Top Carney adviser wanted list of oil and gas cap 'off-ramps' in 2023, documents show
OTTAWA — One of Prime Minister Carney’s top advisors was hedging his bets against the Liberal government’s oil and gas emissions cap months before it was announced in late 2023, according to documents obtained through access-to-information.
Correspondence and briefing materials from early to mid-2023 show that then deputy finance minister Michael Sabia sought guidance from his staff on “potential off-ramps” from the cap, presumably to allow the government a graceful exit from the policy.
“I’m writing to provide a status update on the (Deputy Minister’s) recent request for analysis on the oil and gas emissions cap. We understand (he) has requested two things: 1) fiscal impacts of the cap; and 2) potential off-ramps,” reads one email sent on April 28.
The email was addressed to two assistant deputy ministers, with two lower-level analysts also receiving copies.
An undated and heavily redacted briefing note titled “Oil and Gas Cap Off-Ramps” also appears in the 45-page package of materials.
Sabia left Finance Canada that September to lead Hydro-Québec and was tapped by Carney this June as Canada’s top civil servant .
The Liberal government announced it was moving ahead with the emissions cap in December 2023, fulfilling a 2021 campaign promise .
Draft regulations released in late 2024 set the cap at 35 per cent below 2019 levels, starting between 2030 and 2032. Oil and gas companies who exceed their emissions quotas could be fined up to $6 million for a first offense and $12 million for repeat violations.
Officials from Finance Canada and the Prime Minister’s Office declined to provide further information about what off-ramps were presented to Sabia or say whether any of said off-ramps are still under discussion.
Sources close to the Liberal government said the emissions cap was a “live” issue and likely a topic of discussion at this week’s cabinet planning forum in Toronto.
Alberta Environment Minister Rebecca Schulz said the subtext of Sabia’s request was clear.
“This type of email, looking for off-ramps, suggests that the federal government knew all along that the emissions cap was a non-starter,” said Schulz.
“It shows that you have senior officials within the Liberal government knowing that this is not going to work, which confirms what the data has been telling us all along.”
Independent studies by Deloitte, the Parliamentary Budget Officer and the Conference Board of Canada found that the cap could cost billions in revenue and kill tens of thousands of jobs, with losses concentrated in Western Canada.
Energy analyst Heather Exner-Pirot said that softening commodities prices have blocked off at least one potential off-ramp.
“If you’d asked me three moths ago, I’d have told you that the ‘grand bargain’ on carbon capture was a possible off-ramp, in terms of something you could swap the cap out for … but I just don’t see how that works when oil is at $60 a barrel,” said Exner-Pirot.
Exner-Pirot said that one saving grace for Carney is that the regulations are still in their draft form.
“The best off-ramp on the table right now is to just not finalize the regs,” said Exner-Pirot.
Carney is expected to make a major announcement relating to Canada’s economic competitiveness on Friday . Some analysts have speculated that the emissions cap and other Trudeau era climate policies could be on the chopping block.
National Post
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