Federal emissions cap a “sucker-punch” to province, Alberta says

“Countries around the world are moving actively, including Canada’s democratic allies and other major countries, including China. We can choose to stick our heads in the sand and get left behind, or we can choose to act. Today, we are acting.”

Minister of Environment and Climate Change, Steve Guilbeault, adds Monday that, “Every sector of the economy in Canada should be doing its fair share when it comes to limiting our country’s greenhouse gas emissions.”

Guilbeault says the science is clear in that greenhouse gas pollution must be reduced significantly and urgently to avoid the most severe impacts of climate change.

Alberta’s UCP government isn’t buying it, however, further stating that the cap violates Canada’s constitution.

It was but less than three weeks ago that Smith and company launched a $7 million ‘Scrap the Cap’ advertising campaign, calling the incoming policies reckless and short-sighted.

In a new joint statement from Premier Danielle Smith, Minister of Environment and Protected Areas Rebecca Schulz, and Minister of Energy and Minerals Brian Jean, they say Section 92A of the constitution is clear that provinces have exclusive jurisdiction over non-renewable natural resource development.

Yet this cap, they claim, will require a one million barrel a day production cut by 2030.

“The evidence is overwhelming. Three reports from reputable firms have shown that these regulations will sucker-punch Canada’s economy, a million barrels cut every day according to S&P Global, $28 billion a year in lost GDP according to Deloitte, and up to 150,000 lost jobs according to the Conference Board of Canada,” the statement says.

“The losses to GDP mean billions a year will disappear from the economy. Billions that won’t be going towards new schools, hospitals and roads, all for a reckless ideological scheme that will not reduce global emissions.”

The premier and ministers add that, “Ultimately, this cap will lead Alberta and our country into economic and societal decline.”

“We will not stand idly by while the federal government sacrifices our prosperity, our constitution and our quality of life for its extreme agenda,” the ministers and premier say.

Ottawa adds that it will continue to consult to inform the final regulations, which will be published in 2025 — which are, they say, in addition to other measures they’re taking to address pollution, such as significant financial supports for carbon capture storage and other clean technologies that support workers.

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The federal government calls the oil and gas sector an important part of the economy, supporting 400,000 jobs, adding that the regulations announced today are informed by extensive engagement with industry, Indigenous groups, provinces and territories, and other stakeholders.

They say that in the years to come, fuel extracted with the least amount of pollution will be highest in demand, with Canada at the forefront as the fourth-largest producer of oil and fifth-largest producer of gas in the world.

Jeff Lawson, a senior vice president with Cenovus Energy, which is one of Canada’s leading oil and gas companies, and headquartered in Calgary, says the legislation targets one of the most productive sectors contributing to the Canadian economy.

Lawson calls it, “yet another punitive policy,” which misses an opportunity to promote regulation that would drive economy and improve the lives of Canadians.

“Cenovus believes this legislation, if passed as presented, will lead to a reduction in production of oil and gas in Canada. The spin-off effect of shutting in production in the world’s fourth-largest oil and gas producing nation, will have a negative impact on the entire Canadian economy, resulting in a potential trade imbalance and degrade Canada’s already struggling productivity,” Lawson says.

“It is not good enough to look at what might be technically achievable. It is important to understand whether the target is economically achievable without putting Canadian businesses at a competitive disadvantage to the rest of the world.”

Cenovus’ stance is that the Government of Canada should re-think its position, and instead work with the industry to invest in, “realistic emissions reduction investments,” along with, “a timeline which makes sense for all.”

Suncor, another of Canada’s largest O&G companies, says although they’re calling this an emissions cap, it will serve as a production cap.

“In singling out the Canadian oil and gas industry for punitive treatment, the proposed policy will create further uncertainty and impede investment at a time when energy security, economic stability and industry competitiveness are more important than ever,” says Rich Kruger, president and CEO.

“The proposed regulation will add yet another layer of unnecessary complexity to a regulatory system that is already complex at a time when we should be clarifying and simplifying Canada’s regulatory framework to promote both global economic and carbon competitiveness.”

Kruger says Suncor is on the path to reducing its emissions to be globally carbon competitive.

“We believe the best way to support that is through clearer, simpler, and aligned policies promoting emissions reductions across the economy that are internationally competitive and promote Canada as an attractive place to invest,” he says.

“[This] will have material adverse consequences on Canada and its economic competitiveness.”

As a founding member of the Pathways Alliance, adds Kruger, Suncor has been working toward a framework that would enable large-scale emissions reduction in Canada.

Premier Smith’s government says it will explore the use of every legal option, including a constitutional challenge and use of the Alberta Sovereignty within a United Canada Act.

The Alberta government’s news conference from today can be watched below:

by Josh Hall | @Vancan19

Federal emissions cap a “sucker-punch” to province, Alberta says

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