The economy is doing better than anticipated post-pandemic but it remains fragile. Rash moves by the government could still send it into a tailspin of unintended consequences.
The industries shoring up Canada’s economy are all high emitters of greenhouse gasses and are targets under Canada’s unreasonably restrictive emissions cap. If federal policies on emissions don’t change, Canada will be stunting its only large industries managing to show strength in a tight world economy.
Inflation and a growing cost of living have been plaguing Canadians for the last few years. High energy costs drive the costs of every consumer product higher along with essential utilities for citizens. Having vast energy deposits in Western Canada helps offset the pressures of high world energy prices. Governments at every level take in billions in revenue from oil and gas development while domestic energy prices remain relatively low when compared to nations more reliant upon energy imports. Canada will lose that advantage soon if the emissions cap remains as it is.
Energy companies have made great strides in emission reduction with new production methods and carbon capture technologies. That still isn’t enough for a government obsessed with reining in emissions. The Net-Zero Emissions Accountability Act aggressively demands net-zero emissions by 2050. The act was followed by the 2030 Emissions Reduction Plan which targets oil and gas companies with the expectation of having them reduce emissions to 31 percent below 2005 levels by 2030. That is a ridiculous, punitive, and unachievable target being placed upon Canada’s oil and gas sector. While unachievable emissions targets are nothing new for the government, when they are enshrined in legislation against industries, they can be devastating.
Investment is being chilled and it’s migrating to other countries. Energy is a global market and as Canada regulates oil and gas out of economic viability, other nations with less restrictive restrictions are increasing their output. In other words, we may be making the world’s environment worse as we drive business to countries with fewer environmental restrictions, not to mention human rights practices.
Beyond creating fuels for energy generation and transportation, the oil and gas sector creates a plethora of essential and lucrative petrochemical products. Even if the entire world electrifies its energy sources, it will still need plastics, chemicals, and other oil byproducts. We can’t make cars from hemp, and windmills can’t pave roads. We are surrounded by petrochemical products, from our phones to our household plumbing. If we shut in our own sources of such materials, we will be importing them at inflated prices.
Canada’s ever-increasing carbon tax has spurred a lot of discussions because consumers can see and feel its effects upon them. The emissions caps being placed on Canadian energy producers are sliding under the radar of public discourse. Decision-makers need to set aside their ideologies and start looking at economic realities. If we chill our production of petrochemicals today with these unrealistic caps, we will all be paying a heavy price for it tomorrow.
