The West will be the hardest hit if Justin Trudeau’s Liberal government brings in a second carbon tax, says one of Canada’s top economists..“This economic cost would be felt most heavily in the Western provinces especially Alberta and Saskatchewan,” wrote University of Calgary economist Jack Mintz wrote in Saturday’s Financial Post..“Both provinces contribute over $20 billion per year, equivalent to a 10-per-cent tax on their personal income, in fiscal transfers to the rest of Canada through the federal budget..“Alberta and Saskatchewan will likely continue their outsized contribution to the rest of Canada when the bill for current spending comes due..“The government’s new agenda is expected to include at least $50 billion in climate spending and subsidies over five years.”.The second carbon tax is to be called the Canadian Fuel Standard, a regulatory regime that will require all supplies of fossil fuel to reduce carbon content, reports John Ivison of the National Post..Canadians will be hit with higher gas prices and home heating bills because of the new tax, Ivison reports, part of Canada’s plan within the Paris Accord to reduce emissions 30 per cent below 2005 levels by 2030..Businesses, already reeling because of the COVID-19 pandemic, would be hit with double digit cost increases in energy..The CFS apparently features an equivalent carbon tax of $350 per tonne – on top of the current $50-per-tonne carbon tax..Mintz noted Canada’s emissions have been virtually flat at 720 megatonnes (MT) since 2005, so any chance of reaching a 30-per-cent reduction in emissions by 2030, as the Liberals have promised to do, looks highly unrealistic without heavily affecting the oil and gas sector..“One goal is to push consumers into buying electric vehicles, which so far remain at less than five per cent of auto sales. People still prefer SUVs, and SUVs are where Ontario automakers make their best margins,” wrote Mintz..“Green jobs don’t generate anywhere close to the value added per working hour produced currently in oil, gas, petrochemical and mining industries. So, any policy that particularly penalizes these industries will certainly undermine economic growth, just as the economy is already facing several years of difficulties as we recover from the current pandemic..“The issue is whether the Liberal government believes that the oil and gas sector can remain an important part of the future energy transition to ‘net zero’ emissions. Most plans going to net-zero emissions show that oil and natural gas will continue to be important, even if their role is reduced..“While the federal government has supported the construction of the still unfinished Trans Mountain pipeline, most of its policies have made the western oil industry uncompetitive.”.Ivision reports the Liberals have been planning the CFS since they came to power but the COVID-19 pandemic delayed their plans until the end of September when a Throne Speech will bring Parliament back from prorogue..Federal environment minister Jonathan Wilkinson told Ivison the CFS will diversify the economy and promote investment in clean solutions.. POLL: Many Albertans say they will ignore Christmas COVID lockdown .“It will create opportunities for farmers and companies producing renewable fuels, will encourage investments in energy efficiency to help Canadians save money and will promote faster development of zero emissions vehicles,” he said in a statement..Ivison reports: “Unlike the carbon tax, the CFS offers no exemptions for large emitters in trade-exposed industries. That’s because the government assumes regulated entities will simply pass on the costs downstream to producers and consumers..“The cost implications for households and industry are unclear but a study by the Canadian Energy Research Institute in May 2019 estimated the impact of a 20 per cent reduction in carbon intensity. CERI suggested a total fuel decarbonisation cost of $15.3 billion a year, adding $84 or four per cent to household fuel bills; $62 or 2.8 per cent to the cost of gas; and 13 per cent to fuel costs for industry.”.Opposition to the new tax is already at the boiling point..“It will be a disastrous policy,” said Bob Masterson, president of the Chemical Industry Association of Canada..“Anyone receiving these fuels is at the mercy of suppliers with no ability to effect the cost of compliance.”.Dave Naylor is the News Editor of the Western Standard.dnaylor@westernstandardonline.com.TWITTER: Twitter.com/nobby7694
The West will be the hardest hit if Justin Trudeau’s Liberal government brings in a second carbon tax, says one of Canada’s top economists..“This economic cost would be felt most heavily in the Western provinces especially Alberta and Saskatchewan,” wrote University of Calgary economist Jack Mintz wrote in Saturday’s Financial Post..“Both provinces contribute over $20 billion per year, equivalent to a 10-per-cent tax on their personal income, in fiscal transfers to the rest of Canada through the federal budget..“Alberta and Saskatchewan will likely continue their outsized contribution to the rest of Canada when the bill for current spending comes due..“The government’s new agenda is expected to include at least $50 billion in climate spending and subsidies over five years.”.The second carbon tax is to be called the Canadian Fuel Standard, a regulatory regime that will require all supplies of fossil fuel to reduce carbon content, reports John Ivison of the National Post..Canadians will be hit with higher gas prices and home heating bills because of the new tax, Ivison reports, part of Canada’s plan within the Paris Accord to reduce emissions 30 per cent below 2005 levels by 2030..Businesses, already reeling because of the COVID-19 pandemic, would be hit with double digit cost increases in energy..The CFS apparently features an equivalent carbon tax of $350 per tonne – on top of the current $50-per-tonne carbon tax..Mintz noted Canada’s emissions have been virtually flat at 720 megatonnes (MT) since 2005, so any chance of reaching a 30-per-cent reduction in emissions by 2030, as the Liberals have promised to do, looks highly unrealistic without heavily affecting the oil and gas sector..“One goal is to push consumers into buying electric vehicles, which so far remain at less than five per cent of auto sales. People still prefer SUVs, and SUVs are where Ontario automakers make their best margins,” wrote Mintz..“Green jobs don’t generate anywhere close to the value added per working hour produced currently in oil, gas, petrochemical and mining industries. So, any policy that particularly penalizes these industries will certainly undermine economic growth, just as the economy is already facing several years of difficulties as we recover from the current pandemic..“The issue is whether the Liberal government believes that the oil and gas sector can remain an important part of the future energy transition to ‘net zero’ emissions. Most plans going to net-zero emissions show that oil and natural gas will continue to be important, even if their role is reduced..“While the federal government has supported the construction of the still unfinished Trans Mountain pipeline, most of its policies have made the western oil industry uncompetitive.”.Ivision reports the Liberals have been planning the CFS since they came to power but the COVID-19 pandemic delayed their plans until the end of September when a Throne Speech will bring Parliament back from prorogue..Federal environment minister Jonathan Wilkinson told Ivison the CFS will diversify the economy and promote investment in clean solutions.. POLL: Many Albertans say they will ignore Christmas COVID lockdown .“It will create opportunities for farmers and companies producing renewable fuels, will encourage investments in energy efficiency to help Canadians save money and will promote faster development of zero emissions vehicles,” he said in a statement..Ivison reports: “Unlike the carbon tax, the CFS offers no exemptions for large emitters in trade-exposed industries. That’s because the government assumes regulated entities will simply pass on the costs downstream to producers and consumers..“The cost implications for households and industry are unclear but a study by the Canadian Energy Research Institute in May 2019 estimated the impact of a 20 per cent reduction in carbon intensity. CERI suggested a total fuel decarbonisation cost of $15.3 billion a year, adding $84 or four per cent to household fuel bills; $62 or 2.8 per cent to the cost of gas; and 13 per cent to fuel costs for industry.”.Opposition to the new tax is already at the boiling point..“It will be a disastrous policy,” said Bob Masterson, president of the Chemical Industry Association of Canada..“Anyone receiving these fuels is at the mercy of suppliers with no ability to effect the cost of compliance.”.Dave Naylor is the News Editor of the Western Standard.dnaylor@westernstandardonline.com.TWITTER: Twitter.com/nobby7694
