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OTTAWA — A new battle brewing between Alberta and Ottawa over a new federal cap on oil and gas emissions could mark the start of a new era in Canadian climate policywith the carbon tax now virtually defeated.

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Expert says to expect a very different type of fight this time around.

Trevor Tombe, an economist at the University of Calgary School of Public Policy, says regulatory mechanisms such as caps on emissions may be a more difficult policy goal to achieve than direct carbon taxes because their costs to consumers are largely hidden.

“The costs (of regulation) are lost economic opportunities rather than actual cash flows,” Tombe said in an interview. “Psychologically, this could be easier for people to live with than explicit taxation. »

This could be one reason why the Alberta government is trying to preemptively set the emissions cap in cross-Canada ads, saying it “make shopping more expensive» for Canadian families, a claim that Tomb and other economists called it misleading since the proposed cap would have little or no direct impact on food prices.

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“We are challenging the proposed policy that would stifle our energy industry, kill jobs and ruin economies by launching a national campaign that tells Ottawa to ‘take off the cap,'” Alberta Premier Danielle Smith said in a statement. defend the project. out-of-province ad buys last week.

Draft regulation defining the cap on oil and gas emissions, first announced last Decemberare expected in the coming weeks. The federal government has indicated that the new regulations will apply to LNG and upstream oil and gas facilitiesincluding offshore installations.

The policy aims to cap 2030 emissions at 35 to 38 percent below 2019 levels, a target critics called it unrealistic.

Emitter-focused mechanisms, like the oil and gas cap, are one of the few tools available to policymakers who want to reduce carbon emissions, Tombe says.

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“Industrial pricing is now the only type of sustainable carbon pricing,” Tombe said. “Thank you to the (federal) government. »

There will be a strong case to be made that the (federal emissions regulations) impermissibly intrude into areas of provincial jurisdiction.

THE Once-popular federal carbon tax has quickly become a political liability amid growing concerns over affordability. Prime Minister Justin Trudeau further damaged the credibility of the tax last fall, when he agreed to an “exclusion” exempting home heating oil, a fossil fuel used for heat a quarter of homes in Atlantic Canada and only 6 percent of households in the rest of Canada.

The Atlantic Canada-focused heating oil exclusion has led political leaders in other parts of the country, including Manitoba NDP Premier Wab Kinew, seek similar carbon tax relief on home heating fuels.

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Fallen said the National Post in December that the emissions cap announcement was a sign that the Trudeau government was “stepping back” from a carbon tax as a central part of its climate policy.

Since then, several prominent center-left politicians have spoken out against the carbon tax, including federal NDP Leader Jagmeet Singh and British Columbia Premier David Eby.

Liberal Susan Holt, who was elected New Brunswick’s next premier on Monday, promised to present a petition to Ottawa to let it adopt an alternative to the federal carbon tax.

Holt called in March for a pause on the planned carbon tax increase this spring until April 1, 2025.

A former Alberta NDP official, speaking on condition of anonymity, said the business-friendly consumer carbon tax was always a weird thing for progressives to rally around.

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“(We) lost the plot by advocating what essentially amounts to conservative policy,” the source said; adding that the carbon tax is the option that “best protects industrial emitters from scrutiny or attention.”

Tombe said fairness could be a key selling point for regulatory approaches such as capping emissions.

“Through regulation, you may be better able to target where those costs are,” Tombe said. “The problem with the generalization of the carbon tax is that everyone pays part of the cost, which seems unfair to some. »

The Trudeau government attempted to make the carbon tax fairer by pay quarterly discounts for most Canadian households, a practice which does not seem to have contributed to strengthening the popularity of this policy among voters.

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Tombe said it may be difficult for the federal government to obtain an oil and gas emissions cap through the courts, citing its uneven regional impacts.

“It’s effectively targeting a specific region (Western Canada) for reasons that are largely political,” Tombe said.

Geoffrey Sigalet, director of the UBC Constitutional Law Center, agrees.

“There will be a strong case to be made that the (federal emissions regulations) impinge unacceptably on areas of provincial jurisdiction, including the management of natural resources under section 92A of the Constitution,” he said. Sigalet told the National Post.

Ryan Fournier, a spokesperson for Alberta Environment Minister Rebecca Schultz, said the province is prepared to fight the federal emissions cap in court.

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“We will use every legal tool at our disposal to defend our constitutional jurisdiction and the livelihoods of all Albertans,” Fournier said in an email.

A senior Environment and Climate Change Canada official said the department is confident the federal cap will hold up in court, emphasizing that the policy targets emissions and not actual energy production.

The official said Alberta and other energy-producing provinces can continue to increase oil and gas production within the cap if they scale up emissions-reducing carbon capture and storage technologies.

National Post
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