By Gary G. Mar
Published in the Calgary Herald

April 13, 2022

The Liberal government, in its 2030 emissions reduction plan, has stated it is taking a thoughtful approach to implementing a cap on emissions. It will be, according to the plan, a cap system based on engagement and collaboration with industy, provinces, Indigenous partners and others on its design and implementation. Perhaps the first step in that approach would be to consider whether a federal emissions cap is an appropriate vehicle to achieve emissions reductions.

Most Canadians don’t spend their days worrying whether legislation is within the constitutional authority of one order of government or another, and they certainly aren’t interested in opening the Constitution to resolve those messy areas where jurisdiction is shared. Unfortunately, protection of the environment is one of those messy areas. And here is where national and local considerations come into play.

The environment is both local and national. It touches the lives of Canadians where they live and work. At the same time, it is global, without respect for national or provincial boundaries. Canada’s federal form of government is also local and national, balancing the diversity that distinguishes this country and the unity that makes us a country. This leads to a complex problem with real consequences for governments, individuals and businesses: how to reduce GHG emissions as a nation, not despite our diversity but by building on our diverse strengths.

There is no lack of commitment by all governments in Canada to reduce emissions. But that goal does not preclude decisions about who should do what. This is not unlike debates at UN Climate Change Conferences of the Parties or the European Union. But Canada, as one of the world’s more decentralized federations, has its own challenges. Because no single order of government is assigned responsibility for protection of the environment under the Constitution, governments are testing the boundaries of their constitutional responsibilities in their efforts to achieve ambitious goals.

In 1992, the Supreme Court of Canada explicitly recognized shared responsibility for the environment between the provinces and the federal government. In the Friends of the Oldman River ruling, the Supreme Court of Canada determined that each level of gov­ernment can legislate in environmental matters when it is acting from the basis of one of its con­stitutional powers.

The recent Supreme Court of Canada decision on whether the federal government could implement a national carbon price backstop was not the slam dunk many expected. Six provinces supported the claim that the legislation exceeded federal responsibilities under the Constitution; British Columbia was the exception. The federal act was ultimately approved by the court but not without dissenting opinion.

On its face, an emissions cap on the oil and gas sector would be consistent with the reasoning in the 2020 Greenhouse Gas Pollution Pricing Act decision that found carbon pollution has no boundaries and the federal government has the authority to address it by putting a price on carbon. But the decision was narrowly applied to pricing to control emissions. Legislating an emissions cap that ultimately affects production of oil and gas is a clear intrusion into the provincial space. It’s not a question of premiers going to court just to fight another battle — they have responsibilities to uphold. Those responsibilities include “development and management of non-renewable resources in the province … including rates of production.” (Constitution of Canada, Section 92A)

Where an emissions cap would or could limit production runs smack dab into provincial jurisdiction.

Caps sound like a simple solution to achieve emissions reductions. Certainly, emissions reductions from oil and gas are a big part of the solution, but a federal cap is not an appropriate tool.

Most people are unaware that Alberta already introduced a 100-megatonnes emissions cap for oilsands production as part of its 2015 Climate Leadership Plan. Alberta’s cap works because there is sufficient room for growth while providing strong support for innovation to reduce emissions. Because the policy was designed to achieve both environmental and economic goals, it had the support of some of the major oilsands producers.

In addition, it’s one thing for Alberta to regulate 35 oilsands sites with six producers; it’s another for the federal government to attempt to cap emissions from 200,000 oil and gas sites across Canada, sites with different production properties and emissions profiles in different provincial jurisdictions. Further, a federal cap will also sit on top of other policies like increasingly stringent carbon pricing, the elimination of subsidies for fossil fuels and new measures to reduce oil and gas methane emissions.

Consultation with provinces is not the same as respecting provincial jurisdiction. The federal government is right to delay a decision on emission caps while it considers the implications, including whether a cap is needed in light of the Alberta legislation and whether proposing more legislation that will surely be tested in the courts will only cause uncertainty and delay in achieving its goals.

Gary G. Mar is president and CEO of the Canada West Foundation