Oil and Gas Regulations: Fulfilling a Promise

By Citizens for Public Justice

Citizens for Public Justice believes that the moral measure of a budget is in how it treats the most vulnerable in society and how it respects the integrity of creation. Our pre-budget submission for Budget 2015 includes one critical step our federal government can take to fulfill its promises and care for the environment.

Recommendation #2: Implement promised regulations across the oil and gas sector to meet Canada’s Copenhagen Accord commitments by 2020.

Canada signed onto the Copenhagen Accord in December 2009, committing to reduce its greenhouse gas (GHG) emissions to 17 per cent below 2005 levels by 2020. To make this target, Canada needs strict GHG emissions standards applicable across the entire oil and gas sector, without diluting regulations for subsectors such as the oil sands.

Currently, GHG emissions are being addressed through a sector-by-sector regulatory approach. By 2015, coal-fired electricity generation will fall under regulatory controls. By 2018, heavy duty vehicle emissions will be substantially reduced to meet North American standards, and by 2025, passenger vehicles and light trucks will emit about half as many GHGs as 2008 models.[1]

But the oil and gas sector was responsible for nearly a quarter of Canada’s GHG emissions in 2011. Given the massive proposed expansions of the Athabasca oil sands activities, this percentage can only be expected to rise. This leaves Canada in need of urgent action if we hope to reach our stated GHG reduction targets.[2]

In June 2011, the federal government announced its intention to work on regulations for the oil and gas sector, to be presented by the end of 2012. By March 2013, then-Environment Minister Peter Kent said the regulations would be ready by mid-year. Later, in the October 16, 2013 Speech from the Throne, the government promised to “enshrine the polluter-pay system into law.”

Commitments to phase out subsidies provided by the federal government to the fossil fuel and mining sectors were announced in three of the last seven federal budgets. Firm follow-up and a definitive schedule to end these subsidies are now needed.

In July 2014, the World Bank wrote that “pricing carbon is inevitable if we are to produce a package of effective and cost-efficient policies to support scaled-up mitigation.”[3] Environmental pricing reform is necessary to allow energy prices to better reflect true costs, drive innovation, and ensure a more efficient use of our resources. While CPJ understands that the government opposes economy-wide carbon pricing, we continue to believe that placing a price on GHG pollution is the most effective policy tool for cutting Canada’s emissions.

In the constrained policy environment of the adoption of the regulatory approach, the least that Federal Budget 2015 should do is to announce regulations for the oil and gas sector, make them quickly applicable (by 2016), and ensure by publishing adequate reporting that they are stringent enough to make a significant contribution to Canada’s GHGs reduction target.

[1] News Release: Harper Government Improves Fuel Efficiency of Canadian Vehicles (2012, November 27). In Environment Canada.

[2] Progress Toward Canada’s Greenhouse Gas Emissions Reduction Target. In Environment Canada.

[3] Statement: Putting a Price on Carbon (2014, June 3). In The World Bank.

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