Lennie Kaplan spent over two decades in the public service of Alberta, including as a senior manager in the Fiscal and Economic Policy Division of the Ministry of Treasury Board and Finance, where he worked on cross-ministry initiatives evaluating the fiscal and economic impacts of federal and provincial energy and climate change policies.The Carney-Smith net zero emissions (NZE) agenda, as set out in the Canada-Alberta MOU, will reduce Canada’s economy by a cumulative $2.1 trillion between 2025 and 2050. And, most notably, $559 billion, or 27% of the cumulative negative Gross Domestic Product (GDP) impact of this NZE agenda, is in Alberta, despite Alberta’s GDP comprising less than 16% of Canada’s total GDP.These estimates are based on data drawn from a 2024 custom research project I commissioned through Navius Research.In my analysis, I look at the difference between two scenarios: an Alternative Rollback Policy Scenario and an Alternative Rollback Policy to Net Zero Scenario. The Alternative Rollback Policy Scenario contains federal and provincial legislated policies, including the federal Output Based Pricing System (OBPS) headline prices rising to $170 per tonne by 2030 (analogous to a $130 per tonne Minimum Effective Carbon Price (MECP)). The Alternative Rollback Policy to Net-Zero Scenario includes an OBPS headline price rising to $170 per tonne by 2030, analogous to a $130 per tonne minimum effective carbon price (MECP), and legislated policies implemented at the provincial level. All other federal climate policies are rolled back, including the proposed Oil and Gas Emissions Cap (OGEC), the Clean Electricity Regulations (CER), and the 75% oil and gas methane reduction requirement below 2012 levels by 2030. After 2030, Canada-Alberta NZE policy mandates a linear decrease to reach net zero or carbon neutrality by 2050. And it assumes governments pursue the lowest cost policy path to net zero..Key insights drawn from my analysis of the Carney-Smith NZE agenda reveal significant economic implications for Canada. Between 2025 and 2050, Canada’s cumulative economic activity is projected to be $2.1 trillion (2021$) lower. This decline is particularly pronounced in the service sector, where the cumulative GDP is estimated to decrease by $1.6 trillion (2021$) over the same period.In terms of employment, the analysis indicates a reduction in total employment, expressed in full-time equivalents (FTEs), by 351,000 by the year 2050. The service sector is expected to experience a similar downturn, with employment in this sector projected to be 313,000 lower. Consequently, Canada’s unemployment rate is anticipated to rise to 8.4% in 2050, marking an increase of 1.6% from current levels.Additionally, the average Canadian hourly wage rate, in 2021 dollar terms, is expected to be $3.18 lower by 2050. These projections underscore the potential economic challenges associated with the Carney-Smith NZE agenda..These NZE impacts are bad news for all Canadians, but especially for Albertans. $559 billion, or 27%, of the cumulative negative GDP impact of the Carney-Smith NZE agenda is in Alberta alone, despite Alberta comprising less than 16% of Canada’s total GDP.Why would Premier Danielle Smith enthusiastically sign on to an NZE deal with the federal Liberals that is not only bad news for Canada but unfairly penalizes Albertans? Is the Smith government taking its direction from Ottawa? Is this the Alberta government’s political calculus that surrendering on net zero is just the cost of doing business with Ottawa? Is this why the Alberta government is withholding its own impact analysis on NZE? To me, it appears that the Carney-Smith NZE agenda has all the shades of a twenty-first-century version of the National Energy Program (NEP).The more I examine this Carney-Smith NZE agenda, cooked up in the political backrooms of Ottawa and Edmonton, the more convinced I become that the federal Liberals and the Alberta government must directly consult with Canadians and scrap this unfair policy. Governments across Canada should be working to establish realistic and achievable emission reduction targets, not pursuing a World Economic Forum (WEF) inspired NZE agenda.Lennie Kaplan spent over two decades in the public service of Alberta, including as a senior manager in the Fiscal and Economic Policy Division of the Ministry of Treasury Board and Finance, where he worked on cross-ministry initiatives evaluating the fiscal and economic impacts of federal and provincial energy and climate change policies.
