According to a new Parliamentary Budget Office (PBO) report, regulations proposed by the Liberal government could reduce greenhouse gas emissions from the oil and gas sector by 54,400 jobs and 0.39% by 2032.
The regulations will establish a national cap-and-trade system for the sector, setting the ultimate goal of reducing the country’s greenhouse gas emissions to Net-Zero by 27% below the reported emission levels in 2026.
To achieve this, the PBO said oil and gas production would need to be reduced by 4.9% from 2030 to 2032. The report said this would lead to a $20.5 billion reduction in nominal GDP, reducing the economy’s overall employment of 40,300 jobs and 54,400 full-time employment.
The federal government says CAP and trade policies will help combat climate change while helping to lower pollution levels and combat climate change, while also promoting the adoption of technologies such as carbon capture, utilization and storage. When it announced the policy in December 2023, Environment Minister Stephen Gilby said the government was “trying to ensure Canada’s well-earned reputation for energy innovation.
Alberta Prime Minister Daniel Smith responded to the report by calling it “scathing” and saying that he could not argue that Ottawa cannot argue that he would support the energy sector in a trade war with the United States.
“The federal government’s proposed emission cap is unconstitutional, bad for the economy and bad for Canadians,” she said. “We urge the next elected prime minister to abandon this extreme, ideological hat.”
The Alberta government said it would legally challenge the regulations, saying it was unconstitutional and would undermine the state’s oil and gas economy.
The Conservatives also responded to the PBO report by highlighting the contribution of the energy sector to Canada’s economy. It employed around 1 million people and provided $45 billion in revenue to the Canadian government in 2022.
In an interview with CBC News earlier, Carney said the oil and gas sector has generated more than a quarter of Canada’s emissions, and the country “will not be able to achieve its ultimate goal to bring zero emissions to zero.”
In his speech after gaining liberal leadership, Carney vowed to use both “clean and traditional energy” and replace the federal carbon tax with a new policy that rewards Canadians with environmentally friendly choices and rewards large industrial polluters. He also criticised the signature “tax” policy of conservative leader Pierre Poilierve, saying the leaders are not focusing on Canadian carbon rebate checks or that companies are not focusing on “more competitive.”
On March 13, PBO published a de facto update explaining that its analysis does not underestimate the emission reductions that can be achieved by expanding carbon capture and storage. The report says that advances in carbon capture and storage and other related technologies will reduce emissions by 16.7 megatonnes by 2030.
The PBO said the inconsistency came from reports excluding emission reductions caused by the Pathways Alliance CCS Foundational Project, which has not yet been approved.
The update comes after Energy Minister Jonathan Wilkinson criticized the report and stated that the PBO “wasted time and taxpayer dollars by analyzing a structured scenario in which the Canadian government has not proposed remotely.”
“The only way to achieve reductions in the oil and gas industry emissions is to reduce production, and PBOs are once again misleading the public and ignoring the reality,” he added.
