STIRLING: The Wayback machine for Canadian prosperity

Canadians were shocked as the House of Commons fell into disarray on Dec. 16, 2024. Finance Minister Chrystia Freeland abruptly resigned, just as the much-delayed Fall Economic Statement (FES) was due to be tabled. In concert with that, the Canadian dollar dropped like a stone to 0.69 against the US dollar. It could get much worse. How did we get here? What is our way back?Retired energy economist, Robert Lyman, is a former federal public servant of 27 years, 10 years a diplomat. In 2017, Lyman gave a presentation titled “Can Canada Survive Climate Change Policy." He pointed out that people did not understand the magnitude nor the destructive impact of the proposed greenhouse gas reduction targets on Canada’s economy. He said: “Achieving the aspirational goal of 80 per cent reduction recommended by the International Panel for Climate Change (IPCC) would mean reducing emissions to 147 megatonnes CO2 equivalent. That would be comparable to reducing Canada’s per capita emissions and our energy economy to the current levels of Bolivia, Sudan or Iraq.”A collection of Lyman’s 2017 writings on the dismantling of the National Energy Board — once considered to be the global gold standard for approving major investments in energy and infrastructure — showed how this would severely damage Canada’s socio-economic strengths.His warnings were not heeded. In 2020, he put together a PowerPoint, “Prosperity Foregone,” showing how climate policies, carbon taxes, and the destruction of the National Energy Board had led to thousands of jobs lost and billions of dollars of investment leaving Canada.While trying, with good will to “do our share” we were engaging in “Futile Folly.” China emits in one month what Canada emits in a year and eight months.In an article of 2021 titled, “The Simple Truth: Where Climate Policy is Taking Canada” Lyman wrote: “The effect of these changes may be the devaluation of the Canadian dollar. It would not be surprising to see the value of the dollar decline to 60 U.S. cents or lower, which would drive up the prices of all imported goods in Canada.”And now we come to the Fall Economic Statement. Canadians were aghast to find out that the budgetary deficit had blown past the ‘guardrails’ of $40 billion to reach $61.9 billion. In the media coverage of the chaos that ensued following Minister Freeland’s abrupt and public resignation, there were few comments on the evermore burdensome climate-related measures in upcoming spending.Robert Lyman provided a quick summary of the climate measures in the Fall Economic Statement. They include energy retrofits with 10-year $40,000 interest-free (to the homeowner) loans. This program will give away an additional $600 million in loans to 15,000 to 24,000 more homeowners, at a fiscal cost of $174.4 million over six years.So, you get to subsidize your neighbour’s energy cost reduction for heating/cooling.Red tape will be reduced, but for ‘green’ projects only. The new Clean Technology Manufacturing Investment Tax Credit is a tax-based subsidy for the EV sector. But it was not a success. As of Dec. 26, 2024, Minister François-Philippe Champagne announced the end of ‘chasing new battery plants,’ perhaps to justify these plans for a failing ‘green transition’ that has no material supply chain, as Simon Michaux has shown.The Fall Economic Statement puts forward the making of “clean” hydrogen through methane pyrolysis via the Clean Hydrogen Investment Tax Credit. This is another tax-based taxpayer subsidy expected to cost $43.5 million over five years. Hydrogen, by the way, is not a viable fuel, and has significant safe handling issues. Prof. Samuel Furfari has shown that hydrogen is a strategy to nowhere. .Converting the Belledune Generating Station in New Brunswick from coal to biomass energy is another FES climate initiative, but there is no estimate of the cost of the conversion or of the cost per tonne of the carbon dioxide emissions avoided.The federal government also plans on using climate policy to restrict trade, to align with Europe’s Carbon Border Adjustment Mechanism.Lyman writes of this: “What timing! Proposing to impose carbon-based tariffs to restrict imports from the United States would be the equivalent of waving a red flag to the Trump Administration bull.”Another initiative, Mandatory Climate-Related Financial Disclosures, will pile more regulatory costs on corporations which will be passed on to consumers, ultimately.Ironically, the contentious Carbon Tax appeared only as “pollution pricing” in Table A1.7, the table that lists the government’s present and projected “pollution pricing proceeds to be returned to Canadians.” Lyman notes that the carbon pricing system includes both the carbon charge imposed on individual consumers and the Output-based pricing system imposed on large industrial users, the latter of which does not include rebates.Canadians are already suffering under the burden of over 400 federal and provincial government climate measures, many of which overlap with or duplicate the others. These include not just the carbon dioxide pricing regime, but also dozens of multi-billion-dollar subsidy programs and onerous regulations affecting electric vehicle mandates, electricity generation, and a cap on oil and gas emissions, among others.The combined effect of these measures has been the loss of employment, a reduction in investment and productivity, increased inflation, and a deterioration in federal-provincial relations. Before Canada can return to prosperity, governments must assess the costs and benefits of these measures and make major reforms in the climate policy framework.Robert Lyman's reports have served as warnings about the potential dangers inherent in Canada's current policies, but only general guides as to the changes that need to be made. The disarray caused by Chrystia Freeland's resignation, along with the several other crises affecting the government, perhaps offers hope that Canadians will soon have an opportunity to elect a new government and that it will chart a different path. Prosperity is not just a word; it is a foundation upon which all of us can thrive and live better lives.We must study this series of Robert Lyman’s reports and use them as our “Wayback Machine” to prosperity and common-sense climate policies. We must make a U-turn, immediately, to avoid the cliff of economic catastrophe.

STIRLING: The Wayback machine for Canadian prosperity

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