After the City of Edmonton and its taxpayers gave him hundreds of millions of dollars to build a new arena, you might think Daryl Katz would show a bit of gratitude. Instead, the billionaire owner of the Edmonton Oilers is apparently trying to get out of a $5-million donation his Katz Group promised to Boyle Street Community Services, a social agency located next to the arena serving the city’s homeless population that’s been fundraising for a new home. Why? Because it “didn’t try hard enough to fundraise on its own.”
I could write an entire column about Katz and how his behaviour is emblematic of Canada’s billionaire class. Instead, I’m proposing a solution to this kind of selfishness. No, I’m not going to suggest we eat the rich. But after more than two years of most Canadians falling behind while the uber-wealthy race even further ahead, it’s time for the federal Liberals to put them back on the menu. It’s time for a federal wealth tax.
As the Canadian Centre for Policy Alternatives (CCPA) noted in a recent report, the 100 best-paid CEOs in Canada made 246 times what the typical employee took home in 2022, breaking the record that was just set the previous year. "The 100 CEOs, who are overwhelmingly male, got paid an average of $14.9 million in 2022,” said senior economist David Macdonald. “This amount surpasses their previously record-breaking pay of $14.3 million in 2021 and sets a new all-time high in our data series.”
Even at the best of times, this increasingly obscene misallocation of corporate resources would be worthy of our collective attention. But when most working and middle-class Canadians are falling behind economically, whether due to rising housing costs or broader inflationary pressures, this ever-widening gap between the ultra-rich and the rest of us begs for intervention.
That’s especially true when the government of the day is busy drowning in its own unpopularity and in desperate need of a lifeline. When Canadians were polled on the prospect of a wealth tax on the one per cent back in 2021, it garnered almost 90 per cent support nationwide, including 82 per cent from Conservative voters. If the Trudeau Liberals paired a wealth tax with a pledge to dedicate the proceeds to health care and housing, it’s hard to imagine how it wouldn’t improve their increasingly dismal prospects.
The amount of money we’re talking about here isn’t inconsequential. The CCPA’s Alex Hemingway modelled a wealth tax that includes three brackets, beginning at one per cent above $10 million, rising to two per cent above $50 million, and topping out at three per cent above $100 million. This would impact fewer than 100,000 families nationwide, and would raise more than $32 billion in the first year. Within a decade, it would hit $51 billion, for a cumulative total of $409 billion over the 10 years. That’s real money that could help solve real problems for a really large number of Canadians.
As to concerns about capital flight, Hemingway suggested a Canadian wealth tax could be paired with an exit tax for anyone trying to flee its provisions (say, something on the order the 40 per cent on expatriation that was proposed by Bernie Sanders and Elizabeth Warren in their own 2021 proposal) “in recognition of the contribution of Canadian society to creating huge fortunes.”
Yes, groups like the Canadian Taxpayers Federation and the Fraser Institute would howl about creeping socialism and the impact this could have on the motivation and ambition of Canada’s wealthiest landowners, corporate executives and other holders of capital. And sure, federal Conservative politicians would complain about the divisive nature of the Trudeau government. Let them show their respective hands here. Let them stand with the tiny community of plutocrats and billionaires and explain why Canadians shouldn’t have access to things like better health care or more affordable housing.
If the Liberals and the New Democrats want to take the fight to Pierre Poilievre, and they should, this would be a good way to do it. They can put his man-of-the-people routine to the test and see if it actually holds up under some pressure and scrutiny. Will he side with the working-class voters he’s so clearly trying to attract, or will he instinctively oppose a tax that only impacts the tiniest slice of the most privileged people in Canada? A wealth tax could be that rarest of birds in Ottawa: good politics in the service of good policy. It’s time to finally let it take flight.
On electricity regulations, the Liberals are still the only adults in the room
On Friday, the federal government quietly announced updates to its proposed Clean Electricity Regulations, the ones that provincial governments in Alberta and Saskatchewan have tried to pretend will bring ruin and darkness to millions of households. And while Ottawa didn’t accept their ludicrous premise, it made some important changes that align with the recommendations made by actual policy experts. Constructive criticism, as it turns out, still works in certain circles.
Those recommendations included more flexibility for generators to meet and manage winter peaks in demand like the one most of Western Canada saw last month, along with more optionality in terms of managing existing generating assets. Andrew Leach, one of the policy experts who offered constructive criticism of the initial draft regulations, sounded pleased with the changes. “It’s a step in the right direction,” he told the Calgary Herald. “The really important bit is for people to see that the federal government is listening.”
The UCP government in Alberta, on the other hand, clearly isn’t. Despite the fact that the regulations will allow plenty of lower-emission natural gas generators to continue operating well into the 2040s, Premier Danielle Smith and her environment minister are still proudly sporting their can’t-do attitude. "[Guilbeault] is still pushing emissions targets that are not feasible or realistic for 2035,” Rebecca Schulz wrote.
As Professor Leach pointed out on the latest West of Centre podcast, this doesn’t align with the facts. “The Alberta government keeps having this discussion about how it’s 2035 versus 2050 but with this flexibility in the regulations, you’re going to get to a point where the federal policy is going to demand essentially what Premier Smith says is her goal.”
The key difference, he says, is that the federal regulations point in the right direction towards those net-zero goals, while provincial plans seem determined to run away from them. “One is a goal with policy to back it up. The other is a goal with ‘we’re going to build more emissions-intensive generation and somehow we’re going to get there magically.’ I think it probably puts a little more emphasis on [Saskatchewan] Premier [Scott] Moe and Premier Smith to say, you have those net-zero goals, but really? Tell me how.”
I hope nobody’s holding their breath here for an actual answer. Those governments, after all, seem deeply uninterested in having anything close to a constructive conversation on climate policy, much less one that involves acknowledging its core imperatives. This is a fundamentally childlike mindset, one that deliberately substitutes their own reality for the one they’d rather ignore. But as we’ve seen in the polls lately (and not just in our own country, either), voters seem determined to reward politicians who behave like petulant and spoiled children. Ironically, it’ll be the actual children who end up paying the price for it down the road.
Truth, lies, and emissions caps
As dumb and dishonest as the discourse around the Clean Electricity Regulations has been, the one surrounding the federal government’s proposed cap on oil and gas emissions could be about to get even worse. The UCP government recently floated some cherry-picked conclusions out of a report it paid for from the Conference Board of Canada, one that — surprise! — shows the emissions cap will be ruinous for Alberta’s economy.
This is because, according to the report, even the most optimistic assumptions they’re willing to make about emission reductions will still require oil and gas companies to reduce production in order to meet the federal target. They don’t actually offer any details about how much production would be cut or why companies would choose to forego revenue rather than just investing in emissions reductions. I asked the Conference Board for more details on their underlying assumptions here, and have yet to hear back.
But according to its data, the emissions cap would eliminate somewhere between 82,000 and 151,000 jobs by the end the decade, 54,000 to 91,000 of which would be in Alberta. It would also reduce GDP by between $600 billion and $1 trillion from 2030 to 2040, with federal government revenues falling by $84 billion to $151 billion over the same period. "It’s very important to be clear on where those impacts are going to be felt and be honest about the size of those impacts," says the Conference Board of Canada's Tony Bonen.
It is, although it’s telling that folks like Bonen aren’t nearly as interested in being honest about the size of the economic impacts associated with the oil and gas industry’s environmental liabilities, which already total as much as $260 billion. Even so, let’s be brutally honest about the “impacts” he wants to talk about. In the Conference Board’s most optimistic scenario, methane emissions are reduced by 75 per cent from 2012 levels by 2030. But as the International Energy Agency has said, that target is kind of the bare minimum we should be asking of oil and gas companies since they can already do it by implementing “well-known measures, such as leak detection and repair programs and upgrading leaky equipment.”
It does not, in other words, depend on some as-yet-developed technological breakthrough. It just requires money and people — both things the industry has in abundance right now. As Anna Kanduth, the director of 440 Megatonnes (a project of the Canadian Climate Institute) said in December, “Achieving a 75 per cent reduction in methane by 2030 is increasingly seen as a floor, not a ceiling, of what’s possible. The federal government has already committed to exceeding this target, and some of the world’s largest oil and gas companies are aiming for near-zero methane by 2030. British Columbia has committed to eliminate nearly all industrial methane by 2035 and Alberta is looking at ways to reach up to 80 per cent by 2030.”
Indeed, according to her organization’s analysis, the emissions cap’s target can be reached while growing production, not cutting it. “In scenarios where oil prices remain at current levels or decline only slightly,” an earlier report says, “the sector deploys the abatement opportunities described above, alongside deep methane reductions, to reduce emissions to 110 Mt while also increasing production between 2020 and 2030. This suggests that the sector chooses to deploy these solutions rather than shutting down production.”
That is pretty clearly not what the Conference Board is assuming, though. Where the federal government has said there are 27 to 29 megatonnes of
“technically achievable” emissions reductions available to industry by 2030, it used 10.5 megatonnes for its analysis. Why? Because the industry hasn’t moved nearly far or fast enough with its promised investments in carbon capture and storaage technolofy.
I’m sure the report’s authors would like to blame that delay on things like federal regulations and bureaucracy, but it’s hard to avoid the conclusion that they’re just unintentionally saying the quiet part out loud here. For all of the industry's advertising and public relations rhetoric, it has no intention of moving with any sense of urgency on decarbonization efforts. Instead, it’s content to continue stalling for time in the hopes the next federal election will produce a government less interested in calling its bluff.
This might be the right approach for them, from a purely self-interested (and cynical) perspective. Then again, as the world continues to decarbonize, the longer they wait the higher the cost of catching (and keeping) up will get. As Prime Minister Justin Trudeau said in an interview Wednesday, “The world is changing, and it’s not a plot by eastern bastards. The world is looking at net-zero right now, and Alberta can be part of that. But right-wing ideology is getting in the way of Alberta’s success right now.”
He’s right, not that anyone here in Alberta will listen to what he’s saying. The biggest impediment to the industry’s long-term success — and by extension, the prosperity of Albertans and Canadians — is a conservative echo chamber that simply refuses to acknowledge the existence of an energy transition, much less its implications for a higher-emitting jurisdiction like Alberta. “Governments should get out of the way of Albertans actually innovating and creating that better future that they can work, build, and deliver,” Trudeau said. Instead, it seems likely that said conservative governments will continue obstructing any and all efforts to get with the program here, whether that’s by fighting federal regulations or imposing moratoriums on the development of clean energy.
On CBC’s Power & Politics, the CEO of the Alberta Business Council suggested that the federal government’s emissions cap was really a “prosperity cap.” But the real cap on prosperity is being implemented by his own provincial government, in the form of its repeated filibustering of climate policies and its stubborn refusal to look further ahead than the next election. That will cost Albertans far more than a federal government that cares about climate change ever could.
Europe doesn’t need our LNG
Remember when Canadian conservative politicians and pundits were lamenting the lost opportunity to export Canadian LNG to western Europe and pretending that the real tragedy was our inability to help our allies there? Well, as it turns out, that opportunity was a mirage — and our allies helped themselves far more quickly than we ever could have.
According to a new report from the Institute for Energy Economics and Energy Finance, Europe’s gas consumption in 2023 was the lowest in 10 years, as efficiency measures and renewable energy deployment have driven demand down 20 per cent since Russia’s invasion of Ukraine. And for all the fear mongering about soaring gas prices, they’re actually trading where they were before the invasion. As a result, the institute is forecasting that Europe’s LNG demand will peak in 2025 and start falling precipitously from there.
“Two years on from Russia’s invasion of Ukraine, Europe’s energy system is more diversified and resilient. The crisis has been controlled to an extent, efficiency measures have been scaled up and renewables and heat pump installations have accelerated. This has set up the continent to continue reducing gas demand,” said Ana Maria Jaller-Makarewicz, its lead energy analyst for Europe.
I have no doubt that the LNG enthusiasts will simply fade into the metaphorical bushes here, Homer Simpson-style, and find a new way to justify their belief in ever-expanding production. But as the world continues to decarbonize and decouple itself from its dependence on fossil fuels, those are going to become increasingly rare — if not soon extinct.
Pierre Poilievre needs to look before he tweets
When a column about “climate tyranny” begins with the invocation of a slippery slope argument and a defence of someone's right to smoke cigarettes, you know you're in for a doozy. Adam Pankratz’s National Post diatribe didn’t disappoint on that front, either, as it managed to connect Steven Guilbeault’s silly remark about federal road building to an apparent desire on his part for “deindustrialization” and the shuttering of “towns and businesses.”
There was no actual evidence provided in support of this thesis, much less the “climate tyranny” promised in the headline, unless you include a bit of hand-waving in Germany’s direction (no mention of Russia’s invasion of Ukraine, oddly!) and the usual stuff about climate radicals and the like.
But that lack of substance and facts didn’t stop Pierre Poilievre from amping up the already absurd allegations in the piece. “Trudeau’s radical environment minister’s decision to end road building is part of a plan to deindustrialize and make us reliant on foreign dictatorships to sell us the things our government bans us from making at home,” he tweeted.
There is, to be clear, no evidence of said “plan to deindustrialize”, much less one that wants to make us reliant on “foreign dictatorships.” I have to assume this is part of his familiar complaint about one refinery in Eastern Canada importing oil from Saudi Arabia, even though its owners have said they wouldn’t replace it with Canadian barrels even if they were available. Either way, it would be nice if the leader of Canada’s official Opposition could stop amplifying these low-rent conspiracy theories, and if one of Canada’s largest (and most heavily subsidized) newspapers could stop printing them.
The Wrap
It’s fire season … in February? That’s the news out of Alberta, where 2024 looks poised to make 2023’s record fire season look like a warm-up act. As John Vaillant wrote in his must-read book Fire Weather, this could become the new normal in short order. "Should the feedback loop of heating and drying continue to intensify, there is in our future a potentially winter-less scenario in which fire weather is the only weather, and ‘fire season’ never ends."
And because I’ve always been a fan of Texas Monthly, here’s a wild story about an oil and gas titan who’s using his faith to shape that state’s politics. If you ever needed another reminder of why keeping money out of public life is essential to protecting the health of our democracy, this should do the trick.
That’s all for this week. Send your love letters and hate mail to the same place: [email protected].