Calgary, Alberta, December 7, 2023 – Energy and the environment go hand-in-hand, and addressing climate change has been – and will continue to be – an economic opportunity that can support Canada’s long-term prosperity. However, the emissions cap announced by the federal government today, replete with unrealistic timeframes and an additional regulatory structure creates greater uncertainty that will strand investment, not attract it. This was an opportunity for the federal government to set a new industrial strategy for Canada, underpinned by the support for decarbonization, which is important to all Canadians. Instead, the emissions cap singles out the energy sector, which is a significant contributor to Canada’s economy, compromising our economic future.
“Climate change is the challenge of our time, however a cap on emissions does not achieve the outcomes the federal government is looking for,” says Deborah Yedlin, President and CEO of the Calgary Chamber of Commerce. “The emissions cap, as currently structured, will create more uncertainty and stifle investments aimed at decarbonization in a sector that has already shown significant decreases in emissions intensity, and risks moving investments to other jurisdictions – ultimately leaving Canada further behind.”
The Calgary Chamber has several key concerns with the framework on emissions tabled today:
- The emissions cap strands investment. Decarbonization requires long-cycle capital investments, which require regulatory certainty for projects to be developed. Confidence within capital markets is required to ensure a low cost of capital, which will be even harder to obtain given the uncertainty associated with both the Clean Electricity Regulations and Methane Regulations. Stranding investment may also impede opportunities for Indigenous communities seeking to be active participants in decarbonization.
- The proposed timeline of 2030 is unrealistic. It will take significant time for government to develop and implement regulations, which, in addition to a lengthy project approval process, will provide industry a very short window to develop and deploy additional decarbonization technologies.
- Increased regulation burdens industry with additional red tape, preventing companies from deploying capital towards emissions reducing technology. Further, this regulation does not add additional certainty or incentive to reduce emissions, given the existence of an economy-wide carbon price. By once again moving the goal posts as the cap is recalibrated, the uncertainty created by changing regulation will pose further challenges.
- The emissions cap misses the opportunity to align industrial policy in Canada, which represents a generational economic opportunity. As currently presented, the emissions cap will not provide incentives for investment, opportunities for economic growth, or the further development of a unified industrial policy akin to the Inflation Reduction Act in the United States.
- The cap harms Canada’s key economic driver. By including transfers of energy, electricity, hydrogen and CO2 needed for the production of oil and gas, the proposed cap directly harms the oil and gas sector’s ability to contribute to the economy by investing in decarbonization. Given the sector is a significant contributor to Canada’s GDP, the government is disproportionately targeting companies in Alberta and threatening the future of the provincial economy.
We encourage government to finalize other key measures such as the investment tax credits, advance carbon contracts for difference to provide carbon price certainty. Further, we urge the federal government to meaningfully work with industry in the coming months as the framework is developed, with the goal of minimizing unintended consequences, ensuring emissions reductions are achieved and economic stability is not compromised.
ABOUT THE CALGARY CHAMBER OF COMMERCE
The Calgary Chamber of Commerce exists to help businesses reach their potential. As the convenor and catalyst for a vibrant, inclusive and prosperous business community, the Chamber works to build strength and resilience among its members and position Calgary as a magnet for talent, diversification and opportunity. As an independent, non-profit, non-partisan organization founded in 1891, we build on our history to serve and advocate for businesses of all sizes, in all sectors across the city.
Media opportunities
For media inquiries, please contact Shannon Hazlett, Senior Public Relations Advisor, at media@calgarychamber.com.
