Despite the Liberals making emission reduction a cornerstone of their climate agenda, Canada is projected to fall short of its carbon targets while also harming the Canadian economy.
A new report by the Fraser Institute has concluded that the Trudeau government’s plan to reduce emissions by 40% below 2005 levels by 2030 will not be met and policies set to achieve that goal will cap economic growth. As a result, wages will fall, and the average Canadian is set to lose thousands of dollars.
According to the report, if Canada were to meet the Liberals’s 2030 emission reduction target and drop emissions below 40% of 2005 greenhouse gas emissions, this would contribute to a drop in global average temperatures by 0.007°C by 2100 compared to if Canada took no action.
However, according to the report, Canada is only projected to reduce its emissions by 26.5% from 2019 emission levels. This analysis factors in the impact of the carbon tax, the clean fuel regulations, and the vast slate of Trudeau government regulations including the electric vehicle mandate, the oil and gas sector emission regulations, the fertilizer use regulations, and more.
These regulations do not have a neutral effect on the economy argued Fraser Institute economists, as economic growth, wage growth, and employment levels are all impacted.
By 2030, the average cost of the Trudeau government’s climate policies will amount to $6,700 annually per Canadian worker in 2019 dollars, or $7,933.82 in 2024. While the carbon tax is found to cost workers $1,302 annually, the clean energy regulations and other climate regulations are found to be significantly more harmful.
Without the litany of Trudeau government climate policies, Canada’s GDP is projected to grow by 29.3% from 2019 to 2030 but is only projected to grow by 21.3%, a 6.2% loss in GDP over the decade.
This would have the effect of reducing real wage growth for Canadian workers by 5.5% compared to a scenario where the Trudeau government regulations do not exist. This means that all real wage growth would effectively be counteracted, and would drop earnings per worker 1.6% below 2022 levels.
Not only would Canadian wages take a hit, but the emission reduction policies would also result in a reduction of 164,000 jobs as of 2030, with the carbon tax alone contributing to 57,000 of these job losses.
The Trudeau government has attempted to reason that their climate agenda would provide economic benefits to Canadian workers while mitigating the costs that severe climate events pose on Canadians.
However, the report disputes these claims, showing that the government has provided misleading information when it comes to severe weather events while failing to provide a cost-benefit analysis to support its claims.
Conservative Leader Pierre Poilievre has promised to scrap the carbon tax, though he has not made it clear whether or not he supports repealing the Trudeau government’s various climate regulations.