‘They are big numbers. And we were trying to make the case to Ottawa that when Alberta does well, Canada does well,’ Premier Danielle Smith said Wednesday
It’s no surprise the Alberta government and the country’s oil and gas industry fiercely oppose the Trudeau government’s incoming cap on greenhouse gas emissions from the sector, highlighted by new submissions to Ottawa this week.
But if you dive into the province’s report filed with the federal government, it includes some new economic analysis that helps explain why they’re so concerned.
“They are big numbers. And we were trying to make the case to Ottawa that when Alberta does well, Canada does well,” Premier Danielle Smith said Wednesday in an interview.
“I’m hoping that self-interest kicks in here at some point . . . There’s no reason for them to try to kneecap our industry. It just hurts everyone.”
The analysis adds more ammunition to an acrimonious debate between the federal and provincial governments over the policy, which is part of Canada’s broader climate plan to reach net-zero emissions by 2050.
That’s part of what makes it so interesting, as it’s based on the new framework for the oilpatch emissions cap released by the Trudeau government in December.
“The policy, as it’s announced right now, in our view is going to lead to significantly slower growth of the oil and gas sector, across the country and materially in Alberta,” said the board’s director of economic research, Tony Bonen.
“And it comes at a fairly high cost, in terms of the price-per-megatonne of greenhouse gas emissions that are reduced.”
While the industry can take lower-cost steps to lower its methane emissions, there would still be a gap to meet Ottawa’s goal for the oilpatch.
That would lead to reduced production growth — down about 11 per cent from the Conference Board’s base case — as oil and gas “gets left in the ground,” next decade, Bonen said.
“Some higher cost, less economically efficient, projects will not move forward in our scenario. And some that are operating now, but at a higher cost, are probably stopped. But there will still be net new wells drilled and new production produced.”
(The data is based on the board’s most likely scenario, as two other ones it examined showed a greater effect on jobs and GDP.)
Bonen estimated the costs of lowering emissions through production cuts at about $1,600 to $1,700 for every megatonne reduced through the cap.
“We are going to require substantial changes to our economic systems to address the climate crisis,” Bonen added.
“For us, it’s very important to be clear on where those impacts are going to be felt and be honest about the size of those impacts — so we can start adjusting and planning ahead for them.”
The provincial submission also called on the federal government to release its assessment of the economic effects of the cap from 2030 forward.
That is coming “and will be available when the government publishes draft (cap) regulations later this year,” a spokesperson for federal Environment Minister Steven Guilbeault said in an email.
“The fact is, a cap on oil and gas emissions is smart economic policy — it will help ensure the sector’s long-term competitiveness in a rapidly decarbonizing world.”
The oil and gas industry is the largest emitting sector in Canada. The Liberal government has introduced a series of policies — including a national price on carbon, clean fuel regulations and the incoming emissions cap — as concerns around climate change mount.
The cap is expected to be phased in between 2026 and 2030.
Canada is the world’s fourth-largest oil producer and the sector directly employed 178,000 people across the country in December.
The provincial submission says the cap will also affect the Canadian construction, manufacturing and service sectors, as well as the financial, restaurant and hospitality industries.
University of Calgary economist Trevor Tombe said there are too many unanswered questions about the cap to fully understand the economic consequences of the policy.
But he said it’s clear the effect will be significant, hitting one region of the country much harder than the rest.
“Whether it’s $600 billion to $1 trillion, as the Conference Board puts it out, or some other set of numbers, it’s going to be big — that is the takeaway from these numbers,” Tombe said.
The Pathways Alliance group, which represents large oilsands operators, maintains the cap is unnecessary and unworkable, saying it will deter investors from the sector and it risks curtailing production.
The group is working to reach net-zero emissions by 2050 and is developing a $16.5-billion carbon capture and storage network in Alberta.
“I would say (the cap) is singularly unhelpful in advancing decarbonization investment of any kind, including the Pathways project. Unfortunately, all it does is send a message to investors that Canada is not open for business,” Pathways Alliance president Kendall Dilling said in an interview.
“At this point, in good faith, we will keep our heads down, keep investing, keep working and trust that sanity will prevail.”
In its submission, the Canadian Association of Petroleum Producers (CAPP) noted emissions from the conventional oil and gas sector fell by 24 per cent, while production grew by 21 per cent between 2012 and 2021.
“We are hoping that this framework is put on ice, so that we can really look at this thoughtfully and realistically,” said CAPP president Lisa Baiton.
VICTORIA – British Columbia is forecasting a record budget deficit and a rising debt of almost $129 billion less than two weeks before the start of a provincial election campaign where economic stability and future progress are expected to be major issues.
Finance Minister Katrine Conroy, who has announced her retirement and will not seek re-election in the Oct. 19 vote, said Tuesday her final budget update as minister predicts a deficit of $8.9 billion, up $1.1 billion from a forecast she made earlier this year.
Conroy said she acknowledges “challenges” facing B.C., including three consecutive deficit budgets, but expected improved economic growth where the province will start to “turn a corner.”
The $8.9 billion deficit forecast for 2024-2025 is followed by annual deficit projections of $6.7 billion and $6.1 billion in 2026-2027, Conroy said at a news conference outlining the government’s first quarterly financial update.
Conroy said lower corporate income tax and natural resource revenues and the increased cost of fighting wildfires have had some of the largest impacts on the budget.
“I want to acknowledge the economic uncertainties,” she said. “While global inflation is showing signs of easing and we’ve seen cuts to the Bank of Canada interest rates, we know that the challenges are not over.”
Conroy said wildfire response costs are expected to total $886 million this year, more than $650 million higher than originally forecast.
Corporate income tax revenue is forecast to be $638 million lower as a result of federal government updates and natural resource revenues are down $299 million due to lower prices for natural gas, lumber and electricity, she said.
Debt-servicing costs are also forecast to be $344 million higher due to the larger debt balance, the current interest rate and accelerated borrowing to ensure services and capital projects are maintained through the province’s election period, said Conroy.
B.C.’s economic growth is expected to strengthen over the next three years, but the timing of a return to a balanced budget will fall to another minister, said Conroy, who was addressing what likely would be her last news conference as Minister of Finance.
The election is expected to be called on Sept. 21, with the vote set for Oct. 19.
“While we are a strong province, people are facing challenges,” she said. “We have never shied away from taking those challenges head on, because we want to keep British Columbians secure and help them build good lives now and for the long term. With the investments we’re making and the actions we’re taking to support people and build a stronger economy, we’ve started to turn a corner.”
Premier David Eby said before the fiscal forecast was released Tuesday that the New Democrat government remains committed to providing services and supports for people in British Columbia and cuts are not on his agenda.
Eby said people have been hurt by high interest costs and the province is facing budget pressures connected to low resource prices, high wildfire costs and struggling global economies.
The premier said that now is not the time to reduce supports and services for people.
Last month’s year-end report for the 2023-2024 budget saw the province post a budget deficit of $5.035 billion, down from the previous forecast of $5.9 billion.
Eby said he expects government financial priorities to become a major issue during the upcoming election, with the NDP pledging to continue to fund services and the B.C. Conservatives looking to make cuts.
This report by The Canadian Press was first published Sept. 10, 2024.
Note to readers: This is a corrected story. A previous version said the debt would be going up to more than $129 billion. In fact, it will be almost $129 billion.
The Canadian Press. All rights reserved.
NANAIMO, B.C. – Former Bank of Canada governor Mark Carney says he’ll be advising the Liberal party to flip some the challenges posed by an increasingly divided and dangerous world into an economic opportunity for Canada.
But he won’t say what his specific advice will be on economic issues that are politically divisive in Canada, like the carbon tax.
He presented his vision for the Liberals’ economic policy at the party’s caucus retreat in Nanaimo, B.C. today, after he agreed to help the party prepare for the next election as chair of a Liberal task force on economic growth.
Carney has been touted as a possible leadership contender to replace Justin Trudeau, who has said he has tried to coax Carney into politics for years.
Carney says if the prime minister asks him to do something he will do it to the best of his ability, but won’t elaborate on whether the new adviser role could lead to him adding his name to a ballot in the next election.
Finance Minister Chrystia Freeland says she has been taking advice from Carney for years, and that his new position won’t infringe on her role.
This report by The Canadian Press was first published Sept. 10, 2024.
The Canadian Press. All rights reserved.
HALIFAX – The Nova Scotia government has introduced a bill that would kick-start the province’s offshore wind industry without federal approval.
Natural Resources Minister Tory Rushton says amendments within a new omnibus bill introduced today will help ensure Nova Scotia meets its goal of launching a first call for offshore wind bids next year.
The province wants to offer project licences by 2030 to develop a total of five gigawatts of power from offshore wind.
Rushton says normally the province would wait for the federal government to adopt legislation establishing a wind industry off Canada’s East Coast, but that process has been “progressing slowly.”
Federal legislation that would enable the development of offshore wind farms in Nova Scotia and Newfoundland and Labrador has passed through the first and second reading in the Senate, and is currently under consideration in committee.
Rushton says the Nova Scotia bill mirrors the federal legislation and would prevent the province’s offshore wind industry from being held up in Ottawa.
This report by The Canadian Press was first published Sept. 10, 2024.
The Canadian Press. All rights reserved.
RCMP say 3 dead, suspects at large in targeted attack at home in Lloydminster, Sask.
Lawyer says Chinese doping case handled ‘reasonably’ but calls WADA’s lack of action “curious”
Hall of Famer Joe Schmidt, who helped Detroit Lions win 2 NFL titles, dies at 92
RBC names Katherine Gibson as permanent chief financial officer
Nova Scotia adopts bill declaring domestic violence in the province an epidemic
Canadanewsmedia news September 12, 2024: Air Canada pilot strike looms, BC transit strike talks resume
Local Toronto business story – Events Industry : new national brand, Element Event Solutions
B.C. to scrap consumer carbon tax if federal government drops legal requirement: Eby
