The Alberta government is launching a $7-million advertising campaign in Alberta, British Columbia, Ontario, New Brunswick and Nova Scotia in what it says is an effort to throw cold water on the federal government’s plan to implement an emissions cap on the oil and gas sector.
The campaign, which the province has titled “Scrap the Cap,” will involve television, online video, print and social media ads, Alberta Premier Danielle Smith told reporters on Tuesday. It closely mirrors the design of a previous $8-million campaign the province rolled out in October 2023, opposing federal clean electricity rules.
“We’re telling the federal government to forget this reckless and extreme idea and get behind Alberta’s leadership by investing in real solutions that cut emissions and do not cut Canada’s prosperity,” Smith said.
In December 2023, the federal government announced plans to implement an emissions cap on the oil and gas sector, which is the biggest source of greenhouse gases in the country. Scientists say climate change is caused by an increase in greenhouse gases in the Earth’s atmosphere.
The proposed regulatory framework, as initially outlined in December, would require industry to cut greenhouse gas emissions by 35 to 38 per cent from 2019 levels by 2030, or to purchase offset credits or contribute to a decarbonization fund, which would lower that cut to 20 to 23 per cent of 2019 levels.
In the months that have passed since the regulatory framework was introduced, oil-producing provinces Alberta and Saskatchewan have been vocal in their displeasure with the plan. The Alberta government argues that emissions should be reduced with incentives and technologies, and that Ottawa’s plan infringes on the province’s exclusive jurisdiction over its resources and would stifle the economy.
The federal government and environmental groups, on the other hand, have suggested the cap is a critical part of meeting Canada’s climate goals.
Groups like the clean energy think-tank Pembina Institute argue that despite recent record-breaking profits, there’s “very little evidence” that companies have allocated sufficient capital to projects that would reduce emissions, making an emissions cap a necessary backstop to industry promises.
Regulations intended to be finalized in 2025
Publication of the final regulations is targeted for 2025, with the phasing in of the regulations pencilled in between 2026 and 2030. Canada law dictates the next federal election must happen by October 2025, but parties could push for it to happen sooner.
Asked by a reporter on Tuesday why the province would kick off this campaign now, given the possibility of a change in government at the federal level, Smith said the Liberals could “pass all kinds of policy” should they not see a pathway to re-election.
“Knowing that it would be complicated and take some time to undo it, and send a chill in the investment community. COP29 in Baku is taking place within the next month, and that’s when we have to be the most worried that the federal government is going to be preening on the international stage,” Smith said.
COP29 is the United Nations’ climate change summit in Baku, Azerbaijan, the 29th Conference of the Parties, running Nov. 11-22.
In an interview with CBC News on Tuesday, federal Minister of Energy and Natural Resources Jonathan Wilkinson said the draft regulations should be released in the next few weeks.
When asked about Smith’s mention of COP29 as a possible venue for an announcement, Wilkinson said he didn’t want to get in the way of priorities for Environment Minister Steven Guilbeault, but said such a domestic announcement “almost certainly will be will be made in Canada, not somewhere around the world.”
Wilkinson added he thought people should wait and see what the emissions cap looked like prior to making any conclusions.
“At the end of the day, the numbers will come. And we’ve been very thoughtful. I would say that, our expectation, just as the premier’s expectation, is until oil peaks globally, and it has not done so, that there will continue to be increases in production,” Wilkinson said.
“But we need to be thoughtful about ensuring that our oil and gas resources decarbonize, so that they can be competitive in a world that is going to value low-carbon fuels.”
The cost of the cap
The province’s campaign also says the federal regulations expected later this year would make groceries, gas and all of life’s necessities even more expensive.
University of Calgary economist Trevor Tombe said he believes the emissions cap is bad policy, but the argument that it would drive up the price of gas — and therefore groceries — is misleading.
Tombe said gas prices are largely determined by taxes, retail markups and margins, and global oil prices.
“There hasn’t been any credible analysis suggesting that Canada’s emissions cap on oil and gas will affect world oil prices,” said Tombe.
Tombe said it’s a fair argument to make that the cap would result in fewer jobs and lower wages in the sector, and he believes the federal policy takes a flawed approach.
Tombe said the most efficient way to lower emissions is by having an identical burden on all sectors, in all regions, so every tonne of emissions faces the same consequence.
At the same time, he said, the emissions cap won’t necessarily force lower production.
“Even if costs rise and profits fall, the profit per barrel could still very well be positive, even with higher costs,” said Tombe.
Meanwhile, Chris Severson-Baker, executive director of the Pembina Institute, said he’s yet to see any proposals from the provincial government to sufficiently regulate emissions.
“If we don’t see the oilsands companies following through with that plan, not only are we going to see continued emissions rising from that sector … but we’re also going to miss out on a significant amount of investment in this province,” he said.
In September, the Canadian Climate Institute found that Canada’s greenhouse gas emissions dropped slightly last year, despite strong economic and population growth.
However, oil and gas emissions continued to rise, up one per cent, or 2.2 megatonnes, from 2022. They now make up 31 per cent of Canada’s national total, according to the report.