Just two days ahead of its enforcement, Alberta, Saskatchewan, and the Atlantic provinces are calling on the federal government to immediately halt the implementation of the federal Clean Fuel Regulations.
The new regulations, which take effect on July 1, are part of Canada’s climate plan requiring producers and importers of liquid fossil fuels, like gasoline and diesel, to gradually reduce the fuel’s carbon intensity.
Alberta Environment and Protected Areas Minister Rebecca Schulz say the new policy will harm provincial economies in Alberta, Saskatchewan and Atlantic Canada.
“Combined with the federal government’s carbon tax increase, higher gasoline and diesel costs are expected, putting added cost pressures on other goods and services across the country,” she said in a statement.
“Now is not the time to drive up prices at the pump and increase expenses for vulnerable households, businesses and industries. Families and businesses cannot continue to afford reckless cost and tax increases imposed by the federal government.”
Per the new regulations, the carbon intensity of impacted fuels must fall to 15% below 2016 levels by 2030. According to Environment and Climate Change Canada, this will deliver 26 million tonnes of greenhouse gas emissions reductions. It establishes a carbon credit market in which reducing emissions earn credits that can be sold.
In May, the Parliamentary Budget Office said the Canadian economy will also take a hit under the policy, revealing the regulations will decrease real GDP by up to 0.3% or $9 billion by 2030.
“It is a significant increase in price due to these clean fuel regulations,” Yves Giroux, the Parliamentary Budget Officer, said at the time.
The PBO further estimated that the cost would range from 0.62% of disposable income, or $231, for lower-income households to 0.35% of disposable income, or $1,008, for higher income households.
The impact is highest in the Prairies and Newfoundland and Labrador, costing the average household in Saskatchewan $1,117 or 0.87% of their disposable income, the PBO said.
Schulz also said Alberta already has an Emissions Reduction and Energy Development Plan, which targets a carbon-neutral economy by 2050. The plan currently has no set targets, with Alberta Premier Danielle Smith saying consultations with the industry must come first.
The news comes days after Smith met with Federal Natural Resources Minister Jonathan Wilkinson and Intergovernmental Affairs Minister Dominic LeBlanc. In that meeting, Smith said the federal and provincial governments must create a working group to study net zero by 2050.
