With the Trudeau Liberals clearly signalling their retreat from the front lines of carbon pricing, they need to find some higher ground they can actually defend. The humble heat pump, and the attempts by pro-fossil fuel interests to confuse the public about its costs and benefits, would be a good place to start fighting.
Heat pumps are able to both cool and heat a home with a single system, and they’re an increasingly attractive option in places like Vancouver and the Maritimes, where climate change is transforming air conditioning from a luxury into a necessity. Even on the Prairies, where colder winters (and a fondness for fossil fuels) make them a less obvious fit, the math around newer models is starting to turn in their favour — especially as summer cooling demand continues to rise there as well.
On their own merits, and in a culture that didn’t transform technologies associated with climate change into political litmus tests, the new generation of heat pumps wouldn’t attract the attention of our elected leaders. Instead, there’s an entirely predictable campaign against them already well underway, one that clearly seeks to undermine interest in them and delay their implementation as long as possible.
Take Alberta Premier Danielle Smith, who seems determined to go to almost any length to defend the status quo and the oil and gas industry’s place in it. In an interview with CTV’s Vassy Kapelos, she said: “As I understand it, you can’t get insurance on a heat pump system anywhere that goes below -20 C." But as with so many things related to climate change and reducing greenhouse gas emissions, Smith does not actually understand it. Yes, some insurers might require a backup system of some sort, whether it’s electric baseboards or gas, but there’s no universal policy on it. And since heat pumps are powered by electricity, an electric backup is an obvious (and in many provinces, pre-existing) solution.
Ah, but what about the cost? That was the argument Conservative strategist Kory Teneycke made on a recent episode of The Curse of Politics, suggesting “heat pumps don’t work super fantastic, especially in the colder parts of this country, and they’re very expensive compared to something like a natural gas furnace.” This is a familiar refrain among natural gas enthusiasts, who are disproportionately found within the conservative political family. Even Laureen Harper, the former prime minister’s wife, chimed in on the issue. “Before you install heat pumps en masse, maybe you should talk to someone who has run one,” she tweeted. “Just saying.”
That’s exactly what the good folks at the Canadian Climate Institute did in preparing a recent report on the costs of various home heating and cooling technologies. It found heat pumps are the lowest-cost option in two-thirds of all cases they modelled, using deliberately conservative assumptions for gas and electricity prices. They’re the biggest winner in places like Vancouver, Toronto, Montréal and Halifax, where the math for single-family homes and townhouses (both old and newer construction) leans decisively in favour of heat pumps. In Toronto, for example, the owner of a townhouse built in 1980 would save $310 per year by installing a heat pump with electric backup over a new gas system with a separate air conditioner. Installing the same heat pump system in a 1940-vintage Halifax house, meanwhile, would save the owner more than $1,000 annually.
There are cases where heat pumps aren’t a good fit, from large multi-family buildings to new houses in ultra-cold climates like Edmonton (although even there, a heat pump with a gas backup comes very close to being comparable in cost). And the Canadian Climate Institute’s math depends on the existence of a carbon tax on natural gas heating, which just became a much more tenuous assumption.
The existence of rebates and subsidies also informs their calculations, and it’s reasonable to assume a future Conservative federal government would decide to eliminate those as well. At a moment where global demand for natural gas is on the verge of rolling over, conservative governments — especially those beholden to provinces like Alberta — will almost certainly try to interfere with the adoption of technologies driving its decline.
The current government has a little less than two years left in its mandate, if the current supply-and-confidence agreement with the NDP holds. They should use that time to ensure the momentum behind heat pumps in Canada is irreversible, just as it already is for technologies like wind and solar.
The Trudeau Liberals are faced with an all-too familiar calculus on climate-related issues, where experts tend to line up on one side of the issue and self-interested amateurs on the other. As they’ve seen with the carbon tax, facts don’t have nearly the clout in our political discourse as they ought to, and sadly, self-interested amateurs can win the day with oversimplifications and strategic fear mongering. If the Liberals want to salvage some part of their climate legacy, they’ll need to win this fight.
‘Tell the Feds’? Try ‘Tell the UCP’ instead
To absolutely nobody’s surprise, Alberta Premier Danielle Smith’s first speech from the throne signalled her clear intention to continue taking the fight to Ottawa. That’s already included a multimillion-dollar advertising campaign called “Tell the Feds” that’s marbled with misinformation about the federal government’s clean electricity regulations. If the Trudeau Liberals hope to mount a comeback before the next election, they need to stop playing defence and start going on the attack.
It’s time for them to launch their own campaign, one they might call “Tell the UCP.” They should match the UCP’s campaign, dollar-for-dollar, to help Albertans understand why their electricity bills are so high — and who’s ultimately responsible for that. For all the Smith government’s constant carping about how the federal carbon tax is making the cost-of-living crisis worse for Albertans, at least they get a rebate that exceeds the direct cost of the carbon tax for the majority of residents.
The UCP’s mismanagement of the electricity market, on the other hand, has caused utility bills to skyrocket in Alberta. While prices were up moderately year-over-year in other provinces this past summer, they went parabolic in Alberta. As Bloomberg reported, “Electricity prices in Alberta in July more than doubled from a year earlier, climbing to a record high and diverging the most ever from the Canadian average in data stretching back four decades.”
And while Smith’s UCP proxies would like to blame the NDP’s decision to phase out coal-fired generation for that, the University of Calgary’s Blake Shaffer has repeatedly poured cold water on that theory. “The rise in Alberta power prices is mostly due to a change in bidding behaviour at the end of the 20-year PPAs [power purchase agreements],” he tweeted in July. “Less competition + tighter market = larger markups.” Translation: utility companies are deliberately withholding power rather than selling it in order to drive up the price.
Ironically, it was the Alberta NDP that saw this problem coming years ago, which is why it proposed shifting Alberta to something called a “capacity market” — one where companies are paid for their capacity, not the energy they actually deliver. When the UCP swept them out of office, getting rid of this change was one of their first orders of business.
As then-energy minister Sonya Savage told the legislature in 2019, “Alberta’s energy-only market works. It has provided reliable and affordable electricity to Albertans and attracted investment for more than 20 years. I know the Opposition wants Albertans to think otherwise, with their fear mongering about blackouts and price spikes, but the truth is that Alberta’s energy-only market has successfully delivered favourable outcomes for Albertans.”
Oh, but it gets worse.
“While it is true that price spikes are associated with an energy-only market,” Savage said, “they are a necessary and desirable feature. They aid in generator cost recovery and actually incent new investment, helping to ensure long-term adequacy of supply.”
During a press conference after Monday’s throne speech, Smith effectively admitted that the NDP had been right all along. “There was a discussion years ago about a capacity market, which would allow us to pay people to be on standby for us,” she said. “A decision was made at that time not to go forward with that, but I think we’re beginning to see the consequences of what happens when there isn’t a mechanism to bring on new baseload power.”
Are we ever. The cost of the UCP’s choices here are being paid by millions of households and thousands of small- and medium-sized businesses, all of which have to account for the rising cost of electricity in their province. This has nothing to do with the carbon tax or the coal phaseout or any other government policies. Instead, it’s a direct result of the UCP’s decisions — ones that are helping a small number of large electricity companies generate very, very large profits right now.
The UCP is counting on the complexity of the electricity system in Alberta to overwhelm the critical faculties of most voters, who are way too busy with their own lives to figure it out on their own. Their noisy campaign against Ottawa helps further muddy the waters here. But if the feds want to stand a fighting chance of defending their own policies in this space, they have to help Albertans better understand the high cost of the ones Smith’s party has already implemented.
David Parker’s defeatism
Last week, I participated in a debate with David Parker, the founder of Take Back Alberta and someone I’ve crossed swords with repeatedly on Twitter. One of the moments that stands out for me, and stood out for the people who watched it, was his insistence that Alberta has been “abused” by Ottawa. He even suggested that it had been “raped”, a description that I obviously pushed back against immediately.
This is rhetorical inflation of the most obvious kind, but it also reflects an all-too-familiar victimhood complex that has come to define the conservative identity in Alberta. It’s one that Parker effectively personifies right now, and his form of advocacy is finding a wide audience in Alberta. As one of my regular conservative correspondents (and I have a few) noted in an email (one I’ve cleaned up the grammar on for clarity’s sake), “I just watched the debate between yourself and David Parker. It occurred to me there is a lack of factual knowledge of Alberta history. Albertans are not whiney babies, we have real reasons for the push back against Ottawa, we are fed up now, enough is enough and yes Alberta has paid more in taxes to Ottawa than we get back since the 1930s. Look up how Pierre Trudeau’s National Energy Program hurt Alberta energy severely and the current Trudeau is still trying to destroy Alberta’s natural resources.”
Let’s unpack that.
As I’ve said many, many times, the notion that Justin Trudeau is trying to “destroy Alberta’s natural resources” is about as ridiculous as it gets. No, he’s not nearly as enthusiastic a supporter of the industry as Stephen Harper, but he’s done far more to advance its interests than any of his Conservative predecessor ever did — and maybe all of them put together. By the time he leaves office he’ll have been responsible for the construction of the first new pipeline to Canadian tidewater in nearly a century, the buildout of Canada’s first major LNG project (one that wouldn’t exist without federal duty waivers) and the creation of massive subsidies for carbon capture and storage projects that it may one day depend upon for its continued existence.
As I told Parker, this continues a long tradition of supporting the oil sands sector, one that actually dates back to Pierre Trudeau and his government’s role in the bailout of the Syncrude consortium in 1974. The much-maligned National Energy Program, meanwhile, was designed in part to support the development of the oil sands sector and other made-in-Canada sources of energy.
There’s no question that it was, as originally designed, meant to shift some of Alberta’s resource wealth away from the oil companies and towards the public and Eastern Canada, although most of the more punitive measures in the original NEP were scrapped after Alberta Premier Peter Lougheed threatened to turn off the taps.But it also would have done many of the things conservatives have spent the last decade pining for: create new pipelines that ship Alberta’s oil to Eastern Canada and help make the country more self-sufficient when it comes to energy.
Indeed, as economist Andrew Leach noted in a 2013 blog post, “the hated National Energy Program proposed an indexed price for synthetic crude from oil sands projects which, had it been followed until today, would have been above the Canadian dollar price of WTI in every year but 1980, 1981, and 2008.” All told, he estimated the Canadian oil industry lost $160 billion in potential revenue because of the elimination of the NEP’s price floor.
There are no guarantees that floor would have remained in place over the course of successive governments (and successive oil price crashes). But much of the angst over the NEP is really a product of spurious correlation that’s been weaponized by conservative politicians and pundits for decades now. The policy, after all, coincided with a massive crash in oil prices and a huge economic downturn triggered by the efforts of central bankers to rein in runaway inflation at the time. The history around it that so many Albertans, and especially older ones, take as gospel fact is really a construct of a political culture that’s fueled by an almost irrepressible sense of victimhood.
To me, that’s what this push for an Alberta pension plan is really about: reinforcing the notion, and narrative, that Alberta is being exploited by the rest of the country. It’s an attempt to set up another grievance mine on the same mountain of bullshit that has produced such a rich vein of misleading nonsense. And unfortunately, it might just work. The feelings of Albertans, after all, don’t seem to care much about the facts.
Rachel Notley scores on her own net
In 2015, Rachel Notley was front-and-centre at her government’s announcement of the Climate Leadership Plan. It was an ambitious package of climate policies anchored in an economy-wide carbon tax, one that was essentially copied and pasted at the federal level a few years later. But in 2023, Notley has apparently decided her government’s signature policy achievement isn’t worth defending.
Rather than criticizing Ottawa for buckling under the political pressure coming from Atlantic Canada and undermining the logic and rationale of the carbon tax, her party brought forward a motion calling for an additional exemption on natural gas. “If Atlantic Canada is being given a break on their home heating bills,” she tweeted, “Alberta should be too.” To add insult to this self-inflicted political injury, the Alberta legislature voted the NDP’s motion down in favour of the UCP’s own on the issue.
Notley’s NDP isn’t the only provincial wing of the party trying to play the populist card here. In Saskatchewan, NDP Jared Clarke introduced a motion expressing concern over the federal government’s carbon tax exemption on home heating oil not applying to natural gas heating. The NDP caucus even backed Premier Scott Moe’s threat to stop collecting the carbon tax come Jan. 1, 2024 if the federal government doesn’t expand its exemption on heating oil to natural gas heating. Said threat is a clear promise to break the law, but it’s one the Saskatchewan NDP apparently felt it needed to support.
Even so, the Alberta NDP’s failed motion might be an even more embarrassing own goal. They were the ones who invested an enormous amount of their political capital in an economy-wide carbon tax which may have ultimately contributed to their defeat in 2019. The next election in Alberta won’t happen until 2027, and this issue — carbon taxes and climate change — may look much, much different by then. It seems very likely that there will be a new federal government, one that prides itself on not taking climate policy seriously. Smith’s UCP — if she’s still even the leader — won’t be able to run against the federal government and Justin Trudeau, and the progression of the energy transition might make opposition to carbon taxes look even more foolish by then.
But for some reason, Notley’s NDP decided to squander their moral and political high ground here so they could have a motion get voted down by the legislature. Let’s be clear: the path to victory in the next election isn’t by out-UCPing the UCP or by offering a diluted version of their policies and populism. It’s by articulating a clear alternative to Albertans and telling a story about their shared future they can get excited about. And guess what? Nobody gets excited about drinking Diet Coke.
The Wrap
If my piece on heat pumps has you wondering if they’re right for your home, the Canadian Climate Institute created this really cool calculator that lets you explore the potential savings associated with switching to one. Give it a whirl.
I would be remiss if I didn’t draw your attention to the Bank of Canada’s rather remarkable online intervention on Twitter, one that served as a reminder of why some of us are still on that otherwise wretched hell site. Dr. Sylvain Charlebois, a professor at Dalhousie University who has dubbed himself “The Food Professor” on Twitter, has become a familiar face (and source) in stories about food inflation in Canada. He has also repeatedly misrepresented the impact of the carbon tax on said, and drawn the ire of a number of other well-respected academics as a result.
Apparently, the Bank of Canada finally had its fill of that nonsense. It posted a response to one of the Food Professor’s tweets that explained, in excruciating detail, why he was wrong about his assertions around the carbon tax and its impact on inflation. “At Finance Committee yesterday, Gov. Macklem reiterated 0.15 ppts of the current inflation rate is due to April’s carbon tax increase. We explained that in our letter to you.”
Ouch.
I have no doubt the Food Professor will continue on attacking his fellow academics and blocking anyone else who dares to criticize his math and methods here. But when the Bank of Canada calls you out publicly like this, it’s probably time to look in the mirror instead.
For those who still like to (or have to) head over to Twitter, there’s a really useful thread from Carbon Brief senior editor Simon Evans about the most popular anti-EV arguments being circulated online and the best ways to knock them down. I’d suggest bookmarking it for future reference.
Finally, in case you missed it, I wrote columns last week about Danielle Smith’s fossil-fueled fantasy thinking and the Trudeau government’s foolish decision to axe its own carbon tax. I have absolutely no doubt that I’ll be writing about both again in the near future.