Alberta Premier Danielle Smith has made Ottawa's oil and gas cap the target of a new ad campaign as she faces a Nov. 2 leadership review.Todd Korol/The Canadian Press
The ad is simple: in a short video, a stressed mom and kids walk through the aisle of a grocery store, with basic foodstuffs such as carrots, bread and peanut butter lining their shopping cart. But ominously, the story runs in reverse, with the food items – even a budget-friendly box of mac and cheese – leaving the cart and returning to the shelves.
The ad – a version of which also took over the whole front page of the Halifax Chronicle Herald this week – is part of the Alberta government’s new $7-million campaign against Ottawa’s oil and natural gas emissions cap. It comes at a time when the inflation rate is dropping, but Canadians are still feeling the effect of food prices having risen 26 per cent since early 2020. Conservative Leader Pierre Poilievre is ahead in the polls in part because of his ability to capture the country’s angst over grocery (and housing) prices.
Mr. Poilievre’s success makes it no surprise that the government of Alberta, under United Conservative Party Premier Danielle Smith, would try to imitate his messaging in their new campaign. But the yet-to-be-implemented oil and gas emissions cap doesn’t have much to do with grocery prices. (That’s another story on labour and energy costs, corporate profits, and supply-chain disruptions.)
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The cap is about other important things: climate, yes, but also the layering of multiple climate policies from Ottawa that has engendered a strong pushback from provinces and industry. It‘s about having any ability to attract investment to Alberta’s long-standing and lucrative oil and gas sector. Politically, it’s about both the last gasps of a federal Liberal government that has faced a series of sad-sap polls, and Ms. Smith’s need to shore up support as she faces the judgment of her most unruly supporters in a leadership review on Nov. 2.
While criticizing the Alberta government’s grocery store ad, economist Trevor Tombe pointed out that the effects of the oil and natural gas emissions cap include “lowering productivity, investment [and] output in the sector, and therefore shrinking income and living standards.” The Alberta government has some points to make, even if the storytelling doesn’t completely match.
Three years ago, Prime Minister Justin Trudeau announced that Canada would be the first major oil-producing country to move to cap greenhouse gas emissions from the oil and natural gas sector. The government of Alberta has since moved from feeling suspicious to being outright hostile toward this plan, in part because Ms. Smith, who became Premier in 2022, is a more vigorous opponent of federal energy policies than any recent Alberta leader. This newest campaign mirrors her government’s push against the Clean Electricity Regulations one year ago.
Even with Ottawa’s softened approach to the cap announced last December, Alberta’s concern is that a federal emissions cap is just code for a production cap. Perhaps even more pertinently, it comes as the world sees a growth in global oil demand – and competing producers don’t face the array of climate policies that Canadians do. That includes the cap, but also the consumer and industrial carbon prices, the Clean Fuel Standard and the Clean Electricity Regulations.
The federal Liberals haven’t yet come out with the next round of draft rules on the oil and gas cap – those are expected in the weeks ahead. They say they’re amenable to “compliance flexibilities” and making sure various policies don’t overlap. The Ministers responsible, Jonathan Wilkinson and Steven Guilbeault, also say it’s an outright lie that the emissions cap will force Alberta to curtail production. Oil analyst Rory Johnston – no fan of the O&G cap – said branding the policy a production cap is an unhelpful signal that the net-zero ambitions set out by major oil sands producers, with their hopes focused on carbon capture, aren’t likely to be met.
Also missing from action: Alberta’s own emission reduction targets or increased stringency for its industrial pricing scheme. The Premier’s counter is that governments as unpopular as the federal Liberals can be particularly dangerous in their last months in office. She doesn’t believe they hold Alberta’s distant, primary industry in high regard, and are fine with implementing a policy that acts as a de facto production cap if it bolsters their green credentials. “They’re going to pass all kinds of policy knowing that it would be complicated and take some time to undo,” Ms. Smith said this week, adding that the connection to a family’s food bills is that costs to industry will eventually get passed onto consumers.
Given the Liberals’ standing in the polls, it‘s hard to imagine many federal energy and climate policies will survive another year. That includes the consumer carbon price, and the oil and gas cap. And that means the $7-million being spent by Alberta is probably for naught – like food that goes to rot at the grocery store.