Canadian Manufacturing

Alberta carbon plan to shrink GDP, but provincial NDP signal staying course

Government estimates show economic impact of climate plan will translate to 0.05 per cent slower growth per year between 2017 and 2022



PHOTO: Chris Schwarz/Government of Alberta, via Flickr

Alberta Premier Rachel Notley has been under fire for months from opposition parties to release the economic impact estimates of the province’s climate plan. PHOTO: Chris Schwarz/Government of Alberta, via Flickr

EDMONTON—Alberta released estimates earlier this week showing its climate change plan will shrink the economy in the short term, but Environment Minister Shannon Phillips said the figures are a work in progress.

The province estimates the economic impact of the plan will be 0.3 or 0.4 per cent of the GDP by the year 2022, which translates into slower growth of 0.05 per cent per year during that time.

It also estimates that getting a pipeline to tidewater, which would give Alberta a better price for its oil, would more than offset the input costs on the carbon plan.

Phillips said the numbers are preliminary and don’t take into account the expected growth of a diversified energy industry.

“That (number) does not factor in all of the other investments that we expect will come, not the least of which is at a minimum about $10 billion in new private sector investments in renewables over the next few years,” Phillips told reporters.

Premier Rachel Notley’s government has heard demands for months from opposition politicians to release numbers on the expected impacts of its climate plan.


Related: Wildrose party forms ranks, prepares to battle Alta. carbon tax
Phillips said they are doing so to further the discussion, but stressed the numbers change as new developments and initiatives are undertaken.

“They aren’t complete—that’s the point,” she said.

“These are an ongoing conversation with respect to how we reinvest the carbon levy revenues, how we gain market access, how we create jobs and therefore have an income uplift throughout the economy.”

The province has undertaken a number of measures to retrofit Alberta’s energy-based economy to grow and diversify it while recognizing the importance of reducing the effects of climate change.

Wildrose critic Don MacIntyre agreed the new projections are incomplete, but said the outlook may, in fact, be worse.

“This report does not take into account anything to do with coal shutdown, no compensation, none of that,” said MacIntyre.

Progressive Conservative energy critic Rick Fraser said other numbers already show the impact of government policies.

“We’re seeing small and mid-sized junior oil and gas companies, they’re gone. They’re not going to come back. They’re going to places like Saskatchewan,” he said.

The government has already passed legislation to implement a broad-based carbon tax starting Jan. 1.

There will be full or partial rebates for low and middle-income Albertans.

The tax, on heating bills and gas at the pumps, is expected to bring in $3 billion, which will be reinvested into green initiatives like rapid transit.

Other aspects of the climate plan will be rolled out in coming weeks as Alberta moves toward its stated goal of phasing out coal-fired electricity by 2030 and shifting toward more renewable energy sources such as wind, solar, and hydro.

On Tuesday, the government introduced legislation to cap oilsands greenhouse gas emissions at 100 megatonnes.

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