mediator in British Columbia and a Senior Fellow with the Macdonald-Laurier Institute. From 20142021, he served as the Chairperson of the Canadian Human Rights Tribunal in Ottawa.

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Alberta

‘Far too serious for such uninformed, careless journalism’: Complaint filed against Globe and Mail article challenging Alberta’s gender surgery law

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Macdonald-Laurier Institute

Macdonald Laurier Institute challenges Globe article on gender medicine

The complaint, now endorsed by 41 physicians, was filed in response to an article about Alberta’s law restricting gender surgery and hormones for minors.

On June 9, the Macdonald-Laurier Institute submitted a formal complaint to The Globe and Mail regarding its May 29 Morning Update by Danielle Groen, which reported on the Canadian Medical Association’s legal challenge to Alberta’s Bill 26.

Written by MLI Senior Fellow Mia Hughes and signed by 34 Canadian medical professionals at the time of submission to the Globe, the complaint stated that the Morning Update was misleading, ideologically slanted, and in violation the Globe’s own editorial standards of accuracy, fairness, and balance. It objected to the article’s repetition of discredited claims—that puberty blockers are reversible, that they “buy time to think,” and that denying access could lead to suicide—all assertions that have been thoroughly debunked in recent years.

Given the article’s reliance on the World Professional Association for Transgender Health (WPATH), the complaint detailed the collapse of WPATH’s credibility, citing unsealed discovery documents from an Alabama court case and the Cass Review’s conclusion that WPATH’s guidelines—and those based on them—lack developmental rigour. It also noted the newsletter’s failure to mention the growing international shift away from paediatric medical transition in countries such as the UK, Sweden, and Finland. MLI called for the article to be corrected and urged the Globe to uphold its commitment to balanced, evidence-based journalism on this critical issue.

On June 18, Globe and Mail Standards Editor Sandra Martin responded, defending the article as a brief summary that provided a variety of links to offer further context. However, the three Globe and Mail news stories linked to in the article likewise lacked the necessary balance and context. Martin also pointed to a Canadian Paediatric Society (CPS) statement linked to in the newsletter. She argued it provided “sufficient context and qualification”—despite the fact that the CPS itself relies on WPATH’s discredited guidelines. Notwithstanding, Martin claimed the article met editorial standards and that brevity justified the lack of balance.

MLI responded that brevity does not excuse misinformation, particularly on a matter as serious as paediatric medical care, and reiterated the need for the Globe to address the scientific inaccuracies directly. MLI again called for the article to be corrected and for the unsupported suicide claim to be removed. As of this writing, the Globe has not responded.

Letter of complaint

June 9, 2025

To: The Globe and Mail
Attn: Sandra Martin, standards editor
CC: Caroline Alphonso, health editor; Mark Iype, deputy national editor and Alberta bureau chief

To the editors;

Your May 29 Morning Update: The Politics of Care by Danielle Groen, covering the Canadian Medical Association’s legal challenge to Alberta’s Bill 26, was misleading and ideologically slanted. It is journalistically irresponsible to report on contested medical claims as undisputed fact.

This issue is far too serious for such uninformed, careless journalism lacking vital perspectives and scientific context. At stake is the health and future of vulnerable children, and your reporting risks misleading parents into consenting to irreversible interventions based on misinformation.

According to The Globe and Mail’s own Journalistic Principles outlined in its Editorial Code of Conduct, the credibility of your reporting rests on “solid research, clear, intelligent writing, and maintaining a reputation for honesty, accuracy, fairness, balance and transparency.” Moreover, your principles go on to state that The Globe will “seek to provide reasonable accounts of competing views in any controversy.” The May 29 update violated these principles. There is, as I will show, a widely available body of scientific information that directly contests the claims and perspectives presented in your article. Yet this information is completely absent from your reporting.

The collapse of WPATH’s credibility

The article’s claim that Alberta’s law “falls well outside established medical practice” and could pose the “greatest threat” to transgender youth is both false and inflammatory. There is no global medical consensus on how to treat gender-distressed young people. In fact, in North America, guidelines are based on the Standards of Care developed by the World Professional Association for Transgender Health (WPATH)—an organization now indisputably shown to place ideology above evidence.

For example, in a U.S. legal case over Alabama’s youth transition ban, WPATH was forced to disclose over two million internal emails. These revealed the organization commissioned independent evidence reviews for its latest Standards of Care (SOC8)—then suppressed those reviews when they found overwhelmingly low-quality evidence. Yet WPATH proceeded to publish the SOC8 as if it were evidence-based. This is not science. It is fraudulent and unethical conduct.

These emails also showed Admiral Rachel Levine—then-assistant secretary for Health in the Biden administration—pressured WPATH to remove all lower age recommendations from the guidelines—not on scientific grounds, but to avoid undermining ongoing legal cases at the state level. This is politics, not sound medical practice.

The U.K.’s Cass Review, a major multi-year investigation, included a systematic review of the guidelines in gender medicine. A systematic review is considered the gold standard because it assesses and synthesizes all the available research in a field, thereby reducing bias and providing a large comprehensive set of data upon which to reach findings. The systematic review of gender medicine guidelines concluded that WPATH’s standards of care “lack developmental rigour” and should not be used as a basis for clinical practice. The Cass Review also exposed citation laundering where medical associations endlessly recycled weak evidence across interlocking guidelines to fabricate a false consensus. This led Cass to suggest that “the circularity of this approach may explain why there has been an apparent consensus on key areas of practice despite the evidence being poor.”

Countries like SwedenFinland, and the U.K. have now abandoned WPATH and limited or halted medicalized youth transitions in favour of a therapy-first approach. In Norway, UKOM, an independent government health agency, has made similar recommendations. This shows the direction of global practice is moving away from WPATH’s medicalized approach—not toward it. As part of any serious effort to “provide reasonable accounts of competing views,” your reporting should acknowledge these developments.

Any journalist who cites WPATH as a credible authority on paediatric gender medicine—especially in the absence of contextualizing or competing views—signals a lack of due diligence and a fundamental misunderstanding of the field. It demonstrates that either no independent research was undertaken, or it was ignored despite your editorial standards.

Puberty blockers don’t ‘buy time’ and are not reversible

Your article repeats a widely debunked claim: that puberty blockers are a harmless pause to allow young people time to explore their identity. In fact, studies have consistently shown that between 98 per cent and 100 per cent of children placed on puberty blockers go on to take cross-sex hormones. Before puberty blockers, most children desisted and reconciled with their birth sex during or after puberty. Now, virtually none do.

This strongly suggests that blocking puberty in fact prevents the natural resolution of gender distress. Therefore, the most accurate and up-to-date understanding is that puberty blockers function not as a pause, but as the first step in a treatment continuum involving irreversible cross-sex hormones. Indeed, a 2022 paper found that while puberty suppression had been “justified by claims that it was reversible … these claims are increasingly implausible.” Again, adherence to the Globe’s own editorial guidelines would require, at minimum, the acknowledgement of the above findings alongside the claims your May 29 article makes.

Moreover, it is categorically false to describe puberty blockers as “completely reversible.” Besides locking youth into a pathway of further medicalization, puberty blockers pose serious physical risks: loss of bone densityimpaired sexual developmentstunted fertility, and psychosocial harm from being developmentally out of sync with peers. There are no long-term safety studies. These drugs are being prescribed to children despite glaring gaps in our understanding of their long-term effects.

Given the Globe’s stated editorial commitment to principles such as “accuracy,” the crucial information from the studies linked above should be provided in any article discussing puberty blockers. At a bare minimum, in adherence to the Globe’s commitment to “balance,” this information should be included alongside the contentious and disputed claims the article makes that these treatments are reversible.

No proof of suicide prevention

The most irresponsible and dangerous claim in your article is that denying access to puberty blockers could lead to “depression, self-harm and suicide.” There is no robust evidence supporting this transition-or-suicide narrative, and in fact, the findings of the highest-quality study conducted to date found no evidence that puberty suppression reduces suicide risk.

Suicide is complex and attributing it to a single cause is not only false—it violates all established suicide reporting guidelines. Sensationalized claims like this risk creating contagion effects and fuelling panic. In the public interest, reporting on the topic of suicide must be held to the most rigorous standards, and provide the most high-quality and accurate information.

Euphemism hides medical harm

Your use of euphemistic language obscures the extreme nature of the medical interventions being performed in gender clinics. Calling double mastectomies for teenage girls “paediatric breast surgeries for gender-affirming reasons” sanitizes the medically unnecessary removal of a child’s healthy organs. Referring to phalloplasty and vaginoplasty as “gender-affirming surgeries on lower body parts” conceals the fact that these are extreme operations involving permanent disfigurement, high complication rates, and often requiring multiple revisions.

Honest journalism should not hide these facts behind comforting language. Your reporting denies youth, their parents, and the general public the necessary information to understand the nature of these interventions. Members of the general public rely greatly on the news media to equip them with such information, and your own editorial standards claim you will fulfill this core responsibility.

Your responsibility to the public

As a flagship Canadian news outlet, your responsibility is not to amplify activist messaging, but to report the truth with integrity. On a subject as medically and ethically fraught as paediatric gender medicine, accuracy is not optional. The public depends on you to scrutinize claims, not echo ideology. Parents may make irreversible decisions on behalf of their children based on the narratives you promote. When reporting is false or ideologically distorted, the cost is measured in real-world harm to some of our society’s most vulnerable young people.

I encourage the Globe and Mail to publish an updated version on this article in order to correct the public record with the relevant information discussed above, and to modify your reporting practices on this matter going forward—by meeting your own journalistic standards—so that the public receives balanced, correct, and reliable information on this vital topic.

Trustworthy journalism is a cornerstone of public health—and on the issue of paediatric gender medicine, the stakes could not be higher.

Sincerely,

Mia Hughes
Senior Fellow, Macdonald-Laurier Institute
Author of The WPATH Files

The following 41 physicians have signed to endorse this letter:
Dr. Mike Ackermann, MD
Dr. Duncan Veasey, Psy MD
Dr. Rick Gibson, MD
Dr. Benjamin Turner, MD, FRCSC
Dr. J.N. Mahy, MD, FRCSC, FACS
Dr. Khai T. Phan, MD, CCFP
Dr. Martha Fulford, MD
Dr. J. Edward Les, MD, FRCPC
Dr. Darrell Palmer, MD, FRCPC
Dr. Jane Cassie, MD, FRCPC
Dr. David Lowen, MD, FCFP
Dr. Shawn Whatley, MD, FCFP (EM)
Dr. David Zitner, MD
Dr. Leonora Regenstreif, MD, CCFP(AM), FCFP
Dr. Gregory Chan, MD
Dr. Alanna Fitzpatrick, MD, FRCSC
Dr. Chris Millburn, MD, CCFP
Dr. Julie Curwin, MD, FRCPC
Dr. Roy Eappen, MD, MDCM, FRCP (c)
Dr. York N. Hsiang, MD, FRCSC
Dr. Dion Davidson, MD, FRCSC, FACS
Dr. Kevin Sclater, MD, CCFP (PC)
Dr. Theresa Szezepaniak, MB, ChB, DRCOG
Dr. Sofia Bayfield, MD, CCFP
Dr. Elizabeth Henry, MD, CCFP
Dr. Stephen Malthouse, MD
Dr. Darrell Hamm, MD, CCFP
Dr. Dale Classen, MD, FRCSC
Dr. Adam T. Gorner, MD, CCFP
Dr. Wesley B. Steed, MD
Dr. Timothy Ehmann, MD, FRCPC
Dr. Ryan Torrie, MD
Dr. Zachary Heinricks, MD, CCFP
Dr. Jessica Shintani, MD, CCFP
Dr. Mark D’Souza, MD, CCFP(EM), FCFP*
Dr. Joanne Sinai, MD, FRCPC*
Dr. Jane Batt, MD*
Dr. Brent McGrath, MD, FRCPC*
Dr. Leslie MacMillan MD FRCPC (emeritus)*
Dr. Ian Mitchell, MD, FRCPC*
Dr. John Cunnington, MD

*Indicates physician who signed following the letter’s June 9 submission to the Globe and Mail, but in advance of this letter being published on the MLI website.

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Alberta

High costs, low returns – Canada’s wildly expensive emissions cap

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CNAPS.org

In this new commentary, Director of Energy, Natural Resources, and Environment Heather Exner-Pirot reveals why the Canadian government’s oil and gas emissions cap isn’t just expensive – it’s economic insanity.

While Canadians complained about the country’s C$80 carbon tax, the federal government is quietly preparing a climate policy that costs between C$96,000 and C$289,000 per tonne of carbon actually reduced. That’s not a typo.
 
Canada’s proposed emissions cap on oil and gas would destroy over 40,000 jobs and slash C$20.5 billion from the Canadian economy – all while barely denting global emissions. Why? Because cleaner Canadian energy will simply be replaced by dirtier oil from Venezuela, Iraq, and Mexico. This will also greatly impact the United States, which relies heavily on Canadian oil to fuel its economy.
 
Canadian oil sands have slashed their emissions per barrel by 30 per cent since 2013, outperforming global competitors. The country’s conventional oil and gas are actually cleaner than world averages. Yet this policy punishes Canada’s best-in-class industry while handing market share to higher-polluting foreign producers. The result? Global emissions could actually increase while Canada’s energy sector gets kneecapped.
 
This isn’t climate policy – it’s economic self-sabotage disguised as environmental virtue. There has to be a better way to build Canada’s – and America’s – energy future.

By Heather Exner-Pirot

Canada is the world’s third-largest exporter of oil, fourth-largest producer, and top source of imports to the United States. Much of Canada’s oil wealth is concentrated in the oil sands in northern Alberta, which hosts 99 percent of the country’s enormous oil endowment: about 160 billion barrels of proven reserves, of a total resource of approximately 1.8 trillion barrels. This is the major source of oil to the United States refinery complex, a large part of which is optimized for the oil sands’ heavy oil.

Reliability of energy supply has remerged as a major geopolitical issue. Canadian oil and gas is an essential component of North American energy security. Yet a proposed cap on emissions from the sectors promises to cut Canadian production and exports in the years ahead. It would be hard to provide less environmental benefit for a higher economic and security cost. There are far better ways to reduce emissions while maintaining North America’s security of energy supply.

The high cost of the cap

In 1994 a Liberal federal government, Alberta provincial conservative government and representatives from the oil and gas industry, working together through the national oil sands task force, developed A New Energy Vision for Canada. Their efforts turned what was then a middling resource into a trillion dollar nation-building project. Production has increased tenfold since the report came out.

The task force acknowledged the need for industry to “put its best efforts toward … reducing greenhouse gas emissions.” However, it also expected governments to “understand” that there “is no benefit to Canada or to the environment to have production and value-added processing done outside of the country in less efficient jurisdictions … policies set by regulator must not result in discouraging oil sands production.”

As part of its efforts to meet its climate goals under the Paris Accord, the Canadian government proposed a regulatory framework for an emissions cap on the oil and gas sector in December 2023. It set a legally binding limit on greenhouse gas emissions, targeting a 35 to 38 percent reduction from 2019 levels by 2030 for upstream operations, through regulations to be made under the Canadian Environmental Protection Act, 1999 (CEPA).

The federal government has not yet finalized its proposed regulations. However, industry experts and economists have criticized the current iteration as logistically unworkable, overly expensive, and likely to be challenged as unconstitutional. In effect, this policy layers a cap-and-trade system for just one sector (oil and gas) on top of a competing carbon pricing mechanism (the large-emitter trading systems, often referred to as the industrial carbon price), a discriminatory practice that also undermines the entire economic rationale of a carbon pricing system.

While the Canadian government has maintained that it is focused on reducing emissions rather than production – the latter of which would put it at odds with provincial jurisdiction over non-renewable resources – a series of third party analyses as well as the Parliamentary Budget Office’s own impact assessment find it would indeed constrain Canadian oil and gas production. The economic cost of the emissions cap far exceeds any corresponding benefit in reduced emissions.

How much will the emissions cap cost in terms of dollar per tonne of carbon in avoided emissions, both domestically and globally? Based solely on the cost to the Canadian economy, we estimate the emission cap is equivalent to a C$2,887/tonne carbon price by 2032.

Assuming no impact on global demand and full substitution by non-Canadian crudes, it finds that the cost of each tonne of carbon displaced globally is between C$96,000 to C$289,000 for oil sands bitumen production. For displaced Canadian conventional and natural gas, the cost is infinite, i.e. global emissions would actually be higher for every barrel or unit of Canadian oil and gas displaced with competitor products as a result of the emissions cap.

Canadian oil and gas emissions reduction efforts

The oil and gas sector is the highest emitting economic sector in Canada. However, it has made substantial efforts to reduce emissions over the past two decades and is succeeding. Absolute emissions in the sector peaked in 2014, despite production growing by over a million barrels of oil equivalent since (see Figure 1).

Figure 1 Indexed greenhouse gas (GHG) emissions (and gross domestic product (GDP) at basic prices, for the oil and gas extraction industry, 2009 to 2022 (2009 = 100). Source: Statistics Canada 2024.

Much of this success can be attributed to methane capture, particularly in the natural gas and conventional oil sectors, where absolute emissions peaked in 2007 and 2014 respectively.

Since 2014, the oil sands have dramatically increased production by over a million barrels per day, but at the same time have reduced the emissions per barrel every year, leaving the absolute emissions of the oil and gas sector relatively flat. The oil sands are performing well vis-à-vis their international peers, seeing their emissions per barrel decline by 30 percent since 2013, compared to 21 percent for global majors and 34 percent for US E&Ps (exploration and production companies) (see Figure 2).

Figure 2 Indexed Oil Sands GHG relative intensity trend (2013=100). Source: BMO Capital Markets, “I Want What You Got: Canada’s Oil Resource Advantage,” April 2025

On an emissions intensity absolute basis, the oil sands have significantly outperformed their peers, shaving off 25kg/barrel of emissions since 2013 (see Figure 3) and more than 65kg/barrel since the oil sands task force wrote their report in 1994.

As emissions improvements from methane reductions plateau, the oil sands are likely to outperform their conventional peers in emissions per barrel reductions going forward. The sector is working on strategies such as solvent extraction and carbon capture and storage that, if implemented, would reduce the life-cycle emissions per barrel of oil sands to levels at or below the global crude average.

Figure 3 Emissions intensity absolute change (kg CO2e/bbl) (2013–24E) Source: BMO Capital Markets, 2025

The high cost of the cap

Several parties have analyzed the proposed emissions cap to determine its economic and production impact. The results of the assessments vary widely. For the purposes of this commentary we rely on the federal Office of the Parliamentary Budget Officer (PBO), which published its analysis of the proposed emissions cap in March 2025. Helpfully, the PBO provided a table summarizing the main findings of the various analyses (see Table 1).

The PBO found that the required reduction in upstream oil and gas sector production levels under an emissions cap would lower real gross domestic product (GDP) in Canada by 0.33 percent in 2030 and 0.39 percent in 2032, and reduce nominal GDP by C$20.5 billion by 2032. The PBO further estimated that achieving the legal upper bound would reduce economy-wide employment in Canada by 40,300 jobs and full-time equivalents by 54,400 in 2032.

Table 2 Comparison of estimated impacts of the proposed emissions cap in 2030. Source: PBO 2025

However, the PBO does not estimate the carbon price per tonne of emissions reduced. This is a useful metric as Canadians have become broadly familiar with the real-world impacts of a price on carbon. The federal government quashed the consumer carbon price at $80/tonne in March 2025, ahead of the federal election, due to its unpopularity and perceived impacts on affordability. The federal carbon pricing benchmark is scheduled to hit C$170 in 2030. ECCC has quantified the damages of a tonne of carbon dioxide – referred to as the “Social Cost of Carbon” – as C$294/tonne.

Based on PBO assumptions that the emissions cap will reduce emissions by 7.1MT and reduce GDP by $20.5 billion in 2032, the implied carbon price is C$2,887/tonne.

Emissions cap impact in a global context

Even this eye-popping figure does not tell the full story. The Canadian oil and gas production that must be withdrawn to meet the requirements of the emissions cap will be replaced in global markets from other producers; there is no reason to assume the emissions cap will affect global demand.

Based on life-cycle GHG emissions of the sample of crudes used in the US refinery complex, Canadian oil sands produce only 1 to 3 percent higher emissions than a global average[1] (see Figure 4), with some facilities producing lower emissions than the average barrel.

Figure 4 Life Cycle GHG emissions of crude oils (kg CO2e/bbl). Source:  BMO Capital Markets 2025

As such, the emissions cap, if applied just to oil sands production, would only displace global emissions of 71,000  to 213,000 tonnes (1 to 3 percent of 7.1MT). At a cost of C$20.5 billion for those global emissions reductions, the price of carbon is equivalent to C$96,000 to C$289,000 per tonne (see Figure 5).

Figure 5 Cost per tonne of emissions cap behind domestic carbon all (left) and post-global crude substitution (right)

For any displaced conventional Canadian crude oil or natural gas, the situation becomes absurd. Because Canadian conventional oil and natural gas have a lower emissions intensity than global averages, global product substitutions resulting from the emissions cap would actually serve to increase global emissions, resulting in an infinite price per tonne of carbon.

The C$100k/tonne carbon price estimate is probably low

We believe our assessment of the effective carbon price of the emissions cap at C$96,000+/tonne to be conservative for the following reasons.

First, it assumes Canadian heavy oil will be displaced in global markets by an average, archetypal crude. In fact, it would be displaced by other heavy crudes from places like Venezuela, Mexico, and Iraq (see Figure 4), which have higher average emissions per barrel than Canadian oil sands crudes. In such a circumstance, global emissions would actually rise and the price per carbon tonne from an emissions cap on oil sands production would also effectively be infinite.

Secondly, emissions cap impact assumptions by the PBO are likely conservative. Those by ECCC, based on a particular scenario outlook, are already outdated. ECCC assumed a production loss of only 0.7 percent by 2030, with oil sands production hitting approximately 3.7 million barrels (MMbbls) per day of bitumen production in 2030. According to S&P Global analysis, that level is likely to be hit this year.[2]

S&P further forecasts oil sands production to reach 4.0 MMbbls by 2030, or about 300,000 barrels more than it produces today. This would represent a far lower production growth rate than the oil sands have experienced in the past five years. But assuming the S&P forecast is correct, production would need to decline in the oil sands by 8 percent to meet the emissions cap requirements. PBO assumed only a 5.4 percent overall oil and gas production loss and ECCC assumed only 0.7 percent, while Conference Board of Canada assumed an 11.1 percent loss and Deloitte assumed 11.5 percent (see Table 1). Production numbers to date more closely align with Conference Board of Canada and Deloitte projections.

Let’s make the Canadian oil and gas sector better, not smaller

The Canadian oil and gas sector, and in particular the oil sands, has a responsibility to do their part to reduce emissions while maintaining competitive businesses that can support good Canadian jobs, provide government revenues and diversify exports. The oil sands sector has re-invested for decades in continuous improvements to drive down production costs while improving its emissions per barrel.

It is hard to conceive of a more expensive and divisive way to reduce emissions from the sector and from the Canadian economy than the proposed emissions cap. Other expensive programs, such as Norway’s EV subsidies, the United Kingdom’s offshore wind contracts-for-difference, Germany’s Energiewende feed-in-tariffs and surcharges, and US Inflation Reduction Act investment tax credits, don’t come close to the high costs of the emissions cap on a price-per-tonne of carbon abated  basis.

The emissions cap, as currently proposed, will make Canada’s oil and gas sector significantly less competitive, harm investment, and undermine Canada’s vision to be an energy superpower. This policy will also reduce the oil and gas sector’s capacity to invest in technologies that drive additional emission reductions, such as solvents and carbon capture, especially in our current lower price environment. As such it is more likely to undermine climate action than support it.

The federal and provincial governments have come together to advance a vision for Canadian energy in the past. In this moment, they have the opportunity once again to find real solutions to the climate challenge while harnessing the energy sector to advance Canada’s economic well-being, productivity, and global energy security.


About the author

Heather Exner-Pirot is Director of Energy, Natural Resources, and Environment at the Macdonald-Laurier Institute.

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