Politically moderate Canadians across the country have every reason to be concerned about the federal government’s pending emissions cap on Canadian oil and gas. Just look at the financial implications.
Says the Conference Board of Canada:
- Alberta government revenues could shrink by $73 billion to $127 billion over the next 10 years, and $84 billion to $151 billion in federal revenue could vaporize over the same period.
- Between 82,000 and 151,000 jobs could disappear by the end of the decade across Canada – including between 54,000 and 91,000 in Alberta alone.
- Nominal gross domestic product (GDP) in Canada could take a shellacking of as much as $1 trillion from 2030 to 2040. Alberta’s GDP could decline by 3.8 per cent over that time.
All this is made possible by Canada’s ambitious plan to implement an emissions cap on our oil and gas sector, even while measures are already in place to continue reducing the CO2 emissions per unit of Canadian energy produced, and to achieve net-zero CO2 emissions by 2050.
It’s no wonder observers are concerned. The federal policy could put at risk Canada’s ability to supply the energy needs of our Asian allies like Japan and Korea.
While Asian demand will likely soar between 2030 and 2050, the federal plan would cap emissions by 2030, slashing output by up to 38 per cent below 2019 levels. According to the Business Council of Canada, such a move would force production cuts, potentially jeopardizing global energy security.
Organizations from Vancouver to Montreal have sounded the alarm.
The Montreal Economic Institute (MEI) is highly critical of the cap and cautions Canadians to prepare for a potential loss of domestic jobs and a decrease in tax revenues, all for a negligible environmental impact. Even worse, the MEI ballparks the cost of the cap to the economy at an astounding $6 billion annually.
The Vancouver-based Fraser Institute puts it this way: “Every credible forecast of world energy consumption indicates oil and gas will continue to dominate the global energy supply mix for decades. Constraining oil and gas production and exports in Canada would merely shift production to other regions, potentially to countries with lower environmental and human rights standards such as Iran, Russia and Venezuela.”
Regarding industry’s recent messaging to Ottawa, Calgary Chamber of Commerce CEO Deborah Yedlin told media the following: “The unified message was that the cap, as presented, is unworkable, untenable, and it’s going to increase investment uncertainty.”
Global oil demand is set to grow by 1.9 million barrels per day in 2024. Another six-plus million barrels of new supply is needed this year just to replace declining existing production.
As long as the world needs oil and natural gas, Canada should supply it.
Cody Battershill is a Calgary realtor and founder / spokesperson for CanadaAction.ca, a volunteer-initiated group that supports Canadian energy development and the environmental, social and economic benefits that come with it.
