Atlantic premiers say the federal government is ignoring the disproportionate economic harm its new Clean Fuel Regulations will wreak in the region come July 1, when a fiscal double-whammy will see the program come into effect alongside a new consumer carbon price.
Under the national Clean Fuel Regulations, producers and importers will be required to reduce the carbon intensity of gasoline and diesel they produce and sell for use in Canada. The federal government says the move will reduce greenhouse-gas emissions by up to 26 million tonnes in 2030.
But premiers in Newfoundland and Labrador, Nova Scotia, Prince Edward Island and New Brunswick cite figures from the independent Parliamentary Budget Officer, which found that the regulations will result in increased costs for Atlantic Canadians by up to 17 cents a litre for gasoline and 16 cents a litre for diesel by 2030 – partly because of oil refineries downloading their costs onto consumers by increasing fuel prices. Only Saskatchewan will see a larger GDP impact than the Atlantic provinces.
Possible hikes in fuel costs for Canadians on the East Coast will come on top of a federal carbon price on gasoline, diesel and home heating fuel from July 1, though the bulk of that will be returned to consumers through quarterly rebates.
New Brunswick Premier Blaine Higgs said on Wednesday that he supports moving toward a lower-carbon future, but that these new regulations don’t make sense for the region and especially his province, which is home to the largest oil refinery in Canada – a major employer and economic backbone.
“We can’t just flick a switch and expect everything to change overnight,” he said of the continued need for fossil fuels. “If you can’t operate under the regulations that continue to be pushed on the industry, then they’ll just buy refined produce elsewhere and stop production in New Brunswick.”
The Council of Atlantic Premiers first sounded alarm bells in May about the economic effect of the new Clean Fuel Regulations. Last week, it met with federal Environment and Climate Change Minister Steven Guilbeault, hoping he would come to the table with options to help cushion the blow to Atlantic Canadians.
But premiers left that meeting “deeply disappointed,” council chair and PEI Premier Dennis King told Prime Minister Justin Trudeau in a letter last week, in which Mr. King also requested a meeting with Mr. Trudeau.
Mr. Guilbeault did not “offer any solutions to rectify the inequitable burden shouldered by Atlantic Canadians as a result of the regulations, even though we and others, including the Parliamentary Budget Officer and the federal Regulatory Impact Analysis Statement, have long been warning of the impact,” Mr. King wrote.
Atlantic provinces are taking aggressive climate action and have made “substantial progress to advance the green transition,” he said, but the regulations “ask Atlantic Canadians to take on more than their share and to be impacted more than any other part of the country.”
Mr. Guilbeault said in a statement to The Globe and Mail that there is no reason oil refineries should increase fuel prices as a result of the regulations.
“We delayed the regulations by two years to give companies more time to make investments in low-cost compliance options. We will not delay further. The current climate crisis is the result of successive governments delaying decisions and bending to misinformation. We will not make that mistake,” he said.
Poilievre seizes the moment on Atlantic Canada carbon-tax fears
New clean fuel regulations to raise gas prices, affect low-income Canadians the most
Federal Conservative Leader Pierre Poilievre has capitalized on the looming changes to tour the Atlantic provinces this week with the message that his party would scrap the carbon price were it in power.
Atlantic Economic Council senior economist Lana Asaff said the idea of carbon pricing and the new regulations is to reduce demand for goods with high emissions by making them pricier than more environmentally friendly options. But that “doesn’t really work” in a region with little public transit or electric vehicle infrastructure.
“Households are stuck with the status quo but at a higher cost than before. So it doesn’t do much to reduce our emissions and just makes life more expensive for the average individual,” she said.
On Wednesday, as Ottawa forged ahead with its July 1 implementation goal, Atlantic governments once again called for a timeout.
At a press conference in St. John’s, Newfoundland and Labrador’s Minister of Industry, Energy, and Technology, Andrew Parsons, said he’s particularly worried about the impact on Marine Atlantic, a constitutionally protected ferry service that connects the island of Newfoundland to Nova Scotia and burns 30 million litres of fuel a year. He said the province is considering a constitutional challenge to the federal government as it relates to the ferry.
“The federal government is not doing their job. They’re not living up to this right,” Mr. Parsons said.