Big Oil to Rachel Notley: Bring on a carbon tax

How much has the political landscape in Alberta changed? Big Oil is now pushing for a carbon tax.

Industry and green groups are talking to Alberta's new government. Turns out they want the same thing

Big oil wants a carbon tax in Alberta

8 years ago
Duration 4:54
Suncor's CEO explains how and why Alberta needs a carbon tax

Big Oil is urging Alberta's new government to toughen up the province's environmental policies.

To hear an oil industry chieftain advocate for a carbon tax, as Suncor's Steve Williams did in front of a downtown Calgary crowd on Friday, may feel incongruous, but consider who those comments were directed to — the NDP — and the situation takes on a tinge of the surreal. 

It's the latest sign of how much the political landscape has shifted in Alberta, as well as the global discussion about climate change. 

We think a broad-based carbon price is the right answer.— Steve Williams, CEO of Suncor 

"We think climate change is happening," Williams, Suncor's chief executive, told reporters. "We think a broad-based carbon price is the right answer."

On its own, an NDP election win would seem to imply that Alberta's environmental policy is about to grow some real teeth. Line that up with a panel discussion — involving an environmental think-tank, voices from Suncor and Cenovus, two of Canada's largest oil companies, and former Tory finance minister Jim Dinning — that was described as a "love in" by the moderator and serious reform in Alberta looks to be a fait accompli.

New rules soon to expire

Alberta's current carbon strategy includes charging large industrial polluters $15 a tonne for emissions over a set amount, through a plan known as the specified gas emitters regulation (SGER).

Adopted in 2007, the regulation made the province the first North American jurisdiction to set a price on carbon. More recently, the specifics of the plan have been roundly criticized for being too lax to make a meaningful dent in overall emissions.

The question now is whether premier-designate Rachel Notley's new government will choose to make the plan more stringent or, perhaps, move toward a broad-based carbon tax that would start charging everyday Albertans for emissions, alongside industry. 

The emissions regulation is set to expire at the end of June. Whether the new government is ready to take more aggressive policy steps at that time or if it opts to proceed more methodically, a consensus is forming that the timing of an overhaul will be marked in months, not years. 

In backing the idea of a carbon tax, Suncor's Williams repeatedly noted that since 80 per cent of emissions come at the point of combustion, any strategy trying to take on climate change must include end users — people turning ignition switches and flipping on lights at home.

A Syncrude oilsands site near Fort McMurray is among the province's large emitters. (Kyle Bakx/CBC)

It's a message that puts the oilsands giant on the same page as green groups such as the Pembina Institute. Although aligned with the environmental lobby, however, Suncor has different stakes to consider. 

Whether it's a carbon tax in British Columbia or the cap-and-trade system adopted by Ontario and Quebec, each province is taking its own approach to the climate change fight based on its emissions profile. 

As Williams notes, globally 80 per cent of emissions may come from the end user, but that's not so in Alberta. 

Is a carbon tax on the way?

The province's large industrial base, which includes power generators and oilsands mines, accounts for half of greenhouse gas emissions. It's why Alberta is responsible for more than a third of Canada's emissions, despite having only 11 per cent of the country's population. The current emissions regulation may be flawed, but it was tailored to target Alberta's large industrial emitters. 

Should a call for a broad-based carbon tax from Suncor, itself a large industrial emitter, raise any eyebrows? While the company isn't a disinterested third party, Chris Ragan, an economist at McGill and chair of Canada's Ecofiscal Commission, which organized the panel, doesn't think so. 

"I don't see a conflict, a conflict would be if someone heading up an oil and gas company were to say do this to consumers, not on me at all, that would be a conflict," Ragan said. "He's not saying that at all. He's saying do this on all of us. Get us but get everybody because we're all the same." 

Rare as it is for an oil company to call for a carbon tax, rarer still in this age of partisanship is hearing the oil industry, the environmental lobby and business groups sing from the same song book about the need for that tax. 

"I think it is a good thing when we have messages across the room echoing the same thing," Amin Asadollahi, Pembina's director of oilsands research, said after speaking on the panel. "It should send a clear signal to politicians that industry and environmental groups are ready to move forward on a more effective policy. That's a good thing."