A new cap on emissions in Canada’s oil and gas sector could eliminate over 112,000 jobs by 2040, with minimal environmental benefits, according to an analysis by the Montreal Economic Institute (MEI). The think tank argues that the federal measure, set to reduce emissions by 35% from 2019 levels, will weaken the economy while having little impact on global oil demand.“By targeting Canadian producers, the federal government has no effect on global oil demand,” said Krystle Wittevrongel, MEI’s director of research. “Every barrel of oil Ottawa keeps in the ground here will be replaced by a barrel produced elsewhere.” Wittevrongel criticized the policy, attributing it more to what she described as Environment Minister Steven Guilbeault’s “bias against the energy industry” than to effective environmental strategy.The MEI analysis reflects findings in a report from Deloitte, which estimates the cap could lower Canada’s GDP by 1% by 2040, equating to a $34.5 billion loss in economic potential. According to Deloitte, the regulation could cost Canada 112,900 jobs, many of them high-paying positions in oil and gas extraction, where average salaries reach $151,461 — almost 2.4 times the national average.Wittevrongel expressed doubt that workers displaced by the emissions cap would find equally well-compensated positions in other industries. "Considering the negligible effect it would have on oil and gas consumption, it’s easy to understand why workers in the industry think it’s not worth the risk,” she said.The emissions cap, which takes effect in 2026, is part of Canada’s broader effort to address climate change. But the MEI argues that restricting domestic production will not reduce global emissions, as other countries would likely increase their output to meet global demand.
