Canada at COP28: Policy Announcements Abroad, Political Tensions at Home

Environment Minister Steven Guilbeault (L) and Denmark's Minister for Climate Dan Jorgensen arrive at the COP28 summit in Dubai, United Arab Emirates, on Dec. 11, 2023. AP Photo/Peter Dejong

In the final hours of the COP28 climate summit in Dubai, nearly 200 countries including Canada agreed to transition away from oil, gas, and coal by 2050, going further than previous commitments to achieve net-zero emissions by the middle of the century.

The governments are now expected to enact policies and initiatives to advance fossil fuel transitioning, as they did for the 2015 Paris Agreement, such as Canada’s 2030 emissions-reduction target.

The COP28 agreement will likely escalate tensions even further between Canada’s oil-producing provinces and the governing Liberals. As it is, Alberta and Saskatchewan have been arguing and concerned that the Paris Agreement’s commitment to a “just transition” of the fossil fuel workforce—now making its way into government legislation to move workers toward a “low-carbon future”—is shorthand for phasing out oil and gas.

Participants attend day four at night of the U.N. COP28 Climate Conference at Expo City Dubai, United Arab Emirates, on Dec. 3, 2023. Sean Gallup/Getty Images

However, even before any manifestations of the new global commitment emerge in the form of policy, plenty of other developments occurred at COP28 to rile up conflict in Canada, as the feds reserved for the international forum major climate change policy announcements that will impact the provinces.

This included a cap on emissions in the oil and gas sector, which the Liberals had touted during the 2021 election, and announced on Dec. 7 at the summit, held from Nov. 30 to the early hours of Dec. 13.

Canada’s Announcements

The draft regulatory framework announced on Dec. 7 requires capping emissions from the oil and gas sector at 35 to 38 percent below 2019 levels by 2030. The proposed regulation would allow lowering the level of emissions to cut to 20 to 23 percent below 2019 levels through options such as buying carbon offset credits or contributing to a “decarbonization fund.”

Environment and Climate Change Minister Steven Guilbeault boasts that Canada is the first oil- and gas-producing nation in the world to implement such a cap on emissions.

Alberta and Saskatchewan maintain that the cap on emissions is a de facto cap on production, which would be an infringement on provincial jurisdiction.

Days earlier in Dubai, on Dec. 4, Mr. Guilbeault unveiled new draft regulations to cut methane emitted by the oil and gas sector by 75 percent of 2012 levels by 2030.

In the latter days of the summit, the federal government announced a new program to incentivize beef cattle farmers to reduce emissions from bovine burps.

Minister of Environment and Climate Change Steven Guilbeault speaks to members of the media at the COP28 U.N. Climate Summit in Dubai on Dec. 8, 2023. AP Photo/Peter Dejong

During the summit, Canada also took part in various multilateral initiatives, such as agreeing to triple global nuclear energy capacity by 2050, and committed over $67 million for different projects related to “vulnerable countries.”

The funding includes $34.2 million to the Global Environment Facility’s Special Climate Change Fund, and pledging $16 million as part of a collective US$400 million fund with other governments to “address loss and damage in climate-vulnerable countries.”

Most of the funding will be provided under the $5.3 billion “international climate finance commitment” that Ottawa announced in 2021.

Climate Policies

The latest announced measures are just part of a slew of other previously committed climate change policies by the federal government.

Under the net-zero emissions law passed in 2021, the government is committed to reaching net-zero greenhouse gas emissions by 2050. The legislation requires establishing five-year emissions reduction targets from 2030 to 2050 and the means to achieve them.

The government says a pillar of its emissions reduction strategy is its carbon pricing mechanism, which the opposition calls the carbon tax. The major contribution comes from the costs imposed on the industry, while progressively escalating costs are put on consumers and the agricultural sector.

“The carbon price is estimated to be responsible for about a third of projected emissions reductions in 2030,” Environment and Climate Change Canada says in its 2023 emissions reduction progress report.

Another measure is the Clean Fuel Regulations, which mandates reducing “the carbon intensity” of fuel.

John Kerry (L), U.S. special presidential envoy for climate, and Sultan Ahmed Al Jaber, president of the U.N. COP28 Climate Conference, speak with one another during the COP28 Climate Conference at Expo City Dubai, in Dubai, United Arab Emirates, on Dec. 2, 2023. Sean Gallup/Getty Images

The government is phasing out “unabated” (without taking steps to reduce emissions, like carbon capture) coal-fired electricity by 2030.

Last year, the government introduced proposed regulations requiring that 20 percent of vehicles sold in 2026 be electric, with that requirement going up to 60 percent in 2030 and 100 percent by 2035.

The government is also requiring provinces to have net-zero electricity grids by 2035 under a draft proposal known as Clean Electricity Regulations, which has not been received well in Alberta and Saskatchewan since natural gas accounts for a major part of their electrical generation.

The feds are also targeting plastic, stating a goal of zero plastic waste.

Other measures include tax incentives and funding support for emission-reduction technologies, electric vehicle battery production, and retrofitting homes to make them more energy efficient.

Provincial Opposition

Sustaining two recent defeats in the courts over jurisdictional overreach, Ottawa made it abundantly clear in  announcing the oil and gas emissions cap that it is limiting “pollution, not production,” since the latter, as resource development, falls under provincial jurisdiction.

But the Alberta and Saskatchewan premiers, who went to the summit in Dubai, see it differently.

“Today’s announced de facto production cap on Alberta’s oil and gas sector amounts to an intentional attack by the federal government on the economy of Alberta and the financial well-being of millions of Albertans and Canadians,” Alberta Premier Danielle Smith said on Dec. 7.

Saskatchewan Premier Scott Moe called the new federal policies “more red tape” and said provincial regulations and technology have already reduced emissions in the oil and gas sector.

“These new policies will have serious economic impacts on Canadians and limit our sustainable Canadian energy products from providing heat and electricity to the world,” Mr. Moe said on Dec. 7.

An analysis by CIBC Capital Markets sent to clients said that the timing of the oil and gas emissions caps is “unrealistically ambitious” and would in effect impose a cap on production.

Mr. Guilbeault says all sectors in Canada need to cut emissions, and that includes oil and gas companies.

“No one should be allowed unlimited pollution. It harms our health and environment. We put a cap on it,” Mr. Guilbeault said in announcing the oil and gas sector emissions cap.

Alberta and Saskatchewan similarly took issue with the announced cap on methane emissions, while saying they were kept in the dark prior to the federal government’s major announcements in Dubai.

Mr. Guilbeault has acknowledged that the new emissions cap will likely be challenged by the provinces in the courts, but maintains that the regulations are within federal jurisdiction, citing a 2021 Supreme Court of Canada decision on the carbon tax.  The court, responding to a challenge by provinces, said pollution has no boundaries and that a nationally coordinated approach in imposing pricing on carbon is within federal jurisdiction.

However, more recently, in October, the Supreme Court said that the federal Impact Assessment Act—dubbed by former Alberta Premier Jason Kenney as the “no more pipelines act” due to the regulatory burden it placed on energy projects—is largely unconstitutional. The federal government has said it will reintroduce the legislation after making some changes to comply.

As well, a Federal Court in November said that a cabinet order to classify plastic products as toxic was “unreasonable and unconstitutional.” The federal government has said it will appeal that decision.

Saskatchewan Premier Scott Moe speaks to the media at the Saskatchewan legislature in Regina on Oct. 10, 2023. The Canadian Press/Heywood Yu

The latest clashes come on the heels of Alberta invoking its sovereignty act last month in response to the feds’ Clean Electricity Regulations. Under the act tabled before the provincial legislature, Ms. Smith’s government is requiring provincial officials and agencies to ignore the requirement, saying it puts the reliability of electrical supply in the province in jeopardy.

Saskatchewan also invoked its Saskatchewan First Act last month, creating a tribunal that will study the economic impact of the Clean Electricity Regulations.

The two provinces have also joined other provinces calling for exemptions from the carbon tax for all types of home heating fuels after Ottawa put a pause on the tax for home heating oil. Since this type of heating is primarily used in the Atlantic provinces, other provinces say the exemption amounts to a carveout that benefits one part of the country and is unfair to the rest of Canada. Saskatchewan has said it will stop collecting the federal carbon tax on natural gas bills if the exemption isn’t expanded. Prime Minister Justin Trudeau has said he is not considering other exemptions.

Similar to the federal government, British Columbia, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, and the Yukon have legislated climate change targets. Alberta, Manitoba, Ontario, Newfoundland and Labrador, and the Northwest Territories have non-legislated targets, while Saskatchewan and Nunavut have no targets.