Contributed by Robert Lyman © 2022. Robert Lyman’s bio can be read here.


In May 2022, the Canadian federal government published a document entitled Canada’s Emissions Reduction Plan 2030. That document described Canada’s greenhouse gas (GHG) emissions profile (i.e., the breakdown of current GHG emissions by economic sector and region), set out the programs that were already in place to reduce emissions to meet the government’s 2030 target, and identified what measures were currently in the planning stage.

The Emissions Reduction Plan indicates that the government of Canada is using every policy and program measure in the tool kit – regulations, standards and codes, taxes and tax exemptions, subsidies, moral suasion, and more – to stamp out uses of hydrocarbons-based energy in Canada. This article will summarize the economy-wide measures, and the articles that follow will summarize the measures that affect Canada’s different economic sectors.

The economy-wide measures now in place include legislation, target setting, federal government expenditures, carbon dioxide pricing, and other measures intended broadly to increase the cost to consumers of hydrocarbon-based fuels. They also include the so-called “greening government” measures and those intended to facilitate an economic transition away from hydrocarbon fuels.

The current targets are to reduce GHG emissions to 40-45% below 2005 levels by 2030, all within a political goal of the Trudeau government to attain the nebulous goal of reducing emissions to “net-zero” by 2050.

Over the six years 2016 to 2022 alone, the Trudeau government has spent over $100 billion and introduced over 100 climate measures. A family of four is paying $1,800 per year for climate policy measures. That does not include the immense climate-related expenditures of provincial and territorial governments.

Image licensed from Adobe Stock

Under the federal carbon dioxide pricing “benchmark” regime, carbon dioxide taxes have risen from $10 per tonne in 2018 to $50 per tonne in 2022, and they will continue to rise starting in 2023 at the rate of $15 per tonne per year until at least 2030, by which time the rate will be $170 per tonne.

To promote “transition” the Low-Carbon Economy Fund gives money to provincial and territorial governments’ programs through the Leadership Fund, while the Challenge Fund provides over $500 million to a wide range of recipients, including provinces and territories, municipalities, businesses, not-for-profits and indigenous communities and organizations. Meanwhile, the Climate Action and Awareness Fund is spending $200 million over five years to build capacity and finance activities in organizations that support the government’s climate policies, a clear example of using taxpayer money to influence the taxpayers.

The government is now “exploring” investment approaches like carbon contracts whereby taxpayers would “enshrine future price levels in contracts between the Government and low-carbon project investors, thereby de-risking private sector low-carbon investments” and, correspondingly, locking in taxpayers’ risks. It will also “explore legislative approaches to support a durable price on carbon pollution”.

European countries have introduced “border carbon adjustments”, otherwise known as thinly disguised punitive tariffs on firms operating in countries that do not follow European-style climate policies. The Canadian government is “exploring” carbon adjustments as a potential policy tool.

The government is also developing a Federal Greenhouse Gas (GHG) Offset System. Such a system will grant credits, known as “offsets”, to various voluntary projects across Canada that can claim to reduce GHG emissions, so the project sponsors can sell the offset credits to firms whose emissions levels are restricted by governments.

The most controversial of the climate-related measures being contemplated by the Canadian government is probably what it refers to as the “people-centred just transition”. The government claims that the reduction in economic activity associated with and dependent on the production and use of oil, natural gas and coal could be more than compensated for through the new economic activities associated with renewable energy and other “clean” energy sources and uses. In fact, studies in several European countries of the effects of subsidies to renewable energy delivered through higher electricity prices is that for every job created in the renewables sector, two to three are lost in the broader economy.

The transition policy narrative is based on an absolute trust in the ability of governments, through regulation, taxation, and stakeholder capitalism, to centrally plan a fundamental transformation of the economy. This has never worked before, and there are no grounds to believe that it will work now.

There are so many different measures being added that it almost impossible to keep track. The overlap, duplication and redundancy of these measures have been noted in previous Auditor Generals’ reports, but no actions appear to have been taken to bring coherence or economy to the overall approach. Climate policies that now are creating an energy crisis may end by creating a financial crisis.