7 ways Thomas Mulcair aims to change Canada’s energy landscape

Energy is shaping up to be a 2015 election battleground


(Jeff McIntosh/CP)

If there were any doubt that an NDP government would bring a different approach to energy policy than what we’ve seen under Prime Minister Stephen Harper’s Conservative government, those doubts were laid to rest on Tuesday in a speech Thomas Mulcair gave to the Economic Club of Canada.  The speech included no fewer than seven significant policy positions, not all of them new.  These positions are a combination of Mr. Mulcair’s historic strengths and some red meat for the NDP base.  There’s nowhere near enough detail provided to evaluate any of these policies, so hopefully we’ll see more of that in the weeks and months to come, but kudos to Mr. Mulcair for putting the first bits on the table.

1. Cap-and-trade carbon

The first major policy statement comes in two parts.  Mr. Mulcair states that an NDP government will, “rise to meet our international climate change obligations by creating a cap-and-trade system that puts a clear market price on carbon.” By our international obligations, we have to assume that he’s referring to the Harper government’s Copenhagen commitment to reduce our emissions to levels 17% below where they were in 2005 by the year 2020.  A recent report from Environment Canada showed that, with current federal and provincial policies in place, our emissions are expected to be less than 1% below our 2005 levels by 2020. If we don’t do something, and fast, we’ll miss our target by about 3 times today’s emissions from the oil sands.

If my reading is correct, a policy to meet the Copenhagen targets agreed to by Prime Minister Harper would be a step back for the NDP. In their 2011 election platform, the NDP had committed to re-instate the Climate Change Accountability Act (C-311) which called for emissions reductions to 25% below 1990 levels (35% below 2005 levels) by 2020.  Still, a commitment to a cap-and-trade policy to meet the Copenhagen commitments would represent one of the most stringent GHG policy commitments worldwide. Assuming the policy would cover most emissions in the economy, a cap that tight would almost certainly lead to market prices for emissions above $100/t.  For reference, a GHG cost in that range would impose a cost for the emissions generated from burning gasoline of about 25 cents per litre, and would increase oil sands production costs by $5-10 per barrel depending on the facility.

Let’s be clear – if Canada is to meet its commitments, we need policies which impose these types of costs on industry or on consumers, either through regulations, taxes, or a requirement to possess scarce permits for emissions.  Most economists would advocate for the carbon pricing approach embodied in carbon taxes or cap-and-trade, as proposed by the NDP, because these policies allow the market to work to find the cheapest ways to reduce emissions. Regulatory approaches rely on government bureaucrats to determine where emissions are best allowed to occur and through which technology, and so tend to be less cost-effective (although more stringent regulations may be more politically palatable than high taxes or high-priced cap-and-trade).  The NDP are clearly betting that Canadians do want stringent GHG policy – I guess we’ll see if they’ll vote for it.

This proposal would be major economic policy (I’ve previously compared similar policies to the scale of the GST or NAFTA), so we need more details.  Here are the key questions to which I’d like to see clear answers:

  • What would the cap be (i.e. how many permits would be issued in each year from 2016-2020)?
  • Who would require permits and for what emissions (e.g. would refiners be required to hold permits for emissions from refining and from eventual combustion or just for emissions from their own processes) ?
  • How would permits be issued? Would all be auctioned or would some be allocated to firms? If some would be allocated, on what basis?
  • Would additional permits be made available if prices rose to high? If so, what would the limit price be?

Mr. Mulcair would be best to have these questions clarified well before the 2015 campaign – it will be important for him to have a clear mandate from Canadians if he gets to keep his promise that, “one of my first official acts as Prime Minister will be to attend the international climate conference in Paris in December 2015.”

The second part of the GHG policy proposal is that the NDP promises to “use the revenue generated by that cap-and-trade system to…invest in renewable energy projects in the regions where that revenue is generated.”  The regional line is a clear nod to Western Canada, where the potential for large wealth transfers to occur under the guise of cap-and-trade is a real threat. How would an NDP government invest in renewables? Would they do so through subsidy programs like the now-retired ecoEnergy for Renewable Power program?  That would make a hat-trick, as the policy has already been enacted by the Chretien-Martin Liberals, only to be cancelled and then re-enacted under a different name by the Harper Conservatives.

2. Resolve First Nations land claims

The second policy commitment, if you could call it that, was that “a New Democratic government will make it a priority to resolve land claims and treaty disputes once and for all.” The words could just as easily have been spoken by former Conservative cabinet Minister Jim Prentice who called out the Conservative government for unresolved First Nations land claims and failure to adequately consult on energy development. Whichever party is elected in 2015, there is near-certainty that consultation (and likely conflict) with First Nations over energy development on the east and west coasts will be high on the priorities list.

3. Refine more resources in Canada

The third policy commitment was related to the so-called value-added issue – “New Democrats will work with the provinces to upgrade and refine our raw resources here in Canada. Whether it’s raw logs or raw bitumen.” Here again, we need to know how. There are likely three things an NDP government could do to encourage more refining and upgrading: preferential tax treatment (although given that they talk about removing those subsidies below, that’s hard to imagine), trade restrictions on bitumen (which would certainly run afoul of NAFTA provisions which the NDP has previously promised to re-negotiate), or direct involvement in the refining sector (an experiment which is currently becoming more expensive by the day in Alberta).  Perhaps, in this case, Mr Mulcair would be well-served to look at the model of Norway, which he describes in his speech as having “leveraged its resources to create value-added jobs today.” One thing Norway has certainly not done is encouraged domestic refining. Norway produces about 1.8 million barrels per day of crude oil, but has refining capacity of only 300,000 barrels per day – a little more than enough to serve its domestic consumption. Canada has 1.9 million barrels per day of refining capacity, while producing about 3 million barrels per day of crude.  Granted, we consume more as well – about 2.2 million barrels per day.

4. Clarify foreign investment rules…somehow

Fourth, we see the NDP attack the Conservatives on foreign investment (yes, this is an odd thing to type), saying that “global investors have been left bewildered by the Conservative approach.” No kidding.  The Calgary Herald‘s Deborah Yedlin described the impact of the opaque net benefit test as ” the great sucking sound of capital flying out of Canada’s oilpatch.” The NDP would “enshrine in law a coherent and strategic vision that creates the right climate for foreign investment—including a well-defined ‘net-benefit’ to Canadians.” Of course, this means nothing if we don’t know what the NDP defines as the right climate or how they would define net benefits of foreign investment to Canadians. This, after all, is the NDP leader who described the Nexen-CNOOC deal as having sold out Canadians.  So tell us, Mr. Mulcair: how would you measure benefit and make sure that the headlines read, “Canadians fleece foreign investors,” under an NDP government?

5. Reintroduce tax breaks for energy-efficient home renovations

Fifth, the NDP would bring back the mechanisms in the much-loved but largely ineffective ecoENERGY Home Retrofit Program which financed home energy improvements. The NDP cites the advantage of this program as having “created more than 15,000 jobs while helping Canadians reduce their energy consumption, improve their home’s efficiency and lower their energy bills.” Unfortunately, NRCan’s own analysis found that a significant share (about 25%) of the funded retrofits would have happened without any government funding (see NRTEE PDF here) and that over 25% of households saw no net reduction in energy use as a result of the retrofits. So, how would the NDP improve this program? In their 2010 platform, the NDP had suggested making the program available only for retrofits on low income housing.  That would certainly be an improvement. Let’s hear the rest of the details.

6. Shift tax breaks to renewable energy

Next, another oldie from the New Democrats – a pledge to “redirect a billion dollars a year in fossil fuel subsidies, and re-invest that money in clean energy.”  The billion dollar number is a climb-down from the $2.5 billion per year figure cited by Jack Layton in the last campaign, and is likely sourced from an IISD report which quantified federal tax expenditures in the oil and gas sector. It’s important to remember that removing these deductions would not translate directly into more government revenue unless the deductions themselves are having no impact on spending and investment behaviour. Expenses not claimed through these preferential treatments would also not necessarily become taxable income, but I’ll leave that to the tax experts.

7. Make environmental assessments more independent…sort of

Last, but certainly not least, the quote most quickly conflicted by Mr. Mulcair’s own scrum.  In his speech, Mr. Mulcair said that the NDP would “take arbitrary powers out of the hands of cabinet by establishing a thorough, credible and efficient system of environmental assessments.” However, in the scrum which followed the speech, Bruce Cheadle of the Canadian Press quotes Mr. Mulcair as saying that “what you can do, though, is just simply decide that some things — like the Northern Gateway pipeline would be a good example — are non-starters.” So, on this file, both the Conservatives and the NDP seem to value arbitrary powers in the hands of cabinet: the Conservatives changed the rules so that projects rejected by the National Energy Board could be approved by cabinet and Mr. Mulcair would change the rules so that cabinet could decide never to hear from the National Energy Board in the first place.  Mr. Mulcair says that an NDP government, “would have never sent something like (Keystone XL) to the NEB.” 

So, what are the takeaways? First, Mr. Mulcair and the NDP are clearly serious about redefining energy policy in this country.  Second, on energy policy, there really is no left and right any more – it’s us versus them or, in some cases, our proposal which used to be their proposal vs. their proposal which used to be ours. Third, both party leaders are loathe to move key energy infrastructure decisions outside of cabinet. Finally, there’s a long road to 2015, but with Justin Trudeau’s speech last month in Calgary and this one from Mr. Mulcair, it’s clear energy will be a key issue on that road.  I couldn’t be happier – it’s a discussion we need to have.


7 ways Thomas Mulcair aims to change Canada’s energy landscape

  1. I guarantee you Canadians are not going to vote for a 25 cent increase in a litre of gasoline. NDP is either going to have to delay or slooooowly phase in a Carbon Tax. All Trudeau has to do is not say anything about Cap and Trade and he’ll win most non-Harper votes in the West.

    • I think the idea is to change behaviour, somehow.
      If you can’t look beyond your short term pocketbook, ain’t gonna happen.

      • The real price of oil was $30 in 2001 and is $90 today. That’s the equivalent of a 200% carbon tax. If that ain’t gonna do the trick then another 20% on top — which NO ONE is proposing — isn’t going to do it either.

        The fallacy is believing that people can be easily manipulated according to an economic formula. In order to really reduce reliance on fossil fuels there has to be a lot more on the plate than simple punitive measures.

        Europe, for example, learned its lesson from the oil shocks of the 1970s and invested big in mass transit. North Americans learned nothing.

        To really reduce emissions we need to invest a lot more in mass transit with better coordination between cities that makes it more appealing — as well as subsidized prices. We need better fuel emission standards on cars (something many economists are completely incapable of comprehending.) We need rebates on hybrid cars and luxury taxes on gas guzzlers. This is a complex problem that requires sophisticated solutions.

        • I think a comination is required.
          I also think price will affect behaviour, just think that we, as a country, are too rich, so it’s gonna take one big whack to make it happen. And over a prolonged period of time.

        • heck, we could even get draconian about closing down routes taht are adequately served by public transit to unnecessary drivers.

    • Tom Mulcair is not factoring in significant vote from the oilpatch. Given the way we vote with the first-past-the-post ballot, you don’t have to get everyone to love you, just 1 vote more than the person in 2nd place.

    • It won’t be 25 cents/litre since that presupposes that the NDP want a carbon price of $100 tonne. While Andrew Leach may espouse a bizarre (yet typically Albertan) paranoia that that the dippers would want to impose an onerous $100/tonne carbon price as a way to send Alberta back to the dark ages, the reality is much more nuanced. There’s a variety of middle ground options which would improve GHG performance while managing costs. Just because Alberta has done such an stellar job of getting itself landlocked in bitumen doesn’t mean everyone else is equally as inept at breaking the shackles free.

      • Chris, can you point me to the studies underlying your analysis of the situation? With your more “middle ground” policy, how tight would the quota be, who would it apply to, and what would Canada’s emissions be in 2020? What quantity would have to be made up through international purchases, and how much would you expect that to cost? My $100/tonne has little to do with Alberta – it’s a reasonable estimate based on what would be required in an economy-wide carbon pricing regime to keep emissions at or about the Copenhagen target level within Canada. If you have less stringent requirements on domestic emissions, you’d have a lower price. That part is obvious.

        • You might have been able to head off that sort of attack [ you’re only interested in what AB gets out of this] had you bothered in your post to mention the reason why we might be facing these sort of $ increases per tonne or by the barrel. That’s to say the Harper govt has failed abysmally in getting us anywhere near those Copenhagen commitments.
          From a political pov i’d be worried if i were the ndp. Unless Mulcair fleshes out these proposals he gets to wear this, since he has chosen to put some of his cards on the table and the CPC wont be shy about saying this all relies on a form of socialist wealth transfer outside the country. Something[presumably] that a straight out CT would not be vulnerable to.
          I’m less and less impressed with Mulcair’s political savvy. He knows what he is up against by now.

        • The analysis is supply driven, rather than demand driven. On supply, secondary CER is currently EUR 0.35…..It maxed out at EUR 21 before the European over-supply. Primary OTC market was stable at EUR 6 – 10 during the contracting years of 2006-2010. Since all those reference prices are well below $100/tonne, its pretty clear CERs would have a material dampening effect on price if thrown into the compiance mix.


    • That carbon tax could be applied at the wholesale or refining level and the GST could be reduced by half the value of the carbon tax. The rest of the carbon tax could be used to encourage clean energy and conservation. The net impact of taxpayers would be near zero but the policy objectives would still be achieved.

      • The very idea that a carbon tax would be neutral is ridiculous. Consumers are the only folks who DO pay. If you believe a company is going to simply absorb the costs, and not pass them along to consumers, then you certainly sound like an NDP supporter.
        We shouldn’t be pissing away scarce resources on the same policy ideas that have seen massive frauds in Europe, or on the economic impact the Green Energy Act has had on Ontario.
        Remember, when the Green Energy act came in….the Provincial Libs promised minimal impact……but our power bills are on their way to being doubled since the Liberals were in charge.
        Every time you hear a politician say it won’t cost anything…just remember, they actually mean, it won’t cost THEM anything. They will always come out ahead…..and you have to pay for it.
        NDP energy policy, and soon to be Fed Liberal Policy (under direction of Gerald Butts)…..was crafted by economic illiterates.
        Everything has a cost….and you will be paying for it.

        • A tax policy can easily be revenue neutral simply by reallocating the existing tax burden from one part of the economy to another. A favoured approach (though not the only way) is offsetting carbon tax revenues with income tax cuts.

          • You exactly correct.

        • Firstly, James, the BC Carbon Tax was brought in by the Liberals ( a rather right wing party) not the NDP, so you start off with a foolish comment that I MUST be an NDP if I support a carbon tax. You scoff at my suggestion that it would ever be revenue neutral but that is simply a matter of how you introduce such a tax. If it is applied at the producer level then it is passed on to customers, many of whom are foreigners who import our petro products. So the tax is not on Canadians but Foriegn consumers. I note that the GST could be reduced by half the value thus taking with one hand but giving back with the other. There could be low income tax credits as well. Dedicating half the tax, the portion on oil exported, to green projects would cost taxpayers in Cabada nothing but be a net benifit.
          Before you have a knee jerk reaction as you did, you should think through the possibilities. If you do not think the government will make the tax neutral, that is different than saying it cannot be. That is where voters need to evaluate the candidates and parties they vote for.

    • 25 cents? Would be a lot more. Say we get the 60 cent cement for brains economics, 1 / .60 is $1.67, about 67% inflation on gas, utilities, food….and no raises as employers would spend so much more on commodities and materials there would be no raises.

      And in the worlds economy, all the nations with weak currencies are seeing more unemployment and a lower standard of living, yet the strong Asian currency Yuan is string and unemployment dropping with a growing middle class.

      But a lot of stupid Canadians would vote for him, and why I no longer invest new moneys in Canada and have 47.4% of the portfolio offshore after moving more money out of Canada. No one is going to invest in NDP Canada to lose money and lose value.

      • why not just say it’s a million trillion dollars per SUV fill up, for all that your predictions are based on anything resembling reality?

    • Glo-Bull Warming is the biggest fraud ever perpetrated in human history.

  2. Two sets of comments:

    A. Kudos to Leach for:

    1. Making clear that meeting Copenhagen commitments would be both fantastically expensive and unprecedented in the world (although the “regionalism” component Mulcair promised in conjunction with cap and trade means that he’s basically just proposing to increase the Alberta provincial carbon price from $15 to $100 and keep the associated technology fund concept untouched – Leach would have done well to note that).

    2. Mocking energy-efficient home retrofits – although more mocking is demanded. Such retrofits were only available for the best technology option available. The NDP idea is that low income housing will be eligible for the flash boilers of the world, but not new high efficiency hot water tanks – sort of a fantasy land where luxury homeowners contort themselves to qualify for cash grants. Not exactly saving the planet.

    B. Leach is wrong about several things:

    1. Our Copenhagen commitment is entirely dependent upon the U.S. *legislating* a similar commitment on itself. If the U.S. does not do so Canada has not actually committed to anything and hence can’t break commitments.

    2. “Resolving First Nation Land Claims” is the wrong title and, as presented, may as well be “achieving cold fusion once elected”. And, in many cases, the most significant First Nations / energy friction points occur where “land claims” are settled, but accomodation of infringements to recognized aboriginal rights is not. A better goal would be “consult better” – which is what Prentice was actually saying.

    • Kudos to quack-o-nomics…

    • 2. Mocking energy-efficient home retrofits – although more mocking is demanded. Such retrofits were only available for the best technology option available.
      My sister, in Ontario, had an energy audit completed. Windows, insulation, storm doors, weatherstripping all seemed to qualify to some extent as I recall under this program. None exactly “high tech”.

    • Thanks for reading.
      On A1, it’s not clear at all the Mulcair would be keeping the Alberta system with a higher price. He’s not said anything related to emissions-intensity-based allocations, nor has he stated that all funds collected would remain in the province in which it was collected. He simply said some would be, and he didn’t say how.

      On A2, that’s not true at all. Under the ecoEnergy Retrofit, there were rebates for furnaces, windows, insulation, etc. not only tankless hot water or luxury goods. Further, there were rebates related to performance under the blower door test, so you could benefit from simple retrofits like weatherstripping, spray foam, etc.

      On B1, if US emissions continue on their current projected trajectory, they’ll meet or be within spitting distance of their commitment. We likely won’t get far suggesting that we didn’t meet our commitment because the US didn’t act.

      On B2, Prentice has worked on both issues and written on both since leaving the government.

      • Thanks for responding.
        On A1, correct, there is no intensity scheme in anything Mulcair has said. I wasn’t making granular distinctions between only targeting large emitters versus the overall population, and there’s an implicit assumption that the intensity 15% improvement threshold would continue to ratchet. What I would have liked a comparison of was the technology fund concept applied on a regional basis (which also appeared in the stillborn federal Turning the Corner regulatory framework), but I was pretty unclear. The technology fund mechanism reflects a belief (well-founded or otherwise) that technological change will ultimately produce a solution to climate issues rather than actually reducing current emissions, and justifies low prices like Alberta’s. But the regionalism component hamstrings that premise. That was some of the policy divide between the Liberals of 2005 and the Tories of 2007. Mulcair’s position here is fascinating.

        On A2, you may have a point. I remember starting to participate in
        that program as the proud owner of a leaky house and finding myself very hard pressed to recoup the initial ~$300 consultation fee unless I spent serious dollars. And yes, I bought a new hot water tank that didn’t qualify, after mulling the flash boiler. I apparently should have had another blow test done after installing the weather stripping.

        • Er, intensity *12%* improvement threshold

      • On B1, my point is very legal and technical. I fully agree that Canada has no moral argument to justify doing nothing. But Canada explicitly linked its Copenhagen commitment to the U.S. passing legislation. If that doesn’t happen then there is no commitment. Canada would need a time machine to be able to make that argument credibly in the court of (world) public opinion. I think you and I agree on this point.

    • Care to cite an example of increased friction on the energy front where FN’s land claims are settled? I’m at a loss to know what you’re talking about since the flash point for most of these projects is likely to be BC, where there are practically no claims settled.

      • Go look at a map of Treaty 8 and tell me if you think an energy project is nearby. And look at Treaty 6 while you’re at it.

        • Treaties are not settled landclaims, and i asked you for specific examples of friction. Even big business is of the view that sorting ownership issues out and possibly even self govt will increase certainty in resource ventures. I think you’re generalizing and have nothing to put on the table. OTOH where landclaims have been settled ie., Nisgaa in BC, there are no frictions that i’m aware of due to settlement of claims.

          • I said “in many cases, the most significant First Nations / energy friction points occur where “land claims” are settled, but accomodation of infringements to recognized aboriginal rights is not.” I then pointed to Treaty 8 and Treaty 6. I was thinking of the duty to consult and, if necessary accomodate, adverse effects on treaty rights of hunting and fishing. Oil sands projects, most Montney basin shale gas exploration and production, pipelines supplying LNG feedstock, and the Northern Gateway project will all require consultation and possibly accomodation as a result of adverse effects on treaty rights (Northern Gateway would be on both treaty and non-treaty lands). I think that’s a reasonable list. And, given your statement “Treaties are not settled landclaims”, you can see why I objected to the heading “Resolving First Nation Land Claims” (particularly when the actual text from the NDP is “resolve land claims and treaty disputes”)

  3. ” Still, a commitment to a cap-and-trade policy to meet the Copenhagen commitments would represent one of the most stringent GHG policy commitments worldwide. Assuming the policy would cover most emissions in the economy, a cap that tight would almost certainly lead to market prices for emissions above $100/t. For reference, a GHG cost in that range would impose a cost for the emissions generated from burning gasoline of about 25 cents per litre, and would increase oil sands production costs by $5-10 per barrel depending on the facility.”

    I’m no fan of the NDP, but these numbers are ridiculous. Europe has cap and trade in place to meet the Copenhagen commitments and their current price on carbon is 4.40 euros per ton or $6.50 CAD. So let’s get real here, please…

    (Math this bad sure puts the 2008 global economic meltdown in perspective…)

    • It almost as though the cap (ie scarcity) would influence the price.

      • Really. People always fixate on the trade (price) rather than the cap which is the most important aspect.

        • It’s almost as tbough the two would be linked. See the questions.

  4. Assuming the policy would cover most emissions in the economy, a cap that tight would almost certainly lead to market prices for emissions above $100/t. For reference, a GHG cost in that range would impose a cost for the emissions generated from burning gasoline of about 25 cents per litre, and would increase oil sands production costs by $5-10 per barrel depending on the facility.
    Red meat for the oil and gas industry, and consumers.
    OK, let’s deconstruct these misleading (for me at least) statements.
    First off, you are assuming $100/tonne based upon *somethings* which we have no idea of checking or verifying. For example, is this based upon oil at $60/barrel or $150/barrel? Is it based upon natural gas @ $3 /Mcf or $10/Mcf? Electricity @what, when, where?
    Secondly, the NDP is proposing a cap and trade, not a carbon tax. So, when you apply the $100/tonne against oil, for example, to come up with the $5-$10/barrel, is this only for barrels beyond the cap, or is this based upon total barrels, and an average cost? Big diff.
    For comparison, the AB “carbon tax” of $15/tonne only applies to a small portion of oil production emissions (12%) beyond an intensity level at a designated point in time. And on average, it works out to, in the order of 10 cents to 15 cents per barrel.
    Let’s start there for now.

    • Based on a synthesis of economy-wide modeling work from Jaccard, TD Bank, NRTEE, etc. If you can show me a study which shows Canada meeting 2020 emissions targets without that kind of price, by all means please post it.

    • If you read the piece, you’ll see that I ask the questions on allocations to which you seem to know the answer.

      • If you look at the first two responses, it generates the replies I would expect from individuals who don’t seem to know the answers.

  5. Norway produces about 1.8 million barrels per day of crude oil, but has refining capacity of only 300,000 barrels per day – a little more than enough to serve its domestic consumption.
    Last I checked, the North Sea wasn’t landlocked, and they produce light crude (not bitumen).
    You’re comparing beer with pizzas. And beer bottling with pizza ovens.

    • No, I am comparing exports of resources as extracted with refined products. need me to explain the difference to you?

  6. No, I am comparing exports of resources as extracted with refined products. need me to explain the difference to you?
    Does your kid have a train set? Or an easy bake oven? Might be easier.
    Here, let me try in the interim:
    I’m on a production rig in the North Sea, producing light crude. If I’m not tied into the mainland with a pipeline, then I’m flaring gas (or rcompressing and injecting) and I am shipping light crude by tanker. If I’m exporting in any event, why would I ship it to the mainland, refine, and ship again roughly the same volume?
    Now, in AB, as I mentioned in an earlier post, to ship bitumen via pipeline requires roughly 66% more capacity than upgraded SCO. or diesel/gasoline. It’s different economics, products, and logistics – which *can* (not saying will) affect investment decisions.
    Btw, did you see the Postmedia report roughly a week ago that suggested refinery opportunities outside of US may be limited for bitumen mixes from Canada?

    • So, what you’re saying is that they maximize the value of the resource by selling it to the highest bidder, whether that’s a domestic refinery or an international purchaser rather than “leveraging the value” to create domestic jobs. Gotcha.

      • I think what I’m saying is that these types of investment decisions don’t lend themselves to simple economic principles.
        Or tired and overused slogans like “bucket brigade” or “unicorns”.
        Even Yedlin’s hubby @First Energy Capital would probably agree.

        • I look forward to your post explaining the intricacies.

          • I’ll let you know when the ordinarily cautious Political Editor finishes typing my contract with his middle finger.

          • Try WordPress.com.

          • Sorry, don’t have a public salary or a corporate sponsorship to afford me the pro bono leisure.

          • The comment threads must pay well.

          • We all have a certain level of public duty, in more than one area. It does have limits, tho.

  7. The direction Canada is going on “Energy” is contrary to people’s needs and comfort level and contrary to the direction the rest of the world is going. Harper is pushing Oil Sands down everyone’s throats when we should be moving towards Wind, Solar and Hydro Energy innovation – all forms of Renewable Energy.
    We have enough oil production in Canada as it is, so time to diversify our economy and create some new jobs.
    I am 100% confident that the party that stands up and joins the New Energy World Race that is happening right now, that party will win the government.
    It is time to help change the world and start up new industries that will use our beautiful resources in peace.
    Everyone wants it, we just need a LEADER!

    • *Harper is pushing Oil Sands down everyone’s throats when we should be moving towards Wind, Solar and Hydro Energy innovation – all forms of Renewable Energy.*

      Yeah, like the government of Ontario tried to do – the net result being the increase in electricity rates by a projected 50% or more over the next few years, on top of the increases that have already made home-heating costs sky-rocket since the Ontario Liberals came to power in 2003.

      This is aside from all the wind-power projects that produce electricity that no one wants and that are exported at a massive loss.

      Great plan!

    • No. What Canada needs is an energy policy that doesn’t involve politics, but is the most economically viable. Ontario is currently doing a wonderful job of demonstrating the effects of a politically-fueled energy policy by losing thousands of jobs due to skyrocketing energy costs.

  8. The NRTEE estimate of $100/tonne in 2020 doesn’t have offsets or international trading linkages in the mix. Given that every cap and trade system in existence today includes at least one of these components, its hard to foresee that NDP policy wouldn’t follow suit.
    Why NRTEE didn’t look at a pre-2020 offsets/international scenario in its original analysis is a mystery and undermines the relevance of an otherwise useful exercise.


    • Chris, it’s certainly possible that the government could meet it’s commitments through international purchases. Perhaps Prime Minister Mulcair would entertain your plan. He simply hasn’t told us. Although, given NDP positions on trade vs. domestic production, it seems fairly unlikely that he would. Furthermore, if you take the time to read the body of NRTEE work, you will see significant attention to the potential for domestic reductions in sectors which would be covered by offset programs if they were not covered directly by a downstream emissions provision in the cap-and-trade program.

      • Like every other cap and trade system in existence today, there would be a limit on the quantity of offsets that could be used. At any rate, when climate policy in Canada is ultimately oil sands policy, and oil sands have mitigation costs well north of $100/tonne, coming to grips with the role of offsets and international trading as a way to control costs is central to any policy discussion. Folly – and ultimately irresponsible – it is to behave like the trifecta of Conservatives, CAPP, and Bealists and simply ignore the potential for offsets and int’l trading in the policy mix.

  9. “For reference, a GHG cost in that range would impose a cost for the
    emissions generated from burning gasoline of about 25 cents per litre”

    I understand it’s fashionable to use gasoline prices as an example of cost but it’s misleading to do so. Cap and trade would have little impact on the price at the pump; in fact, that it doesn’t really cover consumer end use of gasoline is one of its flaws.

    • It depends on how it’s structured, Robert. In his run for the NDP leadership, Mulcair endorsed a system where refineries and suppliers would be responsible for combustion emissions. The cap and trade program in Quebec has the same mechanism after a couple of years. If you’re going to ignore combustion emissions downstream, you will need a tighter cap or other policies. See my questions on coverage and stringency.

  10. How about an article on French citizen Thomas Mulcair’s plans to scrap the Clarity Act, and to extend the discriminatory provisions of Bill 101 to federal agencies in Quebec?

    Those are a few elements of his agenda that all loyal Canadians need to be warned of.

    • Yes, that’s clearly relevant to his energy policy.

      • You missed an opportunity to branch out there Mr L.

      • It’s clearly relevant to anyone who cares about Canada.

  11. “So, on this file, both
    the Conservatives and the NDP seem to value arbitrary powers in the
    hands of cabinet: the Conservatives changed the rules so that projects
    rejected by the National Energy Board could be approved by cabinet and
    Mr. Mulcair would change the rules so that cabinet could decide never to
    hear from the National Energy Board in the first place. Mr. Mulcair
    says that an NDP government, “would have never sent something like
    (Keystone XL) to the NEB.”

    If this is in fact Mulcair’s position it is in my estimation a potential blunder on his part.[ it could even be a biggie] since Trudeau and the libs will almost certainly split the diff between Harper and Mulcair, and plump for a return to a hands off regulatory approach.[ hopefully they will turn back the clock on the process and upgrade Canada Environment from junior partner, perhaps even roll back parts of billC38] No refusing to send big projects before the NEB OTOH hand, and no overt second guessing on the other. I’m being kind to the CPC in calling it second guessing, since there are now open accusations that the govt is blurring the lines between security and spying on opponents…in essence politicizing the NEB.
    Edit:The post is a lefty rag all right but they’ve been almost the only paper i’ve seen pushing hard on this story…where’s Ezra when you need him eh!

  12. Has there been any serious consideration of the possibility of exploring GST as a vehicle for reducing carbon?[ don’t all say idiot all at once]
    I realize it lacks the component many say is necessary for changing behaviour, both personally and industrial. But it could be at least bent that way. Certain “goods” could be GST exempt[ hospitals, libraries, schools et al.,] and of course the poor rebated, ideally before the years end. There should of course be zero rebate for high use energy intensive industrial sectors. The lion’s share of the increased GST should of course be mandated by law toward technological innovation.
    Sound too statist? Too bureaucratic? Too hard to sell to the public? It does have the virtue of being already in place and reflecting societies communal responsibility to deal with this, rather then one regionally based, yet nevertheless currently vital cog in the national economy.
    I guess i’m suggesting a form of nationally based sin or windfall tax.

  13. He can do it without western Canada, after all he doesn’t have much representation here. Hands off our resources….

    But hey, it helps get the idea of the Republic of Western Canada off the ground go for it.

    • You’re delusional . Any move to such a republic( good bye your majesty. Good luck with that in BC) would be almost as risky in terms of a civil conflict as QC leaving without a solid yes majority and a mutually agreed and negotiated settlement.

      • you’re calling someone else delusional in the same paragraph as suggesting that QC separating is an actual possibility? Quebec only threatens separation when they want something from the RoC. Western separation is a much more real possibility, because they want to stop being extorted by Quebec.

        • You catch on quick…not

          • Wow. You really schooled me.

            Quebec is on the brink of bankruptcy as it is. How do you think they’d afford to continue when transfer payments from Alberta are cut off?

          • For a start there are no transfer payments from AB. And if you’re seriously asking QC is a big place with lots of resources close to a major world market. They’ll do fine economically after a while, which still isn’t a good reason to just let them go.
            As for the west, only dreamers like you think there is just one west, or north, or anything in this country.

          • They’ll do fine economically after a while

            Yes, after they go bankrupt, elect actual adults, and realize what a good thing they had going with Canada.

            only dreamers like you think there is just one west, or north, or anything in this country

            We’re not “dreamers”, we’re people who actually acknowledge reality. Would you care to explain to me which part of western Canada is east of Quebec? It’s geography, there are clear lines on a map. You can’t just make it up as you go along.

            The only way the west can be east is if you’re literally looking at things upside down.

          • I haven’t the foggiest what your geography point is referring to.
            To be clear – there is no one single amorphous west[ with AB as the presumptive leader] Anyone who’s spent at least a decade in both AB and BC [and a half a decade in the North] as i have, would know this.

  14. Socialist-statism corruption is a great idea so long as the credit is good and other people pay for it. When the credit runs out and those that pay for it leave, they can all share having nothing but unemployment, debt and discontentment.

    Just look at Detroit. And people would vote NDP? Makes me wonder if Canadians like to be rolled over with statism taxes and less standard of living.

  15. SK grew a year after the NDP got the boot. Yep, SK shrunk when NDP economic depression ruled.

    Best part? I know NDP will fail Canada and moving investments offshore is a good idea.

    • it took years for the NDP led Romanow govt to get out of debt after the debt ridden and corrupt PC govt in which 10 MLAs went to jail. It was so bad that the PCs changed their name to Sask Party. And under Romanow, it was the 1st govt either provincially and federally to get out of debt/deficit during the Conservative Mulroney/Chretien years. Thus Wall inherited a govt running in the black and during good times.

  16. sounds like a bare minimum of what is absolutely necessary.

  17. Vote NDP = destroy our economy.

    It should not need to be put any more simply than that. It is a waste of breath to explain it (not to mention that breathing would be taxed under an NDP government).

    Just look at Ontario to see what energy prices can do to a previously thriving eoonomy.

  18. 1 does not square with 3. Refining is carbon-intensive.
    2 is a pipe dream and, in the case of BC for example, largely out of feds jurisdiction.
    4 is an impossibility for an NDP government. You want capital to really flee? Elect an NDP gov’t. Clear rules, sure, but rules that require you not to make a profit.
    5 is where the gov’t fixes your house because you’re now poor thanks to NDP policy.
    6 is where the windmills pop up all around you and you feel like you’ve done something but you still need traditional power generation constantly running because wind is unreliable.
    7. Yes, let’s take decisions about environment and the economy out of the hands of an NDP cabinet. Right after we mount unicorns and fly to Paris with Tom.

  19. I’d prefer a nationwide carbon tax on the model of BC’s – potentially with offsetting reductions in other taxes so that it changes what things people are incentivized to buy (high-carbon products and actions cost more) without substantially changing their income – to cap and trade. It just seems to have the benefit of simplicity, and the BC on is, in my view, very well-designed. But cap-and-trade is significantly better than the nothing that Conservatives are offering. Climate change is a very real problem, it is overwhelmingly due to human action, there is a scientific consensus on both those facts, and in the long run dealing with it will be better for everyone. Carbon emissions HAVE costs, so reflecting those costs in the prices of things isn’t “imposing” costs on the economy – it’s simply making the costs of emissions clear to businesses and consumers rather than imposing
    those rising costs on the world at large.

    The point of including negative externalities in the cost of goods and services is that it makes the economy more efficient.

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