The Trudeau government is implementing a cap-and-trade system for greenhouse gas (GHG) emissions for the oil and gas sectors that will force a reduction of between 35% and 38% compared to the high levels of 2019 from 2030.
Given the 171 megatons of CO2 rejected in 2019, Ottawa wants to move to 106 or 112 megatonnes with an additional 25 megatonnes set aside for “compliance flexibility.”
The cap was one of the promises made by the Liberals at COP26 in Glasgow and will serve as an important milestone for Canada in its quest for carbon neutrality by 2050.
The oil and gas sectors, one of the richest in Canada, are also among its most polluting. The ministers invited to present the new framework on Thursday were careful to emphasize that the industry should not fear the announcement.
“The framework provides for a certain flexibility, but what matters is that the level of pollution decreases,” said Steven Guilbeault, Minister of Environment and Climate Change, by videoconference from Dubai.
“This cap aims to reduce emissions. This is not a cap on production,” said Randy Boissonnault, Minister of Employment but, above all, MP for Edmonton Center, in Alberta.
The framework also offers companies “the option of remitting national offset credits or contributing to a financing program for decarbonization measures to cover a limited portion of their GHG emissions.”
PERCENTAGE OF TOTAL GREENHOUSE GAS EMISSIONS BY ECONOMIC SECTOR IN THE COUNTRY*
- Oil and gas 28%
- Transportation 22%
- Buildings 13%
- Heavy industry 11%
- Agriculture 10%
- Electricity 8%
- Waste and others 7%
* Data for 2021
Source: Auditor General of Canada
- Listen to the interview with Gabriel Giguère, public policy analyst at the MEI via QUB radio:
What they said
“At a time when we are experiencing a serious affordability crisis, the federal government risks restricting the energy that Canadians depend on, as well as the jobs and revenue that the energy sector contributes to Canada.”
–The Canadian Association of Petroleum Producers (CAPP)
“This is not the ambitious emissions cap we need to get us on the path to phasing out fossil fuels, completely, quickly and equitably.”
–Patrick Bonin, Greenpeace Canada
“Justin Trudeau announced an energy cap that is another attack on Canadian workers and Canada’s world-class energy industry.”
–Pierre Poilievre, leader of the Conservative Party of Canada
“Canada continues to tell oil companies: ‘If you lower your greenhouse gas emissions, you can continue to increase your production.’ And the whole issue is there for the oil companies. We want at all costs to continue to increase our production. And that is immediately unacceptable.”
–Yves-François Blanchet, leader of the Bloc Québécois