Energy minister, PBO spar over emissions cap report

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OTTAWA — The office of Canada’s independent Parliamentary Budget Officer took the unusual step of putting out a factual update on Thursday, after critics, including Liberal Energy Minister Jonathan Wilkinson, questioned the findings of a PBO analysis linking the proposed federal emissions cap to deep job losses.

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The note, addressing “misstatements in the media,” stresses that the PBO analysis didn’t, as some have alleged, grossly underestimate emissions reductions that could be achieved by scaling-up carbon capture and storage (CCS).

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The PBO says this discrepancy could stem from the report’s exclusion of reductions attributable to a major oil sands project that’s still in limbo.

“The report noted that a final investment decision for this project has not been made,” read the update.

The PBO also noted that Pathways Alliance, the consortium behind the project, recently indicated that the proposed federal regulations “do not recognize the need for, nor enable, the fiscal supports, policy certainty and regulatory assurances that are necessary to enable decarbonization projects to succeed.”

The PBO analysis estimated that advances in CCS and other abatement technologies would reduce emissions by 16.7 megatonnes by 2030, nearly ten megatonnes lower than the amount the federal government says is “technically achievable.”

Wilkinson said in a Wednesday evening riposte that the PBO analysis wasn’t worth the paper it’s written on.

“Unfortunately, the PBO wasted their time and taxpayer dollars by analyzing a made up scenario,” Wilkinson said in a post on social media platform X.

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“Governments and industry themselves agree on the potential of technically achievable (CCS) to cut pollution from the oil and gas industry while the production of oil and gas increases, and thousands of good jobs are created.”

“(T)he PBO is once again misleading Canadians and ignoring reality.”

Wilkinson spokesperson Carolyn Svonkin said in an email Thursday that the clarification note doesn’t change the fact that the PBO’s analysis is fundamentally flawed.

”All this update does is double down on the fact that the PBO modelled a policy scenario that the federal government is not proposing,” wrote Svonkin.

The PBO analysis projects that a federally imposed cap, set at 27 per cent below 2026 emissions, would kill just over 40,000 Canadian jobs by 2032 and shrink real GDP by 0.39 per cent.

The report also projects that the cap will slow growth in production by 5 per cent.

Even with the cap in place, the PBO still expects to see an 11.1 per cent jump in total oil and gas production by the early 2030s.

Heather Exner-Pirot, an energy analyst with the Macdonald-Laurier Institute, said that the federal government’s lack of transparency surrounding its own numbers makes it hard to say who’s right.

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“It feels a tad hypocritical for the feds to be attacking the PBO’s model when they won’t release their own,” said Exner-Pirot.

Incoming prime minister Mark Carney has previously expressed skepticism about the emissions cap, saying he prefers decarbonization projects like the one put forward by Pathways Alliance, but hasn’t said definitively that he’ll scrap the regulations.

A spokesman for Carney referred the National Post to the climate plan he released during the Liberal leadership campaign when asked on Thursday about his plans for the emissions cap.

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