Alberta Premier Danielle Smith baldly stated, “I’m pissed – I’m absolutely angry.” Pictured: Environment and Climate Change Minister Steven Guilbeault. Photo Credit: Steven Guilbeault/X.
The seismic political movement felt south of the border this week with the election of Donald J. Trump as president fixated Canadians’ attention to the point that most people missed an equally disruptive event in Ottawa that has had disturbing reverberations across our land. The Trudeau Liberals took the opportunity of the United States’ election day media circus to release their draft emissions regulations for Canadian oil and gas producers. Their announcement was instantly met with expected criticisms from industry and political leaders – but, more significantly, it has evoked a rash of cynicism about the country’s economy and its national unity among a growing number of financial analysts and political pundits.
The Canadian maelstrom began on Monday in Ottawa when Environment and Climate Change Minister Steven Guilbeault pronounced that the government will impose “a greenhouse gas pollution cap” on the oil and gas sector that limits emissions to 35 per cent below 2019 levels. He characterized the new regulatory regime as targeting pollution and not production, and stated Canadian upstream oil and gas operations must meet the new emissions targets by 2032 at the latest.
In his explanation of the policy, Guilbeault played down the burdensome nature of the new regulations, repeatedly suggesting the reduction targets were “technically feasible” and can be reached with tools and technologies already in use in the oil and gas sector. Guilbeault made a point of saying that oil and gas companies have been making record profits in recent years and they should be expected to re-invest their gains into pollution-cutting projects. He noted the Liberals are intent on meeting their climate change goals and that the government would initiate a three-month consultation period to get industry feedback on how the goals may be realized.
Guilbeault did not have to wait more than a few hours to get an unqualified response to his proposed cap. Alberta Premier Danielle Smith baldly stated, “I’m pissed – I’m absolutely angry.” In an Edmonton media conference, she called the Liberal policy a “deranged vendetta against Alberta” concocted by Guilbeault and his environmental zealots. She fumed, “We will not stand idly by while Justin Trudeau sacrifices our prosperity, our constitution and our quality of life for his extreme agenda…. They cannot destroy the most important industry in the country by targeting our province. We just won’t stand for it.” In subsequent media exchanges, the Premier would assert, “This cap must be scrapped.”
The Province of Alberta also released an official statement on Monday, which read in part:
“With his pronouncement today singling out the oil and gas sector alone for punitive federal treatment, Justin Trudeau and his eco-extremist Minister of the Environment and Climate Change, Steven Guilbeault, are risking hundreds of billions of investments in Alberta’s and Canada’s economy and core social programs, are devaluing the retirement investments of millions of Canadians, and are threatening the jobs of hundreds of thousands of Albertans.
“Ironically, they are also significantly undercutting global emissions reduction efforts by effectively de-incentivizing capital investment by the oil and gas sector in the emissions-reducing technologies and fuels the world needs Alberta to develop and share.”
Alberta MPs were also quick to denounce the Liberals initiative as an “ideological crusade” against the energy sector. Shannon Stubbs, Lakeland MP, stated, “How is a first-in-the-world emissions cap on Canadian oil and gas … a higher priority to this current government over more cross-country and export pipelines and LNG development?” Conservative finance critic and Calgary MP Jasraj Singh Hallan reasoned, “The Liberal-NDP radical job killing oil and gas cap will blow a hole in Canada’s economy. Nearly a million jobs rely on Canadian energy, a sector which leads in clean tech innovation and provides tax revenues for schools and hospitals across the country. Trudeau would rather crush Canada’s energy sector, kill good paying jobs, and force allies to buy dirty dictator oil overseas.”
Economic data relating to the Canadian oil and gas industry provide a clear understanding of just how much is at stake for Albertans – and for Canadians. According to official federal government sources, the oil and gas sector generated $209 billion in gross domestic product (GDP) in 2023. It accounts for a quarter (25 per cent) of all of Canada’s exports. It generates $45 billion per year in annual economic activity, employing 150,000 people directly and another 300,000 indirectly. It is also primarily a western economic activity: almost all oil and gas (95 per cent) is produced west of Ontario, and over 80 per cent of crude and about 66 per cent of natural gas is produced in Alberta. That said, the health of the industry is not only a significant economic issue, but a regional issue that impacts all Canadians.
Canadian business organizations have been issuing public statements through the week condemning the Liberals’ “greenhouse gas pollution cap” policy. The feedback to Guilbeault and the governing Liberals has been universally critical. The Canadian Chamber of Commerce released a statement, “… Such restrictions on oil and gas production could hinder energy trade, jeopardizing our shared economic and security interests. As Canada’s economy stagnates and concerns over productivity, energy security, and affordability rise, enforcing an emissions cap on the oil and gas sector would only exacerbate the financial burden on Canadians.”
Canadian Association of Petroleum Producers (CAPP) President Lisa Baiton sees the new regulations as a serious deterrent to investment in Canadian oil and natural gas projects, “The result would be lower production, lower exports, fewer jobs, lower GDP and less revenues to governments to fund critical infrastructure and social programs on which Canadians rely.”
In a written statement, the Canadian Association of Energy Contractors accuses Ottawa of being insensitive: “The Trudeau government does not care about Canadian blue-collar, middle-class energy workers who rely on the industry to support their families. It does not care about small, medium, and Indigenous energy service businesses that operate in rural and remote communities across Western Canada. And it certainly does not care about supporting our allies who are desperate for oil and gas from sources other than regimes such as Russia or Iran.”
There were a number of voices from the industry who spoke out in media this week. Kevin Neveu of Precision Drilling Corp observed, “We’ll be the only (oil and gas exporting) country in the world that’s going to have an artificially higher cost due to the emissions cap and the efforts we’ll need to invest in to reduce emissions to stay inside the cap.” Michael Belenkie of Advantage Energy said, “All we’re doing is we’re shutting ourselves down at our own expense and watching global emissions increase.” Kendall Dilling of the consortium Pathways Alliance put it this way: “A decrease in Canadian production has no impact on global demand — meaning another country’s oil will simply fill the void and the intended impact of the emissions cap is negated at a global level.” Eric Nuttall, senior portfolio manager at Ninepoint Partners LP, called the Liberal plan to cap Canadian oil and gas production as “economic idiocy.”
Commentary in western news organizations were equally blunt about the economic harm it will wreak. There was also disenchanted opinion pieces that zeroed in on Guilbeault as an unapologetic socialist and radical environmentalist, empowered by a prime minister desperately casting about for a political narrative to take the Liberals into the impeding election. For example, Lorne Gunter of the Edmonton Sun stated, “It is equally hard to escape the impression this is mostly a political move; an attempt by a desperate federal government to paint Alberta and Saskatchewan — provinces in which they are unlikely to win a single seat in the next election — as Confederation’s bogeymen, to shore up the Trudeau Liberals’ sagging support in fashionably “green” locations such as Toronto, Montreal, Ottawa and Vancouver.”
Trevor Tombe, a professor of economics at the University of Calgary opined, “(The emissions cap) is a wedge issue that’s going to be especially popular in Quebec. And I don’t think the (Liberals’) thinking goes much further than that.” Tasha Kheiriddin was similarly pointed in her National Post piece, “Smith’s fury isn’t just provincial posturing. This clash highlights a deeper issue: a federal government and a prime minister obsessed with virtue-signaling, shaming and ideological purity that ignores the struggles of average people.”
The Alberta capital’s flagship newspaper Edmonton Journal, David Staples called the Liberals’ announcement “a major trigger” and quoted Calgary investment expert Martin Pelletier as saying, “I’m telling you the stuff I’m seeing scares the sh-t out of me. Like the attack on small business, the capital gains changes, and the emissions cap, and it just keeps going on and on… If Trudeau gets another term, there will be billions of capital leaving the country.” Pelletier’s comments on Guilbeault were equally harsh, “His binary, black and white, dualistic approach is not going to solve the problem (of climate change). It’s just going to destroy the country, and somebody else is going to take that market share. It could be Iran.”
Last word goes to former Liberal MP Dan McTeague, who wrote a column in the Western Standard entitled, “Ottawa’s intentional destruction of western wealth.” McTeague warns, “But take heed: this isn’t simply an Alberta issue. This is a Canadian issue and one that everyone in Canada should be concerned about. The umbrella of Net Zero by 2050 is large and far reaching, and an emissions cap is simply one part of a multi-layered attack on our economy and way of life…. [it] will run counter to our national interests, and endanger the Canadian way of life for generations to come.”
Chris George is an advocate, government relations advisor, and writer/copy editor. As president of a public relations firm established in 1994, Chris provides discreet counsel, tactical advice and management skills to CEOs/Presidents, Boards of Directors and senior executive teams in executing public and government relations campaigns and managing issues. Prior to this PR/GR career, Chris spent seven years on Parliament Hill on staffs of Cabinet Ministers and MPs. He has served in senior campaign positions for electoral and advocacy campaigns at every level of government. Today, Chris resides in Almonte, Ontario where he and his wife manage www.cgacommunications.com. Contact Chris at chrisg.george@gmail.com.
