Thank you for the invitation to appear.
I’d like to start with Fairness Alberta’s motto: “Proudly Canadian. Fiercely Albertan”. We're a group of Canadians who believe Albertans have not been treated fairly by federal economic and fiscal policies. We believe that by respectfully but assertively raising awareness across Canada about the basic facts on these policies, we can persuade a majority to support meaningful reforms that will strengthen both national productivity and national unity. I can’t imagine two higher priorities for your committee, and they are currently very intertwined.
As we detail at fairnessalberta.ca, from 2000 to 2018 Albertans sent $324 billion more in federal taxes than was spent by Ottawa back in Alberta. For most of the last decade, that averaged $20 billion per year, or $4,500 net per Albertan.
Don’t get me wrong. When things are going well for our economy, Albertans are very willing to help Canadians with an outsized share of taxes to pay for government, but when federal policies are either unfair to us today or unfairly threaten our economic future, we, like any province, deserve to be not just heard, but reasonably accommodated. Canada is a vast country, with differing provincial realities. The only way it can hold together is by respecting those differences and by reasonably accommodating them.
What are some of these unfair policies? You can review my testimony to this committee in 2020 on equalization and fiscal stabilization being unfair and needing reform. I mention them because they are the most recent examples germane to this committee of the Prairies being refused reasonable accommodation, but the two most important threats to Canada’s economy and national unity are clear: the 42% emission cut by 2030 dictated to the oil and gas sector and the demand for net-zero electricity by 2035.
As you know, Saskatchewan and Alberta do not have major hydro resources or nuclear plants to generate electricity. In the cold and often dark prairies, we’ve moved from relying on coal to cleaner natural gas for power and heat. The other unique element of Alberta’s electricity system is that it is driven by private investment. This has directly contributed to our success in building renewable power.
In 2022, 75% of Canada’s wind and solar investment was in Alberta, but the best available technology to complement intermittent wind and solar is the natural gas peaker plants. We can't replace this entire system with net-zero emissions by 2035, and even trying to get close will drive up costs here far more than in any other province.
With the electrification push across society, we need more investment in generation, but insisting on an arbitrary 2035 date is scaring those investors away. It also puts a chill on investment in any other sector in Alberta, because almost every business relies on affordable, reliable electricity. Without reasonable accommodation, this policy will damage our economic engine, which will hurt all of Canada.
The other damaging policy is the 42% carbon emission cut by 2030 that only the oil and gas sector faces. While other sectors of Canada’s economy are urged, prodded or incentivized to help Canada get closer to the government’s overall target to cut emissions by 40% by 2030, only oil and gas is being forced to meet that target.
The environment commissioner’s last two reports show that Canada overall will not meet this 40% target by 2030. It shows that 95% of the government’s initiatives have no targets. That’s probably because even if it is technologically possible, slashing emissions that much in seven years is totally unaffordable for most businesses and households without drastically reducing output or the standard of living. In other words, it might be a reasonable accommodation.
The Prairies' biggest economic driver, oil and gas, gets no such accommodation, and it alone must get there in seven short years. The oil and gas sector has made massive investments in reducing emissions. The major players in the oil sands are committing to the monumental task of getting to net zero by 2050. They’re pursuing a major expansion of carbon capture and they’re exploring small modular nuclear reactors, but there’s only so much CCS we can get in place in seven years, and there’s no chance of an SMR getting through federal approvals by 2030.
Alberta is leading the way in blue hydrogen as well, but it will take time because it needs CCS. CCS is needed both for oil and gas emission reductions and for significant decarbonization of our electrical grid. It is expensive, though, and if you really want it built by 2030, 2035 or even 2050, it needs long-term policy and funding support, not destabilizing threats.
Without reasonable accommodation for the Prairies, there is only one way to meet the federal demand for a 42% cut in emissions by 2030: massive cuts to natural resource production. This kills jobs, slashes Canada’s exports and reduces tax revenues.
The twin threats of a forced cut to resource extraction combined with anxiety over the reliability of electricity on the prairies are not just going to cost us our prosperity. They will also strangle the economic engine that has been stabilizing federal finances for decades. We were encouraged to hear a government minister say, regarding the heating oil exemption, “We have policies that have to be adapted to provincial realities.”
Without adapting to our provincial realities on these two policies, you will strain not only future budgets but also the fabric of this nation by refusing us reasonable accommodation.
Thank you for the invitation. I look forward to your questions.