On Friday, the Canadian government announced their new climate plan using language that many say mischaracterizes Canada’s record for GHG reduction and Canada’s successes in developing technology and initiatives for decarbonization.
The plan includes steady increases to the carbon tax by up to $15 a ton in each of the next 10 years to reach $170 a ton and some insiders indicate there may be an assumption in the wording that the tax might continue to go up after 2030.
The plan instantly invoked criticism from consumer advocates. In an interview with the BOE report, Dan McTeague, President of Canadians for Affordable Energy and former Liberal Member of Parliament from 2004-2011 was critical of his former party’s plan saying,
“Let’s understand why the announcement was made on Friday, Dec 11th. It’s the five-year anniversary celebrating Trudeau’s signature to the Paris climate agreement- an agreement which gives Canada absolutely no credit for the fact that prior to 2005, we had already substantially reduced our emissions- industrial as well as commercial. It also gives Canada no credit for selling clean technologies to high emitter countries like China, which continue to increase their emissions and output even though they profess to do otherwise. It’s punishing Canadians.”
McTeague has been very active in the realm of public policy since leaving office and has been working to address not only the Carbon tax but also the flawed Clean Fuel Standard (CFS) with the provinces and the federal government. According to McTeague, they were able to get concessions in the CFS to get the government to “back off on gas and solids” but that only happened when letters from premiers of various provinces were received saying “we just can’t afford this…This is the worst possible time to do this”. A joint letter, written this past week by the four Atlantic premiers and their energy ministers had an impact declaring this is not the time to impose the Clean Fuel Standard- and that the provinces need exemptions.
Some of the issues with the New Climate Plan stem from the Federal government’s actions in the past five years- continuing to add to their list of regulations and measures aimed to hobble the Canadian oil and gas industry in the name of climate change. After five years, many industry and business professionals are crying foul.
The plan will see the Carbon tax increase on April 1st, 2021, and again on April 1st, 2022. That will increase the current $30 per ton carbon tax to a tax of $50.00 per ton. (approximately $10 per year). According to Dan McTeague, for a person driving a vehicle in Edmonton today, that means the current carbon tax on gasoline will go from 6.62 cents plus GST a litre up to 11.05 plus GST cents a litre. The harder part is determining what the costs will be after 2022. An additional $15 per year increase will mean an additional 21 cents per litre on top of the 2021/2022 increases. Between now and 2030, to reach $170 per ton, they have to increase gas prices by 30.94 cents plus GST per litre, a total of 32.5 cents per litre for Albertans.
Looking at the increase in diesel prices, the increase is higher. Diesel goes up 37.59 cents a litre plus GST- 39.5 cents a litre total for Albertans, and Saskatchewan & Manitoba. McTeague points out diesel is the stuff that moves our economy, and it will go up almost 40 cents a litre and we have to consider the immediate consequences to the economy.
As an 18-year veteran of the Liberal party and a member of parliament and cabinet, McTeague is not pulling any punches.
He thinks the country can’t afford the new Climate Plan, especially while dealing with the pandemic. He’s concerned that the Prime Minister keeps talking about a price on pollution as if there is an existential threat to clean up our air instead of looking at the very serious situation in which many businesses are going to have to bear the cost of ever-increasing regulations and taxes on emissions. McTeague is also concerned the PM is making what is considered to be rather misleading statements about the state of Canada’s clean energy with an over-emphasis on electric vehicles for example.
“In terms of motivation for Canadians to transition to electric vehicles, you are going to increase the cost of living for all Canadians and at the same time demand they buy and drive more electric vehicles which are more expensive (even with a rebate) and are less efficient and also have a massive carbon footprint.”
McTeague points out that since electric vehicles are taxpayer-subsidized, it’s not practical to consider them affordable and electric vehicles can’t be used for longer transportation as they don’t have access to enough infrastructure- either personal or public. He notes we are a long way off from having sufficient infrastructure and that this will stunt the economy’s growth.
“Let’s be honest, these vehicles can’t be built unless they are massively subsidized by the government. The companies are paid (by govt subsidy) to build them and consumers are paid to buy them. Where is the business sense in that? There is a reason why we abandoned the electric car 100 years ago. It’s only feasible in the inner city.”
McTeague says the internal combustion engine still has a smaller carbon footprint and it doesn’t damage the environment as heavily as the rare earth minerals in the EV battery do. He knows what he is talking about- before being a member of the Liberal party for 18 years, he worked in public relations for Toyota Canada and introduced the Prius to the market. He says, dollar for dollar, energy for energy, we don’t yet have the ability to produce something as efficient as hydrocarbons. Canada is performing very well in terms of clean energy and should be recognized for that. He also says,
“Let’s applaud the great strides forward that have been taken in terms of building an efficient, very close to emissions-free, internal combustion engine. Let’s let technology evolve, but let’s not get ahead of technology. The technology is not here yet and certainly won’t be here in nine years just because of “woke” idealism which has no grounding in reality.
There is a good case for recognizing the continuing role of hydrocarbons in Canada’s economy. During two recent economic downturns (in 1993 to 1995 and again in 2008 during the world economic crisis) the Canadian energy sector pulled the Canadian economy out of the downturn. One of the main reasons we could get out of those crises was that Canada could sell our oil and gas- we had expanding pipelines and a hungry US market that was turning to Canadian oil for energy independence. McTeague points out it was the strengthening oil and gas sector that powered the recovery and wants that to happen again for our current recovery.
“Looking at the banking and the insurance sectors, one-quarter of their business comes from the oil and gas sector which can fuel a healthy green economy and produce a sizable number of jobs and maintain wealth. This is why Canadians enjoy the standard of living they have. All this is at risk from a government that can’t understand that it is the very thing that keeps our country together. Without the oil and gas industry, there won’t be much of a financially viable Canada.”
Maureen McCall is an energy professional who writes on issues affecting the energy industry.