Burdensome Ideology

The Cost to Canada of Climate Regulation

Executive Summary

In this article, I will try to identify and estimate the value of the regulations imposed by the federal government that indirectly raise consumers’ costs.

There is no generally-accepted and authoritative list of the climate policy-related regulations imposed by federal, provincial and municipal governments in Canada. Similarly, there is no authoritative estimate available of the cost to Canadians of the regulations that have been implemented and planned.

The most costly and pervasive regulations would appear to be these:

• The Clean Electricity Standards – estimated costs of at least $58 billion
• Emissions Cap on the Oil and Gas Sector – estimated costs of $2.3 billion
• EV Sales Mandate– estimated costs of $25.5 billion
• Net-Zero Building Code by 2030 – Estimated costs unknown but up to $902 billion
• Impact Assessment Mandating Attainment of Net-Zero – estimated costs unknown but potentially over $350 billion

In 2022, the Royal Bank Of Canada published a study entitled The $2 Trillion Transition on the “costs of decarbonization”. As indicated by the title, the bank estimated that the total cost of expenditures needed to attain the net zero goal was $2 trillion. In its March 2022 Budget1, the federal government published projections that the total private and government investments needed to attain net zero would be between $125 billion and $140 billion per year from 2023 to 2050, or somewhere between $3.4 trillion and $5.2 trillion.

Thus, the range of estimates published to date is between $2 trillion and $5.2 trillion. That is an almost unimaginable amount of money. $2 trillion is $50,000 for every one of Canada’s 40 million residents now, or $118,000 for every household. $5.2 trillion is $130,000 for every resident, or $306,000 for every household. Averaged over 27 years, $2 trillion would cost every one of today’s residents about $1,850 per year; averaged over 27 years, $5.2 trillion would cost every one of today’s residents $4,815 per year.

Leaving aside the question of whether net-zero emissions is an attainable goal by 2050, the costs that can already be anticipated fall into a range that would impose unprecedented costs on the Canadian economy and harm the future income growth and standard of living of all Canadians. The story needs to be told to the general public as well as to the politicians making the choices for us.

In a recent article, I offered the most recent information available on the financial cost to Canadians of the federal government’s climate policy-related tax and expenditure measures. Those measures increase costs in two ways – by increasing the amount of revenue that Canadians pay in taxes and by increasing the prices of the energy that people use.

In this article, I will try to identify and estimate the value of the regulations imposed by the federal government that indirectly raise consumers’ costs.