The third report released this year found that the federal oil and gas emissions cap will result in huge production losses and billions in lost GDP for Canada.
The Deloitte Canada report, commissioned by the Alberta government, estimates that the emissions cap will reduce oil production by more than 626,000 barrels per day, resulting in $282 billion in lost GDP for Canadians over a decade.
“Three internationally respected firms have now shown that the federal emissions cap will devastate Alberta’s economy and hurt all of Canada,” said Alberta’s Environment Minister Rebecca Schulz in a press release.
“There can no longer be any debate – the federal cap will lead to production cuts, lost jobs, reduced income, weakened investment, and less funding for essential services – devastating families and businesses from coast to coast. Let’s scrap the cap and reduce emissions without hurting Canadians.”
While the Alberta government commissioned the report, it also explored the effect of the cap on other provinces. Researchers found that no province would be hit as hard as Alberta.
Between 2030 and 2040, Deloitte Canada estimates the cap would result in real GDP in Alberta being $191 billion lower, with real GDP in the rest of Canada falling an additional $91 billion. The report estimates that employment in Alberta would fall by 2% or 55,000 jobs. In comparison, the rest of Canada’s employment would fall by 0.5%, or 35,000 jobs over ten years.
By 2040, Alberta’s GDP would fall by 4.5% and the rest of Canada by an additional 0.4%. On top of that, government tax revenues, which fund services and programs for Canadians, would be reduced by 5.8% in Alberta and 1.3% in Canada by 2040.
Due to lower employment opportunities, Deloitte Canada estimates that 2,400 people would move from Alberta to other provinces yearly, resulting in 25,880 leaving the province between 2030 and 2040.
The Alberta government said the cap would affect more than just the oil and gas sector. Negative impacts on the supply chain would trickle into the mining, refining products, utilities, agriculture and forestry, and construction and services sectors.
“The report shows that the cap will harm GDP, cost jobs, and weaken investment. There are ways to reduce emissions without harming our collective well-being, and it’s time to give up on this failed idea,” said Alberta’s Minister of Finance, Nate Horner.
Deloitte Canada’s report follows an even more harrowing report from the Conference Board of Canada, showing the cap would reduce Canada’s GDP by up to $1 trillion between 2030 and 2040 and cause up to 151,000 jobs to be lost by 2030.
The report from the Conference Board of Canada resulted in the Alberta government submitting a 24-page response to the federal government’s draft Regulatory Framework to Cap Oil and Gas Sector Greenhouse Gas Emissions.
“[The cap] clearly violates Section 92A of the Constitution Act, 1867,” said the Alberta government in its lengthy response.
The response seemingly fell on deaf ears.
After The Conference Board of Canada’s report was released, S&P Global Commodity Insights released a report of its own. The report explored various possibilities, with the worst-case scenario resulting in two million barrels of oil being lost daily by 2035 due to the emissions cap.
Alternatively, S&P explored a scenario where the federal government supported the oil & gas industry, which would result in an additional $1.3 trillion in GDP contributions and support 383,000 jobs annually by 2035.
Alberta Premier Danielle Smith previously invoked the Sovereignty Within a United Canada Act to defend the province from the Liberals’ program designed to mandate a net-zero electricity grid by 2035, arguing that it was unconstitutional.
“Alberta’s government continues to call for the federal government to abandon the proposed oil and gas emissions cap and work with all provinces and territories to develop pathways to achieve emissions reductions while supporting economic growth,” concluded Alberta’s press release.