By Chris Bonasia

As Prime Minister Mark Carney releases his first official list of large infrastructure projects of “national interest,” a broad wave of building retrofits could better meet his goals and stimulate the economy, decarbonization experts say.

“Simply speeding up approvals for a few infrastructure projects does not build us a new country,” write Chris Severson-Baker and Monica Curtis, the Pembina Institute’s executive director and senior director for communities and decarbonization, in a recent op-ed for The Hill Times. “Going bigger and broader—focusing on infrastructure that could directly improve the lives of literally every Canadian and aiming to help solve numerous crises at once—now that’s smart, strategic, and forward-thinking nation-building.”

Their suggestion comes as the Carney government establishes processes to advance major infrastructure projects deemed in the national interest by streamlining their approval. Via the Building Canada Act, the government can designate such projects, and then issue a single federal authorization that replaces other federal permits, decisions, and authorities that would normally be required.

Passed on June 20 within a month of being introduced, the act has drawn criticism from environmental groups and First Nations, all warning that it risks bypass protections for ecosystems and Indigenous rights.

Severson-Baker and Curtis say the government should think differently about nation-building, especially when “there’s a nation-building initiative waiting in the wings.” Retrofitting homes and buildings affects how Canadians use energy every day, they argue, while delivering healthier, safer indoor spaces, more resilience to severe weather, and lower heating and cooling costs.

“Great big single projects and megaprojects have their place, and they are important, but we do want to make sure that we’re thinking about nation-building as more than megaprojects,” Curtis told Green Energy Futures. That means smaller, less time-intensive projects that can have a more direct impact on Canadians.

Retrofits and energy efficiency investments align with the goals of the Building Canada Act, Severson-Baker and Curtis add. They support “made-in-Canada” energy resources like rooftop solar and battery storage while creating long-term, local jobs. “Investments in retrofitting buildings can generate $7 in GDP growth for every $1 invested.”

“What if we looked at nation-building not only via single projects, with a primary proponent, location, and outcome? What if we developed nation-building programs—like retrofits for multi-family units—addressing many societal needs at once, and in the process creating a wave of economic activity, including new Canadian industries and supply chains?”

Efficiency standards and federally supported retrofit programs meet the criteria for projects of national interest, including strengthening autonomy, resilience, and security, providing economic or other benefits, bearing a high likelihood of successful execution, and contributing to clean growth and to meeting Canada’s objectives with respect to climate change, they add.

“We see residential building retrofits as a nation-building opportunity—exactly the kind of project the Cabinet has been tasked with prioritizing,” write Raidin Blue and Sarah Snowdon, Pembina analyst and senior communications lead, in a separate op-ed.

A Canada-wide renovation wave focused on deep retrofitting building stock can lower heating and cooling bills, improve housing affordability, and create up to 200,000 jobs, they say. And ramping up retrofits could deliver $48 billion in annual economic development over 20 years—paying for themselves “twice over through increased tax revenue.”

Neither post specifies how retrofits will advance the interests of Indigenous peoples, one of the criteria for identifying national interest projects. However, organizations like Indigenous Clean Energy have advanced building retrofit programs—like the Bringing it Home Project—as a way to address health and housing affordability issues in First Nations, Inuit, and Métis communities.

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By E. Richard Gold, Cristina Vanberghen

Artificial intelligence (AI) is rapidly transforming sectors from health care to climate science. But amid the global scramble to lead this technological revolution, one truth is becoming clearer: data, its platforms and its circulations, have become critical infrastructure. And Canada, poised to host this year’s G7 Leaders Summit, has a rare opportunity to shape the rules that will govern AI globally.

Under the leadership of Prime Minister Mark Carney, the federal government elevated AI and digital innovation to a central pillar of national policy, and appointed Evan Solomon as minister of artificial intelligence and digital innovation. But ambition is not enough — Canada must now back its rhetoric with action that resonates at home and abroad.

Infrastructure intelligence

While AI headlines often focus on breakthroughs in generative models and robotics, the real engine of progress lies in less glamorous terrain: computing infrastructure and data systems.

Canada’s proposal to build “next-generation data centres” is about creating the backbone for globally competitive and ethically governed AI. Without these facilities, modern AI systems cannot be trained, validated or deployed responsibly.

AI models — like those used in medicine for developing new drugs and health services, clean technologies such as clean energy and carbon-capture or materials science — require enormous computational power and massive datasets. That data must be structured, validated and — to the extent possible — open to those who can use it.

Quality assurance

Our recent study underscores that the future of AI depends less on algorithmic cleverness and more on data quality and accessibility. Poorly labelled or fragmented datasets can introduce bias, reduce model performance or even endanger lives when used in health or safety applications.

Yet across many domains, useful data remains siloed and locked in proprietary formats, lacking documentation or inaccessible due to legal and technical barriers. This status quo serves monopolies, not society.

Canada holds the G7 presidency in 2025, and can provide leadership in data governance and AI innovation. A central priority should be to rally partners around a framework for ethical, accessible and well-designed datasets, especially in fields like health, climate science and materials research.

Tailored data

Our call for open data isn’t one-size-fits-all. It must be tailored to the needs of specific sectors:

• Health-care AI requires anonymized patient data, genomic sequences, protein structure data, toxicology and carcinogen data, and drug response datasets.
• Climate AI needs long-term environmental records, satellite imagery, power and water use information and real-time emissions data.
• Materials science AI demands chemical interaction data, physical testing results, structural data and thermodynamic properties.

What binds these fields is a common challenge: ensuring data is ethically sourced, high-quality, and useable across borders and institutions. Canada’s role should be to help build the platforms — digital, legal and diplomatic — that make this possible.

A G7 mandate

As host of the G7 in June, Canada can push for a transformative international commitment. At a minimum, this should include:

1. Common standards for open datasets, co-designed with input from AI developers, health professionals, climate researchers, materials scientists and legal experts.
2. Trusted data hubs, managed by public-private or non-profit entities, ensuring secure storage, privacy safeguards and public access.
3. Legal and diplomatic co-ordination, addressing cross-border data sharing, intellectual property constraints and ethical governance frameworks.

These steps would position the G7 — and Canada in particular — as a champion of AI that serves democratic values on top of commercial and geopolitical interests.

Canada’s risks and opportunities

Canada is not starting from scratch. The country boasts leading AI research institutions, including the Vector Institute and Mila, and has pioneered open science partnerships such as the Montreal Neurological Institute’s Tanenbaum Open Science Institute and the Toronto labs of the Structural Genomics Consortium.

Dataset platforms such as AIRCHECK(for AI-based chemical knowledge) and the CACHE competition (evaluating drug discovery models using open data), show how Canada is already putting together the building blocks of responsible AI. But the country risks squandering this advantage if it cannot scale these efforts or retain innovation domestically.

The stalled Artificial Intelligence and Data Act is a case in point. While the European Union moved forward with its AI Act, the General Data Protection Regulation and the European Health Data Space Regulation, Canada’s legislative framework remains in flux.

Without clear domestic rules, and a proactive global agenda, Canada could end up as an incubator for innovations that end up developed and applied elsewhere.

Global stakes

The AI race is not just about who builds the most powerful models. It’s about who defines the technical, ethical and geopolitical standards that shape the digital future.

The G7 offers Canada a moment of strategic clarity. By investing in AI infrastructure and leading an international agenda on open, trustworthy AI, Canada can lead in shaping the rules.

The post Canada has a chance to lead on AI policy and data governance at the 2025 G7 Leaders’ Summit appeared first on Thoughtful Journalism About Energy's Future.

By Ian Urquhart

“Alberta is a place soaked in self-deception.” Those words began Alberta-based journalist Mark Lisac’s 2004 book aimed at shattering the myths that have unhelpfully animated too much of Alberta’s politics over the past few decades.

Current and former Alberta politicians are once again embracing and treating separatist grievances seriously. That means it’s time once again to highlight and challenge political misconceptions that have the potential to destroy Canada.

Oil is the root of one such myth. The misconception? That Ottawa perennially opposes the oil and gas sector and is determined to stop its continued growth. The National Energy Program (1980), the Northern Gateway pipeline project (2016), the Energy East Pipeline (2017) and the proposed greenhouse gas pollution cap allegedly prove Ottawa’s hostility.

Notably missing from these grievances is the Keystone XL pipeline and the Trans Mountain Expansion Project. Ottawa supported these projects aimed at transporting Alberta oil sands crude to foreign markets. The federal government even purchased the Trans Mountain project from Kinder Morgan in 2018 — not to kill it, but to build it.

Read more: Justin Trudeau’s risky gamble on the Trans Mountain pipeline

As for Keystone XL, Alberta Premier Jason Kenney thanked Prime Minister Justin Trudeau for supporting the project. This doesn’t fit the separatist narrative, so it’s largely ignored.

Oil sands booster

No one should dispute the National Energy Program’s devastating impact on Alberta’s conventional oil and gas sector 40 years ago. But the oil sands, not conventional oil, propelled Canada to its position as the world’s fourth largest oil producer.

Has Ottawa facilitated or obstructed the spectacular post-1990 growth of oil sands production?

The record shows that, since the mid-1970s, Ottawa has facilitated and supported the oil sands sector. The federal government helped keep the Syncrude project alive in 1975 when it took a 15 per cent interest in Canada’s second oil sands operation.

Ironically, Ottawa’s enthusiasm for more, not less, petroleum from the oil sands also appeared in 1980 via the National Energy Program (NEP), the devil in Alberta’s conservative catechism. What most accounts of the NEP don’t mention is that Ottawa offered tax benefits to oil sands companies while stripping them from conventional oil producers.

Furthermore, the NEP’s “made-in-Canada” pricing effectively guaranteed Syncrude would receive the world price for its production. At $38 per barrel, Syncrude received more than double what conventional producers received. If the NEP was harsh on conventional oil producers, it helped create a golden future for the oil sands.

In the mid-1990s, Ottawa helped propel the post-1995 oil sands boom. The industry-dominated National Task Force on Oil Sands Strategies sought federal tax concessions to promote oil sands growth. The federal government delivered them in its 1996 budget, despite Prime Minister Jean Chretien’s general concern with cutting the deficit.

Again, these measures clearly contradict the myth of federal opposition to the oil industry.

Generous emissions caps

Ottawa’s policy favouritism towards the oil sands didn’t end there. It has consistently animated the federal government’s treatment of the oil sands in its climate change policies.

The federal Climate Change Plan for Canada (2002) treated oil and gas leniently. Its measures for large industrial emitters bore a striking resemblance to the climate change policy preferences of the Canadian Association of Petroleum Producers. Suncor and Syncrude, the two leading oil sands producers, estimated these federal proposals would add a pittance, between 20 and 30 cents, to their per barrel production costs.

Justin Trudeau’s response to Alberta’s 2015 oil sands emissions cap also underlined Ottawa’s favouritism, not hostility, to the dominant player in Canada’s oil patch.

Rachel Notley’s NDP government set this cap at 100 million tonnes of GHG per year, plus another 10 million tonnes allowed to new upgrading and co-generation facilities. This cap was a whopping 39 million tonnes or 55 per cent higher than what the oil sands emitted in 2014.

This generous cap contributed to a tremendous increase in oil sands production. Healthy profits became record profits in 2022. Ottawa embraced Alberta’s largesse, incorporating the province’s cap into its post-2015 climate policies.

Furthermore, Ottawa increased its leniency towards the oil sands by exempting new in-situ (non-mining) oil sands projects in Alberta from the federal Impact Assessment Act. This exemption applies until Alberta’s emissions cap is reached. Canada’s latest National Inventory Report on greenhouse gas emissions reported record oil sands GHG emissions of 89 million tonnes in 2023, still 11 million tonnes shy of the 100 million tonne threshold.

Weaponizing myths

Finally, we have today’s proposed national cap on greenhouse gas emissions. Alberta is apoplectic about the cap. But whether or not it’s intentional, Premier Danielle Smith’s outrage feeds into secessionist sentiment by seemingly misrepresenting the cap’s impact on oil and gas production.

Smith and her environment minister use the work of the Parliamentary Budgetary Officer (PBO) to nurture their “Ottawa hates oil” narrative. They claim the officer’s analysis of the cap’s economic impact showed it “will cut oil and gas production by five per cent, or more than 245,000 barrels per day.”

This is simply not true.

In fact, the PBO concluded that, with the cap, oil sands production “is projected to remain well above current levels” — 15 per cent higher than in 2022. The proposed federal emissions cap, like the Alberta NDP’s cap of a decade ago, is higher than current oil sands emissions levels. The PBO concluded the proposed ceiling for oil sands emissions would be six per cent higher than 2022 emissions.

Ottawa’s proposed cap, in fact, continues its decades-long support of the oil ands.

Myths are central to our being. When I tell my grandsons about the pot of gold at the end of the rainbow, I hope to inspire curiosity, imagination and interest in their grandmother’s Irish heritage.

But in politics, fanciful stories can be dangerous. Some weaponize myths, using the fictions at their core to encourage followers to let falsehoods rule their behaviour. That seems to be playing out yet again in Alberta. We must demand better from the political class.

The post Opinion: Alberta has long accused Ottawa of trying to destroy its oil industry. That’s a dangerous myth appeared first on Thoughtful Journalism About Energy's Future.

By Leah Levac, Jane Stinson, Leah M. Fusco

Canada’s recent federal election was regularly dubbed one of the most consequential of the last 50 years. Economic and sovereignty threats from United States President Donald Trump were key issues in the campaign. In response, pledges about energy infrastructure and resource development played an important role in party platforms.

We have been studying impact assessments, the uneven consequences of resource development and sustainable energy transitions for over 15 years. We’re concerned about what and who may be overlooked as the government moves to become “an energy superpower,” in part by getting projects “done faster and better.”

We’re also interested in how the newly elected Liberal government can support more just energy transitions — that is, moving toward low carbon energy and economies that prioritize equity for workers and communities.

Read more: How to ensure Alberta’s oil and gas workers have jobs during the energy transition

Challenges with Liberal promises

The Liberal Party platform includes renewed attention to an east-west energy corridor. It also promises to speed up and streamline the review of major resource projects and “get big projects built quickly” by “shifting the focus of project review from ‘why’ to ‘how.’”

The platform also promises more support for Indigenous participation in major projects and commits to using Gender-Based Analysis Plus — or GBA Plus — in policies and programs. GBA Plus is a method for assessing how diverse groups of people experience policies, programs and initiatives.

Through our research, we have advocated strongly for applying GBA Plus in the resource sector, including by centring community knowledge in impact assessments and proposing strategies for improving how Indigenous women’s experiences and knowledge are considered in impact assessments.

Over the last year, we also produced — along with our colleague Deborah Stienstra — two major research reports for the Impact Assessment Agency of Canada. Both were on the application of GBA Plus in regional assessments for offshore wind in Nova Scotia and Newfoundland and Labrador.

Regional assessments are a planning tool used before specific projects are proposed. They help identify important issues to consider if specific project assessments — for instance, for critical mineral mines, offshore wind projects or other resource developments — are conducted. If done well, regional assessments can help with more equitable and efficient project planning and development in the long run.

What do the findings from our work in this area suggest in terms of how the Liberal government should proceed with its energy vision?

Duty to consult

The 2019 Impact Assessment Act requires meaningful execution of the duty to consult with Indigenous people affected by a major economic development.

The Liberal Party made important promises to advance Indigenous participation in major projects and to double capacity support so more Indigenous communities can take an active role in project decisions at various stages.

But what the Liberal platform overlooks is Indigenous Peoples’ right to resist and refuse developments in their territories, or how specifically to ensure that Indigenous women and gender-diverse people are meaningfully engaged.

Moving forward, the Liberals must meet their constitutional duty to consult with Indigenous Peoples, while being guided by the United Nations’ principle of free, prior and informed consent per legislation that confirms Canada’s commitment to the UN’s Declaration on the Rights of Indigenous Peoples.

GBA Plus

During the campaign, the Liberal Party reiterated its support for GBA Plus by listing it as one of six key themes in its Make Canada Strong vision.

The Liberals seemingly recognize that GBA Plus is an important tool for advancing equity for women, gender-diverse people, people with disabilities and racialized people by:

“Identifying direct and indirect benefits of programs (e.g. job opportunities, access to programs and services) … and considering how these benefits will be distributed across diverse groups.”

The Liberal platform does not explicitly raise GBA Plus in relation to becoming an “energy superpower.” But GBA Plus has been gaining attention in the resource sector — particularly in relation to the development of specific projects — since the requirement to consider “the intersection of sex and gender with other identity factors” was included in the 2019 Impact Assessment Act.

GBA Plus needs to be applied in project-specific assessments (for specific developments, such as mines and hydroelectric dams) and in planning assessments (like regional assessments).

In our work on the regional assessments for offshore wind in Nova Scotia and Newfoundland and Labrador, we demonstrate the value of applying GBA Plus throughout all impact assessment processes.

Doing so helps strengthen community engagement efforts, identify potential effects early, determine the data sources required for monitoring those effects, fill data gaps and highlight barriers that prevent diverse groups of people from benefiting from energy projects.

For example, without adequate child-care options, many women cannot access the high-paying jobs that sometimes accompany resource projects. The Liberal government’s support for GBA Plus must therefore be explicitly incorporated into its energy proposals.

What and who is lost with fast tracking

A just energy transition is one concerned not only with planetary survival, but also with the effects of the transition on people who will be most affected.

The Liberal party’s vision for becoming an energy superpower includes “conventional energy resources” (like oil) as well as clean and renewable energy (like solar and hydro) and critical minerals needed to support decarbonization and energy transitions.

We disagree with the Liberal Party’s commitment to “shifting the focus of project review from ‘why’ to ‘how.’”

We need to ask how — and even whether — an energy project contributes to a just transition. Answering questions about whether projects will meet climate commitments and help advance equity for workers and communities is critical. These questions are best asked early, during planning phases and as part of regional assessments, before specific projects are proposed.

The duty to consult, GBA Plus and just energy transitions are interconnected and necessary commitments for sustainable energy production.

Together, they can contribute to a relationship with Indigenous Peoples that recognizes their sovereignty and to a more equitable and sustainable future. But these commitments cannot be meaningfully realized when fast-tracking development, because they require time and relationship-building.

Prioritizing fast-tracking — thereby falling short on these priorities and legal commitments — will backfire. It will lead to delays rather than more efficient processes, and will worsen existing inequities.

The post Opinion: Mark Carney wants to make Canada an energy superpower — but what will be sacrificed for that goal? appeared first on Thoughtful Journalism About Energy's Future.

By Tik Root

President Donald Trump came into office promising to “drill, baby, drill” and, on day one, signed an executive order aimed at “Unleashing American Energy.” On Friday, just over 100 days later, oil companies released their first quarterly earnings reports of Trump’s second term. They weren’t pretty.

The two largest oil companies in the United States saw revenues tumble. Earnings at Exxon Mobil fell 6 per cent compared to last year, to $7.7 billion. Chevron’s first-quarter income dropped more than a third, to $3.5 billion. “We are seeing significant downward pressure on prices and margins,” Darren Woods, chief executive of Exxon Mobil, said during a call with analysts on Friday. “In this environment, it is more important than ever to focus on what we can control.”

This caps a three month stretch — and the first 100 days of an administration — that saw oil executives swooning at the possibility of a boom. But since President Trump has taken office, headwinds have mounted.

The price of a barrel of oil has fallen from almost $80 to about $60 since his inauguration, sweeping new tariffs have made things like steel costlier, and economic uncertainty has made planning considerably more challenging. According to Baker Hughes, an oil field service provider, the number of drilling rigs in the nation’s largest oil field, the Permian Basin, has fallen about 3 per cent over the last month.

“There seems to be a lack of continuity in the policymaking that affects that industry,” said Sanjay Srinivasan, a professor of petroleum and natural gas engineering at Penn State University.

On the one hand, President Trump declared a national energy emergency within hours of taking office and has been pushing for an expansion of fossil fuel extraction. The Department of Interior, for example, announced plans to open more tracts of public land to drilling, including in the Arctic. It also moved to shorten the permitting process for projects from as long as two years to 28 days.

“They are fast-tracking dangerous, disastrous projects that are going to put the health and safety of people, the water, and the environment at risk,” said Jasmine Vazin, deputy director of the Beyond Dirty Fuels Campaign at the Sierra Club, pointing to the Line 5 pipeline in Michigan as one example. “This is what [oil companies] wanted.”

At the same time, the president has called for oil prices of $50 a barrel, which would decimate the industry. “At $50-per-barrel oil, we will see U.S. oil production start to decline immediately and likely significantly,” one anonymous executive responded in a Federal Reserve Bank of Dallas survey. “There cannot be ‘U.S. energy dominance’ and $50-per-barrel oil; those two statements are contradictory.” Others reported already cutting future capital expenditures based on the administration’s ambitions.

Trump’s tariffs have also taken a toll on oil companies by raising the cost of the steel they rely on for wells and other equipment, as well as likely slowing global demand for oil, which generally drops along with economic activity. Foreign producers deciding to increase output, including an OPEC+ announcement last week to boost its supply by more than 400,000 barrels a day in June, has only compounded domestic pressures.

“I have never felt more uncertainty about our business in my entire 40-plus-year career,” said one executive in the Federal Reserve survey. Another added: “Tariff policy is impossible for us to predict and doesn’t have a clear goal. We want more stability.”

Whether the Trump administration can bring that stability remains an open question. Even if it does, there’s no guarantee that American oil output — which was already at record levels before Trump took office  — can grow significantly, or that it will create more jobs. It’s also unclear if Trump cares.

“I’ll get those guys drilling,” he told supporters in Greenville, North Carolina, in November. “If they drill themselves out of business, I don’t give a damn.”

So far, that seems to be the trajectory. A Wall Street Journal analysis found that American oil-and-gas companies lost more than $280 billion in stock-market value between April 2, when Trump unveiled his tariff blitz, and Monday.

That drop outpaced that of every other major sector.

The post Trump promised to help Big Oil. Its revenues plummeted. appeared first on Thoughtful Journalism About Energy's Future.

By Mitchell Beer

This Weekender mostly combines material we published in late February and early April, but the context is a bit more urgent…again.

Monday is Election Day in Canada, and with less than 100 hours to go before polls open, Donald Trump reinserted himself into the campaign, telling TIME Magazine he’s “really not trolling” with his mutterings about turning us into a 51st state.

In an interview published Friday, Trump brought the focus back to the annexation threat that The Weekender and many others have been warning about for months. He repeated his false claims that the U.S. is subsidizing Canada, declaring that “the only way this thing really works is for Canada to become a state.”

“It now seems increasingly obvious that Trump’s expansionist aspirations are no fleeting fancy,” CBC writes. “He kept quiet for a while, leading some to wonder whether he’d gotten it out of his system.” But “in recent days, the president has been blunt in different encounters with media that he seriously would love to see Canada become a state.”

Trump’s apparent seriousness about annexation leads to two questions, the answers to which may well be shaped by the election results Monday night:

• What are the prospects for Canada to form new trading relationships with other regions and countries that are facing Trump’s malignant wrath, to diversify our economies and stand together against a common threat?

• How can climate and energy strategy become part of the glue that holds this new alliance together, and what policies and real-world actions will Canada need to join in?

The World Pushes Back

The astonishing thing over the last few weeks was not that Donald Trump went ahead with his threat to blow up the global trading system by imposing tariffs on about 60 countries, including two economically mischievous islands populated only by penguins.

It was that the rest of the world was so fast to push back, ready and determined to move on from an era of U.S. economic dominance. That a promising approach to building a new trading bloc that bypasses the rogue regime in the White House went from online conversation to serious proposition in scarcely a week.

That if you surveyed the scene from just the right angle, a new, emerging bloc might be able to cover more ground and tackle multiple problems at once by pivoting to low-carbon goods and real decarbonization technologies.

And that Canada might yet place itself at the centre of the world’s next great, low-carbon trading alliance, as long as our incoming federal government has the insight and inclination to play along. (Which is a longabouts way of saying…your vote matters.)

In the 100 or so hours after Trump’s self-styled “Liberation Day” announcement earlier this month, we saw a fast flurry of analyses on the slapdash, amateur-hour process behind the decision, the immediate impact on jobs, a shock reaction from global stock markets that has continued through the month, and the apparent certainty that this spells the end of global trade as we’ve known it.

But there are more interesting, even hopeful and positive questions to ask, beginning with:

If every end is also a beginning, what’s next?

If the tariffs are really dealing a death blow to the established international trading system, what if this undercuts the fossil fuel industry as badly as Trump’s direct hostility and interference have devastated the U.S. renewable energy sector and climate justice community?

For Canada, now that we’ve declared that there’s no way back to an era when our economy was over-dependent on our neighbour to the south, what else do we gain by getting closer to countries that are farther along on their climate and decarbonization journey?

And how can we work with our future trading partners to accelerate the shift?

Sleeping Beside an Elephant

The roiling, ranting, manufactured crisis that Donald Trump has brought to our doorstep has communities, countries, and whole continents scrambling for solutions. So we might as well admit and embrace the reality staring right at us—Trump has created a moment when the sense of what’s “realistic” gets tossed in the air, when unexpected lines of thought suddenly make a whole lot more sense.

For Canada, that response begins with a level of unity and shared purpose that we haven’t seen in many decades—prompting former prime minister Jean Chrétien to slyly declare that he would have nominated Trump for an Order of Canada if only the honour were available to convicted criminals.

It extends into some serious, long-overdue conversations about how to make our economy truly independent. We’ve always known we were sleeping beside an elephant, as Prime Minister Pierre Trudeau told the Washington Press Club in 1969.

But there’s been little serious talk about dialling up our economic relationships in other parts of the world sufficiently to dial back our dependence on the U.S. Until now.

It began with a post by Social Capital Partners Chair Jon Shell, suggesting a new trading bloc with the economic clout to survive, thrive, and leave the United States behind.

“We know what Donald Trump is afraid of,” he wrote on LinkedIn. “Now let’s organize around it.”

The EU, UK, Canada, Japan, South Korea, and Australia (I’m now calling them “EU + 5”) collectively have 760 million people and control 34% of the global economy and vast quantities of natural resources. We are an obvious threat to the U.S. and to China if we were to organize.

The best way to beat a bully is for the rest of the group to rise up against him.

The rest of Shell’s scenario is that much more plausible in the year when Canada holds the rotating chair of the Group of 7 forum of industrialized nations, and will be hosting the G7 leaders’ summit in June.

The most powerful signal to give Trump would be for this group to meet in a very public way, ideally in Canada, so the meeting would play out on American TV in the right time zones. The stats on the economic and resource might of this new group would scroll across the bottom of Fox News. [If we can assume that Fox would even carry the story—Ed.]

A joint statement at the end pledging to work together as friends and allies to ensure a resilient and prosperous future for our populations would be a powerful message. Quick wins could be action on Ukraine and munitions manufacturing.

First and last, it needs to be 100% clear—and for Trump, spelled out with a Sharpie in simple, single-syllable words with lots of golf analogies—that no one is taking this lying down.

“My strong recommendation to Canada, Mexico, Japan, the United Kingdom, and the European Union is to join together to create a free trade zone that excludes the United States, imposing at least a 10% tariff on all imports from America,” writes Bill Clinton-era U.S. labour secretary Robert Reich. “Don’t negotiate. Do this now so you’ll be negotiating from a position of power.”

G7? Meet the ‘Free 7’ (By Comparison)

As Reich’s formula suggests, a useful add-on to Shell’s thinking would be to build on Canada’s relationship with its more reliable trading partner in North America by including Mexico in an EU + 6.

And by declaring an emphasis on clean energy and decarbonization trade, the countries could jump-start their economies after Trump’s tariff attack, boost affordability and local self-reliance across the entire bloc, support Ukraine’s reconstruction, and prevent military conflict in the first place—and oh, by the way, move closer to meeting their climate targets.

The focus on climate and carbon would be consistent with the accelerated priorities the European Union has been setting since 2022, when Vladimir Putin’s invasion of Ukraine turned energy efficiency and renewables into a geopolitical security strategy for countries that were too dependent on Russian gas.

And this general line of thought has been gaining traction. Within a week, the idea of a wider trading bloc had broken out from social media and Substack newsletters to general media in a Toronto Star post by John Austin, a nonresident senior fellow at the Washington, DC-based Brookings Institution. His formulation brought together the EU, Japan, the UK, Canada, Mexico, South Korea, and Thailand in a group of nations that “would dwarf the U.S., as well as the economies of China combined with its ally Russia.”

Given America’s new stance, now is the time for the G7 member nations to disinvite the U.S. from the group, and morph to a new organization: a “Free 7.” It would be a new forum in which the nations that still believe in democracy, free markets, freedom of expression, and free trade would collaborate to strengthen their collective hand and push back against authoritarians—which now includes the U.S.

The work of the new Free 7 would be the urgent task of building an international coalition that stands up to the authoritarian axis—and successfully contains it. This means standing up to pressure from the U.S.

Take this as a thumbs-up for the basic idea, not necessarily the branding Austin attaches to it. It would take a whole other edition of The Weekender (or more) to unpack what we mean by “Free” and how well or widely it applies to the countries in the group, certainly including Canada.

But the point of contrast with full-on authoritarians like Trump still makes a lot of sense—to counter the rush to fascism that we’re seeing in the U.S. and, if it goes this way, to reignite the response to climate change and the energy transition. That general line of thought makes South Korea an interesting addition to the group after an unequivocal population pushed back against an egregious assault on the country’s democracy—unlike their U.S. counterparts, who splintered in response to Trump’s 2020 election loss and the deadly insurrection attempt that followed.

Carbon is the New Tariff

In February, The Weekender reported that the emerging, global demand for low-emissions trade isn’t just a North American phenomenon—nor even a trend that North America is leading. And that carbon controls could soon become the new tariff.

The European Union adopted the world’s first carbon border adjustment mechanism (CBAM) in 2023, and its implementation is set to begin this year. That bit of progress landed in the middle of the Liberal leadership campaign earlier this year when then-candidate Mark Carney proposed to replace the hated consumer carbon tax by introducing a CBAM regime with other like-minded countries.

That thinking leads toward a plausible and really promising future where climate impact is a key criterion guiding trading relationships, as long as the system is rigorous enough to deliver real-world results. If a country is seriously and measurably reducing emissions, it qualifies. If it isn’t, it gets politely but firmly left behind.

As far back as January, Canada’s future trading partners were already making moves in the right direction. In the first week after Trump’s inauguration, a small flurry of analysis indicated that the rest of the world was moving on—not least because countries have already seen eight years of punitive, provocative U.S. tariffs under the Joe Biden presidency as well as Trump 1.0, and they’re quite rightly fed up.

The trend was most definitely paralleled by an emerging, global shift in energy priorities. “Most major economies are investing in ever-cheaper solar and wind power,” the New York Times wrote. “Even as coal, oil, and gas still power the global economy, and more fossil fuels are burned year after year, the movement globally is toward heavy investment in solar, wind, and batteries, the prices of which have fallen sharply in recent years.”

Time to Stand for What Matters

But in international trade relations, as in the fight against climate change, standing against what we can’t and won’t accept is just half the battle. The next successful trading bloc will only fulfill John Austin’s vision of a “Free 7” if we’re very clear and deliberate about the kind of economic activity we want.

In a Toronto Star op ed, Savanna McGregor, Grand Chief of the Algonquin Anishinabeg Nation Tribal Council, said Conservative Leader Pierre Poilievre’s “Canada First” National Energy Corridor wouldn’t meet that standard.

Reading Mr. Poilievre’s announcement, I am left wondering why it does not mention Indigenous people even passingly, other than to expect fancifully that we give “approval … before any money is spent.” Surely he knows Canada’s constitution requires Indigenous consultation, accommodation, and ultimately consent to build major infrastructure inside his National Energy Corridor? How can there be consultation (to say nothing of accommodation and consent) if the corridor is “pre-approved” before anyone has the blueprints for what infrastructure will be built and where?

McGregor asks how city dwellers would respond to word of a “pre-approved” major development in their own back yard, with no indication of whether it’s a school, a shopping mall, or a radioactive waste dump.

It sounds ridiculous and contemptuous, yet this is exactly how Mr. Poilievre and many others hold Indigenous communities today (there is a radioactive waste dump on Algonquin land right now). Obviously, pushing a development decision without identifying the development would never fly in a city where the residents have no constitutional right to be consulted—so it definitely will not fly for Indigenous people having that right.

“Ironically, the pre-approved corridor Mr. Poilievre wants to speed development up would nearly paralyze it,” McGregor wrote, citing court cases that would slow down a campaign promise that she describes as a “war with Indigenous nations”.

Then there’s the question of who gains if those projects are fast-tracked. In a separate post for the Star, Toronto Metropolitan University associate professor Shari Pasternak and Emily Lowan, fossil fuel supply lead at Climate Action Network Canada (of which Energy Mix Productions is a member), connected dots to some of the main movers and shakers in Trump’s inner circle. Which means that projects like the Prince Rupert Gas Transmission (PRGT) pipeline and the Ksi Lisims LNG export terminal “are now making Canada vulnerable to Trump’s predatory goal of North American energy dominance.”

Pasternak and Lowan wrote:

The solution is not to copy Trump’s “drill, baby, drill” approach with a thin gloss of maple syrup over top; it is respect for Indigenous jurisdiction and a just transition from fossil fuels to clean energy. Canadian pride should come from ethical investment and reconciliation—not backstopping U.S. corporations.

We’ve all heard the too-easy, too-glib line that a crisis is a terrible thing to waste. And once, just once, I wish the pundits and prognosticators who keep talking that way would turn their attention to the climate crisis and the fossil fuel industries that drive it. Or the nature and biodiversity crisis. Or the food security crisis. Or the multiple, wrenching human rights crises going on around the world as we virtually speak. No need to be fussy.

But here’s the thing so many of us have been hoping for—since the U.S. election result in November, and since around 8:10 PM Eastern last June 27, as we watched then-U.S. president Joe Biden implode onstage in his debate against Trump. Faced with the worst we’ve ever seen from Trump, the #ElbowsUp mantra is extending far beyond Canada, into a global coalition so wide that it might be able to withstand this moment, recover, thrive—and thrive green.

There are no guarantees, and it’ll take a while to see how things land. But the first step in building the solution we need is to envision it. And over the last few weeks, that’s been happening.

The post Opinion: Trump is serious about annexing Canada. How will climate and energy policy bring us the allies we need? appeared first on Thoughtful Journalism About Energy's Future.

By Mitchell Beer

There’s still a long way to go before the votes are counted in Canada’s April 28 federal election, longer still before we see whether the party platforms have any more substance than the mostly virtual paper they’re written on.

But if some of the campaign pledges and side conversations we’ve seen over the last week are still standing on the morning of April 29, we may be entering a period where endless, performative debate gives way to pragmatic action and getting stuff done. And just in time to help build a new “coalition of the willing”, an alliance of countries standing against Donald Trump’s moves to reshape the global economy in his own chaotic image.

It’s so easy and, let’s be honest, so tempting during an election campaign to react to every issue or policy statement through a partisan lens. But that’s a line that non-profits and charities are necessarily careful not to cross, and you won’t see Energy Mix Productions endorse any candidate or party in this or any other election.

That still leaves the door open for an essential conversation about the practical actions and real-world change we need over the next four years, and what the party platforms tell us about how they plan to respond.

The Answers You Should Want to Hear

Let’s start with some of the enduring questions and priorities that should be on all of our minds, whether or not there’s an election on:

• What are the most practical, achievable, affordable paths that can still transform Canada’s economy and energy systems and get us to zero emissions by 2050?

• How do we make sure that everything we do tackles multiple, interconnected crises at once, so that our actions on energy and climate change make day-to-day life safer, more affordable, and more fair and equitable for all?

• What are the common sense steps that will make a real difference in the manufactured global crisis brought to us by the rogue regime in the White House—to protect and strengthen Canadian sovereignty, restore international cooperation on issues from climate change to health to nature protection and more, and help lead the way to a new international trading bloc that leaves Donald Trump and his clown car full of henchfolk behind?

• How do we build on the moment of national unity Trump has handed us to restore trust and cohesion across the country and its regions? Not by ignoring or averaging out our differences of opinion and partisanship, but by finding the deeper values and priorities (like, y’know, not becoming a 51st state) that unite us?

With this line of questioning, we can assess the major candidates and their platforms based not on any prior party preference, but on the future they seem most likely to deliver if we give them the chance. For better and for worse, the Liberal and Conservative camps have made it pretty easy to compare and contrast—one of them by reading their lips, the other by trying to read their minds.

Read Their Lips

On the Conservative side, party leader Pierre Poilievre has done us all the great courtesy of eliminating all ambiguity about his proposed “Canada First” National Energy Corridor. On a campaign stop in St. John’s April 1, he fully endorsed a letter from 14 fossil fuel CEOs that demanded the next federal government declare a “Canadian energy crisis” and “use all its available emergency powers” to fast-track fossil fuel export projects while gutting federal regulation.

The Conservatives pledged to repeal the federal Impact Assessment Act and the West Coast tanker ban, set a six-month approval deadline for major megaprojects along a pre-approved fossil energy corridor, walk away from the federal emissions cap on oil and gas, and eliminate an industrial carbon tax that has been praised as one of the country’s most effective emission reduction measures.

With those words, Poilievre also eliminated any hope that the new export pipelines he’s promised will go into service until long after the Trump-induced trade crisis is over, and demand for oil and gas has gone into permanent decline. Savanna McGregor, Grand Chief of the Algonquin Anishinabeg Nation Tribal Council, warned that Poilievre’s promise to “pre-approve” projects along the corridor would “nearly paralyse” the work rather than speeding it up.

“Surely he knows Canada’s constitution requires Indigenous consultation, accommodation, and ultimately consent to build major infrastructure inside his National Energy Corridor?” she wrote for a Toronto Star. “How can there be consultation (to say nothing of accommodation and consent) if the corridor is ‘pre-approved’ before anyone has the blueprints for what infrastructure will be built and where?”

Moreover, Poilievre’s boldly performative (performatively bold?) promise assumes a level of commitment we haven’t seen from some of the companies that are backing these projects. Andrew Leach, a leading energy and environmental economist based at the University of Alberta, recently took a deep dive into the 10 projects the Conservative leader wants to fast-track—and identified the ones that stalled out when their proponents failed to submit their environmental assessment paperwork. After going into the detailed history on one of them, he asks:

So, tell me dear readers: how is a @PierrePoilievre government going to overcome this hurdle? How, in a year, are they going to approve a project that, for 8+ years, has refused to submit a single environmental assessment document and has officially withdrawn its project?

Even when the companies are doing their homework, a new network of oil and gas pipelines along a corridor no one has agreed to isn’t the policy we need or want. Not unless we’re happy to see Canada’s greenhouse gas emissions increase through 2035.

One of the enduring lessons of Donald Trump’s return to power is that when they tell us what they plan to do, what pain and damage and loss they plan to inflict, it’s a good idea to believe them. And Poilievre, to his credit, is leaving no doubt.

Read Their Minds

The assessment is actually a bit more complicated on the Liberal side. Not because party leader Mark Carney’s energy and electricity sovereignty plan doesn’t hit some badly-needed touchpoints, but because the devil is in the details. And the details are all about delivery, an area where his party hasn’t always excelled over the last decade.

In his announcement last Wednesday in Calgary, Carney cast an east-west electricity grid as a “nation-building project” to “secure Canadians’ access to affordable, reliable, clean, Canadian electricity”. He committed to investing in the country’s “conventional and clean energy potential”, touted a new First and Last Mile Fund to kick-start critical mineral projects and build the clean energy supply chain, and pledged to issue decisions on new megaprojects within two years.

The Liberal Party news release and backgrounder ran long on language about clean and community energy, short on references to fossil fuels, and contained not a single nod to pipelines. In Calgary, Carney told media Canada would “choose its partners carefully, and work with those who share our values,” iPolitics reported at the time.

“Ignoring climate change,” he added, is “not only morally wrong, but economically wrong.”

The balance of stated priorities in the Liberals’ policy pronouncement was something the energy and climate crowd could only have dreamed of 10 years ago. But the announcement still received an appropriately cautious response.

“We’re glad to see the Liberal Party highlighting that investing in clean electricity capacity is critical for our sovereignty and economy,” Climate Action Network Canada Executive Director Caroline Brouillette said in a release. But “conventional energy” is still “a euphemism for continuing the status quo approach of expanding fossil fuels,” which translates into “pipelines going across Indigenous lands, many billions sunk into stranded assets, and climate harm caused by increased emissions that will come back to hurt us in the form of floods and wildfires.”

Hey, Let’s Try an Industrial Strategy!

The good news is that this is an industrial strategy, not an energy strategy, which means it has a chance of pushing past the policy paralysis on climate by making emission reductions the “co-benefit” rather than the focal point.

But if the Liberals win government and get a shot at putting action behind their words, everything will depend on the way the plan is developed, pitched, and implemented to make sure the climate gains and associated community benefits they promise actually materialize. Some questions to watch out for:

• How will every project genuinely contribute to a sovereign Canada’s energy and economic security by making energy more affordable, supporting local economies and job creation, boosting climate resilience, and reducing the climate pollution that disrupts our communities with ever-intensifying climate disasters?

• What steps will Canada consistently take to reduce demand for energy and resources before figuring out how to supply the rest, and how will that work be funded?

• How will the government move past checkbox consultation to make sure critical mineral or other renewable resource megaprojects keep community goals front and centre—in Indigenous country, and everywhere else?

• What standards will Ottawa enforce through a fast-tracked, single-window review process to protect health and well-being, look out for local ecosystems, and ensure that real benefits flow to communities that are too often left behind when megaprojects come to town?

• And where will a new government come down on measures like Sen. Rosa Galvez’ proposed Climate-Aligned Finance Act, which died on the order paper in the last Parliament and must absolutely be reintroduced—and adopted—when the new term begins?

Pro tip: All of these priorities—all of them—trace back to a least-cost energy strategy that relies on energy efficiency, renewables, and energy storage, not fossil fuels.

The post Opinion: On climate and energy, Canada needs pragmatics, not performance pieces appeared first on Thoughtful Journalism About Energy's Future.

By Emma Starke, Katya Rhodes

Reducing Canada’s greenhouse gas (GHG) emissions is not rocket science. Our policies need to make climate-related pollution more expensive via carbon pricing or more restrictive via performance regulations. Governments may also give tax breaks and grants to households and industries to foster low-GHG choices.

But climate-policy experts know from decades of evidence that without carbon pricing or regulations to decarbonize our energy system, population and economic growth will cause GHG emissions to rise.

Our analysis of the party platforms for the April 28 election shows that GHG emissions would fall by 2035 under the Liberal approach – even with the removal of the unpopular but effective consumer carbon tax. They would rise under the Conservative plan to axe existing performance regulations along with the carbon tax.

The Conservatives argue that investing in clean technologies – nuclear energy, hydroelectricity, tidal power and carbon capture, utilization and storage – and removing red tape around developing these options will reduce emissions, although they have not outlined the details of these promises.

However, experts have long known that energy-supply subsidy programs alone do not reduce emissions in the end-use sectors of industry, buildings, and transport.

In addition, neither the Liberals nor the Conservatives have announced details of the impact on emissions of any policies they might enact to combat U.S. President Donald Trump’s trade war, such as short- or medium-term expansion of oil and gas production or building new pipelines. Therefore, these have only a modest effect in our analysis.

Decarbonization does not happen overnight

Transforming the stock of electricity plants, vehicles, home heating and industries occurs only gradually as government policies induce lower-carbon choices when people and firms naturally replace aging equipment and vehicles.

Gradual adoption of low-emission technologies has enabled Canada’s emissions to flatten over the last 20 years despite a 25-per-cent increase in the country’s population. But that general trend masks a few key developments.

One big source of emission reductions was the closure of all coal-fired power plants in Ontario from 2005-15, followed by the closure of coal plants in Alberta. Offsetting those, however, has been the steady growth of emissions from transportation, as well as from the oil and gas sector.

Since 2015, the carbon pricing and performance regulations implemented by the Trudeau Liberal government in sectors such as industry, electricity and transportation have started to significantly reduce per-capita GHG emissions.

Mark Carney has given us a sensible next step after the carbon tax. We need to take it.

From 2019: Emissions will rise under Conservative climate plan

What should be in a plain-speaking Conservative climate plan

Before we “axe the tax,” a quick lesson in history and physics

Independent analysis shows future Canadian emissions falling, even with Prime Minister Mark Carney’s elimination of the consumer carbon tax.

These federal policies are key to ensuring that the national decarbonization effort is cost-effective and co-ordinated. Yet, the Conservatives led by Piere Poilievre promise to remove all or most of them if they form the next government.

The differences in the approach of the two main federal political parties are significant.

(We focused our limited time for this analysis on the two parties that pollsters suggest have the greatest chance of forming a government after the election. In addition, we use identical forecasts from Statistics Canada for population and GDP growth – the “medium growth scenario” – for both parties. We also note that our 2030 forecast is similar to analyses from the Canadian Climate Institute.)

Forecasting Canada’s GHG emissions under Liberal policies

Several independent energy-economy modelling teams have produced estimates of the effect to 2030 and beyond of current federal Liberal policies. The Canadian Climate Institute assessed these studies and provided an estimate of their impact to 2030.

We have produced a similar estimate, with one caveat. We do not analyze the effect of various subsidies such as tax credits and grants because all political parties promise these and they have only a marginal effect on GHG emissions. We focus instead on the key regulatory and pricing policies because these are the most important for reducing GHG emissions. These include:

• The industrial output-based pricing system to reduce the intensity of industrial carbon emissions;
• regulations to reduce methane emissions from oil and gas production;
• clean-fuel regulations requiring declining intensity of emissions from carbons in fuel;
• the electric-vehicle availability standard requiring increased sales of zero-emission vehicles;
• clean-electricity regulations requiring declining intensity of emissions from the production of electricity.

For our simulation of these policies, we used the CIMS energy-economy model, which has for decades analyzed GHG policies at the behest of leaders across the political spectrum. Because it takes years for policies to influence GHG trajectories, we ran the CIMS model to 2035.

Canadian GHG emissions are expected to be approximately 680 megatonnes of carbon dioxide equivalent in 2025. Our simulation shows that Liberal policies would reduce this to about 600 megatonnes by 2035 especially if the Liberals strengthen their industrial output-based pricing system as the Canadian Climate Institute has proposed.

Thus, while our forecast suggests the Liberals are not on a trajectory to achieve their national 2030 GHG target of a 40- to 45-per-cent reduction below 2005 levels, their policies would at least drive significant emission reductions by 2035.

While most economists would prefer Canada to retain the carbon tax because this is likely the most economically efficient policy, it is still possible to significantly reduce GHG emissions thanks to the Liberals’ remaining regulatory policies.

Forecasting GHG emissions under promised Conservative policies

The federal Conservatives have promised for years to remove the consumer carbon tax. But given Carney’s move to kill it, it is no longer a factor in our simulations of both Liberal and Conservative climate approaches.

However, the Conservatives have promised to also remove key existing Liberal regulatory policies that would drive decarbonization in the absence of a consumer carbon tax.

Specifically, Poilievre has committed to removing the output-based pricing system, the clean fuel regulations, the electric-vehicle availability standard and the clean-electricity regulations. The potential emissions-reduction contribution of these regulations grows in importance in the absence of the consumer carbon tax.

Figure 1 shows our forecast that emissions would increase to approximately 720 megatonnes in 2035 from 680 megatonnes in 2025 if the Conservatives remove these policies and don’t replace them with something else.

Specifically, without the emission-reducing pressure of the output-based pricing system, emissions from industry and oil and gas production would grow by about 40 megatonnes relative to today.

Emissions from transportation would be higher with the elimination of the electric-vehicle availability standard and the clean-fuel regulations. Removal of these would also slow the adoption of zero-emission personal vehicles, except in B.C. and Quebec, which have their own provincial programs.

The elimination of the clean-fuel regulations would slow the adoption of biodiesel, hydrogen and other low-emission options in trucking, rail, shipping and air transportation.

By contrast, electricity emissions would not be significantly different under the existing Liberal government policies or the Conservative promises because the current version of the clean-electricity regulations has minimal effect during the 2025-35 period.

When governments first attempted GHG policies in the 1990s, they avoided carbon pricing and regulatory policies in the hope that encouraging voluntary actions, combined with incentives for technology innovation and early adoption, would be enough to reduce GHG emissions.

Considerable evidence has refuted this assumption. Yet the federal Conservatives under Poilievre still suggest that removing carbon pricing and key regulations will not lead to rising GHG emissions, even as populations and economies grow. The evidence suggests otherwise.

The authors thank Brad Griffin and Mark Jaccard for reviewer comments but the authors are solely responsible for all assumptions and analysis. Details on assumptions, data inputs, model methodology and modelling results are available on request.

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By Ross Linden-Fraser

Industrial carbon pricing is Canada’s single-most important climate policy. Its importance rests not only on its emissions-reducing potential—greater than that of any other policy—but also because of the way that industrial carbon pricing helps attract investment for clean industrial projects.

Industrial carbon pricing is not just a stick, it’s a carrot

It’s well established that industrial carbon pricing functions as a stick by pricing industrial pollution, but it also works as a carrot. That’s because industrial carbon pricing—also known as large-emitter trading systems—creates credit markets where facilities can earn returns from their emissions reductions. Facilities that are highly emissions-intensive buy credits on these markets to cover their excess emissions, while facilities that reduce their emissions can generate credits for their high performance that they can sell for cash. In this way, large-emitter trading systems can use the prospect of credits to attract investment into Canada.

These credits are an important way for facilities to recoup the high costs of emissions reducing projects, especially if the projects wouldn’t earn much revenue on their own. For example, carbon capture projects are capital-intensive to construct and resource-intensive to operate, but their product is a gas that has little commercial value—except if there is a price on carbon. By making emissions reductions eligible for credits, large-emitter trading systems provide CCUS projects with revenue streams that make them viable.

This approach also diminishes the need for subsidies. Other climate policies can’t offer the same cost-effective returns for emissions reductions. The federal investment tax credit for carbon capture, for example, would cover up to half of the capital costs of a project, but wouldn’t provide support for the operating costs, which are high. Credits earned in large-emitter trading markets would help projects to help cover these costs, all without putting a burden on the taxpayer.

Companies are investing billions on the assumption of a carbon price

There are already billions of dollars of low-carbon investments across Canada that are banking on the existence of a carbon price. According to the Climate Institute’s research, this includes more than 70 projects in industrial and natural resource sectors with a combined value of more than $57 billion. These emissions-reducing projects would generate performance credits that could be sold in large-emitter trading markets.

These investments include carbon capture installations for oil and gas and heavy industry, decarbonization projects at steel plants and pulp mills, and renewable energy projects in Alberta (the one province where they can earn saleable performance credits and offsets).

Existing facilities stand to gain from large-emitter trading systems, too. Firms that have already completed emissions-reducing projects, such as the Quest carbon capture facility, are earning credits from large-emitter systems that help to cover the investments they’ve already made.

There are big risks to cancelling industrial carbon pricing

As 440 Megatonnes has shown previously, there are billions of dollars in assets that would be at risk if industrial carbon pricing systems were removed. The greatest direct risk is to the credits that companies already hold—amounting to $5 billion in Alberta alone—but investors have made many other decisions with the assumption of an industrial price on carbon, and they might change their minds in the absence of those policies.

One thing is clear: investors have put many billions of dollars on the table to reduce Canada’s emissions, and existing policies have helped make those investments happen. Industrial carbon pricing will help attract the capital to build a cleaner, more competitive Canadian economy—as long as it stays in place.

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By Mitchell Beer

The Parliamentary Budget Office (PBO) is running into a wall of criticism for an analysis of the federal oil and gas emissions cap that attaches a high dollar cost to the regulation, even though it allows an 11 per cent production increase through 2032.

The report, released last Wednesday, emphasized the relatively small reduction in output the new rule would have required compared to estimates by the Canada Energy Regulator (CER), on the assumption that fossil producers would sooner scale back operations than adopt the emission reductions they’ve been promising for years.

The PBO analysis showed oil sands and natural gas production “well above current levels” in 2030-2032, the first compliance period under the cap, bringing output “close to historical highs,” CBC reports. “The cap would allow the oil sands to add about 500,000 barrels a day, which would increase production by 15 per cent above 2022 levels,” the national broadcaster writes. “Natural gas producers can also add trillions of cubic feet, representing a 12 per cent increase.”

But the report still framed that as a reduction compared to the oil and gas production that might have been. The upper bound of the cap allows a maximum 160 million tonnes per year of oil and gas emissions over the three-year compliance period, the PBO wrote, and without the cap, the industry would exceed that total by an average 7.1 megatonnes per year. To comply with the legal limit, “we estimate that production in these subsectors will need to be reduced by 4.9 per cent.”

The PBO translated those results into a 0.39 per cent reduction in GDP growth, or C$20.5 billion, with the loss of 54,400 full-time jobs in 2032.

Conservative leader Pierre Poilievre seized on the report to declare the emissions cap “reckless”, while Alberta Premier Danielle Smith called the results “scathing”.

But “the oil and gas sector is responsible for the largest share of Canada’s emissions,” and “unlike other sectors, its emissions have not been on a downward trajectory,” CBC writes. “According to Canada’s latest emissions report, the oil and gas sector in 2022 was responsible for 31 per cent of Canada’s emissions.”

Moreover, the PBO report “does not factor in the cost of climate change and its impact on the GDP,” the news story adds. “It also does not consider the jobs that could result from decarbonizing the oil and gas sector and other sectors.”

Alisson Lévesque, director of communications to then-environment and climate minister Steven Guilbeault, said the report presented an “inaccurate and misleading picture” of the draft emissions cap regulations.

“The pollution cap drives oil and gas CEOs to reinvest their profits back into Canada instead of overseas, all while allowing for increased production,” she said in a statement. “It does so by making companies invest in made-in-Canada innovation, including carbon management, methane reductions, and other initiatives that will create thousands of good jobs, cut pollution, and ensure Canadian industries are competitive.”

The PBO analysis was met with a wall of outside criticism, all emphasizing that the numbers don’t show any reduction in oil and gas production—just a slower increase.

“For years, the oil and gas industry—and the oil sands in particular—has told Canadians it is committed to net-zero emissions by 2050 and slashing emissions by 2030,” Janette McKenzie, director of the Pembina Institute’s oil and gas program, said in a prepared statement. “Governments have worked with the sector to make this happen, and as we speak there are billions of dollars on the table, in the form of government incentives and investment tax credits, for companies that go ahead and invest in projects that would reduce their emissions.”

But the PBO assumed fossil companies would “not take advantage of these incentives, and does not keep its promises,” McKenzie added. “Instead, it assumes that companies choose to not produce as much oil and gas instead of investing in technology that would cut emissions in the future.”

“We all make mistakes in math, but sometimes the mistakes are big. And the PBO is good at making big mistakes,” Dave Sawyer, principal economist at the Canadian Climate Institute, wrote on LinkedIn. In this case, at a profit of $40 per barrel, the industry stands to gain $796 per tonne of emissions reduced, against an estimated cost of $130 per tonne for the carbon capture and storage systems they’ve been touting for years. (Even though the carbon capture industry admitted in 2023 that its technologies won’t be ready for prime time by 2035.)

“So, according to the PBO, the incredibly dim money managers in Calgary’s office towers would rather cut production and lose $670 per tonne rather than invest in less expensive technology that is already more or less viable,” Sawyer added. “We can quibble about the numbers all day, but the basics of sound policy analysis seem to be completely lost on the PBO. Once again.”

The PBO acknowledged that, just like its past assessments of carbon pricing and federal Clean Fuel Regulations, last week’s report failed to factor in the economic benefits of reducing Canada’s greenhouse gas emissions. But veteran clean energy analyst Dan Woynillowicz noted on LinkedIn that the Regulatory Impact Analysis Statement for the emissions cap had covered that point, calculating $428 million in benefits between 2025 and 2023.

“Even this doesn’t consider the possible use of offsets, which would be expected to reduce compliance costs, nor the benefits from reduced air pollution,” Woynillowicz wrote. “Nor does it consider the ‘stimulation of new low-carbon industries, such as hydrogen, or for the longer-term competitiveness benefits of a decarbonized Canadian oil and gas sector in a world that complies with existing commitments under the Paris Agreement’.”

Which means that “even the government’s cost-benefit analysis falls short of capturing the full extent of potential benefits, making the $428 million of benefits a lowball estimate,” Woynillowicz concluded. “Regrettable as it is, if you’re still relying on (and widely disseminating) PBO analysis of federal climate policy, it’s a pretty big tell that you simply dislike the federal government having climate policy.”

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