(Canada’s Prime Minister Justin Trudeau and Environment Minister Steven Guilbeault)
Are the Liberals Our Only Hope for Combating Climate Change?
This article takes a look at various policies conducted by the federal government. Most if not all of these environmental policies have been implemented as a result of campaign promises stretching across the 2015, 2019, and 2021 elections.
And although there is much doubt about the Liberal’s commitment to combatting climate change, there is no doubt that this government is the best shot Canada has had in recent history to move the pendulum on climate and environmental policy. Canada’s opposition party, the Conservatives, doesn’t seem interested in playing by some of the policies implemented by the Liberals. Namely, the opposition Conservatives plan to scrap the national carbon pricing scheme, the Impact Assessment Act, and intend to alter Canada’s commitment to reducing its emissions by 40% by 2030.
Moreover, later this year, the Liberals are looking to cap emissions within the oil and gas sector by the end of 2023, a sector that accounts for nearly 30% of the country’s emissions. The Conservatives also minted to scrap such emission caps if they were to come into power.
Environmentalists and economists suggest that the measures are in fact the bare minimum for addressing the climate crisis. If the Conservatives aren’t willing to play ball with emission caps, carbon pricing, and responsible environmental assessment procedures, then their commitment to the climate crisis is a significant blunder in their party platform. Although it is unlikely that the world will keep global warming under 1.5 C by 2030, a Conservative approach to climate policy will surely blow past any hope of keeping the Earth’s temperature under control by either 2030 or 2050.
As a result, the Liberals remain the only politically viable party that commits to implementing environmental protections and reducing emissions. Some economists tout the Liberal plan to be the least costly, but most effective plan out of all the major parties.
Eco-organizations and the emerging clean tech manufacturing sector understand that the Liberals are the best shot they have to promote environmental policy. For Canadian voters, there is a general understanding that any national movement on reducing emissions will likely only come from the Liberals. With the latest polls showcasing that the environment is among Canadians' top 5 national issues, the Liberals are the best and only hope voters have for climate justice.
To add to the Liberal commitment, grassroots supporters of the Liberals are indeed environmentalists, and trying to avoid the climate change question will only serve to backfire on the Liberal's next election if they were to butcher it.
Fortunately, the Liberals are introducing meaningful steps to fulfill and expand on several commitments on environmental protections and climate change policy. Let’s explore some of those policies.
Environmental Policy
In Budget 2023, the federal government labelled a tiered structure on how they plan to transition the economy to net zero. The government references 4 primary strategies outlined in the picture below.
This article will be focused on the ‘Pollution Pricing and Regulatory Framework’ strategies. For an in-depth discussion on the ‘Investment Tax Credits and Strategic Finances’ strategies, click here.
When considering the entirety of the government’s strategies, the government is looking to reduce the country’s emissions by at least 50% by 2030 compared to 2005 levels. As for the tangibility of these goals, a recent analysis conducted by the Climate Institute indicates that the government’s reduction targets when considering all implemented and promised policies is just short of 24 Mega Tonnes of GHG by 2030.
Carbon Pricing and Regulatory Framework
The initiative that kickstarted it all was the federal carbon pricing scheme. Introduced in 2017, the Liberals argued that the only viable way to reduce Canada’s emissions for the long term and to incentivize large emitters to reduce the carbon intensity of production. The carbon pricing scheme is a patchwork of charges on fuel-utilizing mediums such as gas stations and home heating appliances. The current fuel charge stands at $65 per tonne of emissions, rising to $170 per tonne of emissions in 2030. The federal government hopes to force industries to lower their emissions by making it expensive to pollute in the first place. As for the efficacy of the policy to reduce emissions, studies from the province of British Columbia revealed that its sole provincial carbon tax was able to reduce emissions by about 5% to 15% over the course. The federal government is waiting for similar emission reductions by 2027.
On top of the pricing scheme, the Liberals have introduced a ‘Contracts for Difference’ policy which will guarantee that low-emission projects receive the insurance they need to move forward. Essentially, the contracts for difference will force governments to pay out to businesses that invest in reducing their emissions in the advent that the future price of carbon does not increase (based on current levels) due to a government change. These contracts would give businesses the confidence they need to reduce emissions without worrying about the financial losses such projects would have if the carbon price were reduced or removed.
The third element of the regulatory framework is the Clean Fuels Regulations. These regulations require producers and importers of fossil fuel liquids (such as gasoline or diesel) to reduce the carbon intensity of the liquids they produce and sell in Canada over time. The government projects that such regulations would “lead to a decrease of approximately 15% (below 2016 levels) in the carbon intensity of gasoline and diesel used in Canada by 2030.” This is approximately equal to 26 million MT of emission reductions by 2030.
The government is supporting this target through two primary measures. Firstly, the government uses carbon intensity, a measure of the total GHG emissions associated with the extraction, refining, distribution, and use of fuel. The reduction measurement is defined as “grams of carbon dioxide equivalent per megajoule of energy (gCO2e/MJ).” The government has put forward the following regulations:
“In 2023, the carbon intensity reduction requirement will start at 3.5 gCO2e/MJ. It will increase by 1.5 gCO2e/MJ each year, reaching 14 gCO2e/MJ in 2030.”
Secondly, the Clean Fuels Regulations also introduces a credit system in which regulated parties must create or buy credits to comply with the emissions reduction targets. Such parties may sell these credits to others or bank them to use them in later years.
Capping the Oil and Gas Sector’s Emissions
Canada already boasts an impressive number of policies that either reduce emissions and/or force emitters to produce more cleanly. But there’s more come to come. Canada’s Minister of Environment and Climate Change Steven Guilbeault has made it clear that the government intends to introduce a cap on emissions in the oil and gas sector. The Minister argues that while overall emissions in Canada are up over a period of 30 years, the oil and gas sector is especially pollutant. Emissions from the oil and gas sector are up 83% higher than 30 years compared to 23% overall. The oil and gas sector also accounts for approximately 20% of Canada’s total carbon emissions.
The Federal Impact Assessment Act
The fifth pillar of the federal government regulatory response is the Impact Assessment Act. This piece of legislation plays a pivotal role in using the federal government’s jurisdiction to keep governments and industry “accountable for thoroughly evaluating the environmental and community impacts of projects as well as the effects of projects on Indigenous peoples and their rights.” The legislation takes advantage of the federal government's unique jurisdictional powers to determine whether or not a project exceeds a “significant adverse effects” threshold. If such a project exceeds the adverse threshold (according to the Federal Minister of Environment), then the project may be prohibited at an early stage. One such project that may be prohibited is Ontario’s proposed highway 413, which is set to permanently damage sensitive wetlands and habitats for questionable benefits for car commuters.
The Impact Assessment Act has been a cornerstone of the federal government’s in thoroughly evaluating controversial government or industry projects that receive public backlash due to environmental or social concerns. And with the Impact Assessment always looming over the heads of such projects, governments of all levels and major industries feel compelled to reduce their environmental and social impact lest the project becomes cancelled by the federal government.
Protecting Canada’s Lands and Oceans
The government has also committed and fulfilled to protecting our oceans and lands that are vulnerable to the effects of climate change and pollution. As of 2020, the government had fulfilled its promise to protect 10% of Canada’s oceans and lands by 2020 and is further looking to expand protected terrestrial areas.
The government promises to protect 25% of oceans/lands by 2025 and further promises to protect 30% by 2030. According to the Department of Fisheries and Oceans, the government is on track to meet these expanded pledges.
For many environmentalists, it’s just as important to be considerate about our ecosystems and habitats as it is to focus on the numbers and science of reducing emissions and fossil fuel use. They both equally play a role in fighting the climate crisis.
The government has also introduced a number of funds that provide local organizations, businesses, and authorities to restore and/or protect their terrestrial areas. Some of these funds are listed below:
- In 2022, the government introduced a $75 million Aquatic Ecosystem Restoration Fund to restore and protect coastal as well as marine areas. This fund is part of a broader $1.5 billion Oceans Protection Plan launched in 2017 to protect, restore, and conserve Canada’s oceans and waterways.
- The Nature Smart Climate Solutions Fund “proposes $631 million from 2021-22 to 2031-32 to support projects that conserve, restore and enhance wetlands, peatlands, and grasslands to capture and store carbon.”
- As an expansion to the Nature Smart Climate Solutions Fund, Budget 2022 “proposed to provide $780 million over five years, starting in 2022-23, to Environment and Climate Change Canada to expand the fund.”
- Allocating $200 million for a Natural Infrastructure Fund to fund green spaces. This fund has gone towards funding public parks, recreational areas, and developing protected lands for ecosystems.
In tandem, direct government and local efforts to protect terrestrial lands play a significant role in ensuring the natural beauty of ecosystems is preserved while reducing emissions through nature-based processes.
A Canadian Success Story?
Fortunately, Canadians can expect that their oceans and lands will be sufficiently protected against resource extraction, waste dumping, excessive hunting, and damaging use. Canadians can also expect a significant amount of regulation to tame Canada’s high emission woes. In addition to these policies, the Liberals have implemented a number of other policies to supplement the framework, such policies include an effort to plant 2 billion trees, a ban on certain single-use plastics, and a permanent fund for public transit.
Combined with Budget 2023’s generous tax incentives towards net-zero electricity generation, EV manufacturing, clean fuel production, and clean manufacturing; Canada is introducing a wide depth and breadth of policies that will help the economy transition to net zero. As a testament to the government’s efforts, a recent report from Rystad Energy indicates that Canada has jumped second in the world in green energy incentives. Ahead of countries like Germany, Sweden, the UK, South Korea, and Japan but only behind the United States.
With other major announcements like the Volkswagen battery manufacturing plant for bolstering Canada’s EV market, an investment worth $220 million to build over 2000 EV charging stations, a focus on developing renewable and nuclear energy generation, and transforming our electricity grid to utilize more renewables; Canada is making the right steps to becoming a global leader in transforming its economy to net-zero.
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