Commentary by Michelle Robichaud, President
Appeared in the Huddle on Tuesday, June 20, 2023 and in the Telegraph Journal on Wednesday, June 21, 2023.
My job at the Atlantica Centre for Energy is to raise awareness with respect to the energy sector in the region.
The political sparring lately about increasing gasoline and electricity prices have made me uneasy and made me contemplate the energy I need to power my home and vehicles.
It’s hard to imagine a future when I don’t fill up my car at a gas station. As we move to adopt zero-emission vehicles (ZEVs), we may not see “gas stations” as we know them today. I’m relieved to know this won’t change tomorrow, but we need to get ready for it.
There will always be a need to re-fuel our vehicles somewhere, be they electric or eventually hydrogen. The full transition to ZEVs will take at least 20 years and refueling our vehicles will likely happen at home or work.
Until then, we will still need petroleum products widely available in our region, and they will cost more.
So, what about the price of gasoline and diesel?
There has been a lot of talk recently about who is responsible for the increasing price of fuels. The simple answer is the federal government, at the request of Canadians.
The 2030 Emissions Reduction Plan was released in March 2022, outlining governments expectations on how Canadian citizens and business would reduce greenhouse gas emissions to fight climate change.
This plan imposes a carbon tax on fossil fuel products for all Canadians, which will continue to increase fuel prices each year until at least 2030.
It also imposes the Clean Fuel Regulations (CFR) that comes into effect on July 1, which affects petroleum products particularly the price of transportation fuels. The proposed CFRs are complex and this type of regulation has not been done before in the world.
Independent studies, including a recent report issued by the Parliamentary Budget Officer, show that Atlantic Canada will bear a significantly larger burden than the rest of Canada from these new regulations.
Transportation green house gas emissions (GHG) in Canada make up 25% of all emissions, so they do need to be reduced to meet climate change goals.
Uniquely in Canada, the Atlantic provinces legislated utilities boards regulate the price of gasoline, diesel and furnace oil (as well as electricity, natural gas and other products). Recently, there was a decision made by the New Brunswick utility board to allow some costs associated with complying with the CFR to be passed along to consumers. The rest of Canada does not operate under the same legislated conditions as Atlantic Canada. Therefore, the market will determine whether the costs will be passed along to consumers, and rest assured, they will be.
To be clear, the Carbon Tax and Clean Fuel Regulations, were designed to be passed along to consumers ultimately as a way to encourage us to reduce our reliance on and use of fossil fuels.
Unfortunately, these taxes and regulations are being implemented while we are entering an era of increased inflation impacting the cost of our every day lives.
So how do we reduce our consumption of fossil fuels?
As I mentioned, transportation is a major contributor to GHG emissions. I’ve recently contemplated how easy it would be to get rid of one of the vehicles sitting in our driveway and take the bus, bike or carpool to work. Our small rural population makes for weak public and active transportation networks and they require significant long term government support. So, for me to make that change it would be difficult, but not impossible.
Home heating is another significant area of consumption in Atlantic Canada. The need for modern energy efficient homes is essential and investing in energy efficiency is a good choice. Residents in the four Atlantic provinces already spend more of their household income on energy costs than in any other province or territory in Canada.
While some residents will be able to afford to pay more for electricity and invest in home retrofits to reduce energy consumption, not everyone can. Likely, those who can least afford cost increases will also have the least ability to invest in areas that reduce emissions.
Can we change our behaviour enough to offset the rising costs?
Yes, we must reduce our use of fossil fuels, over time.
Yes, we must change our behaviour, or pay the price.
With energy costs rising quickly, can we find a balance that is fair for Atlantic Canadians to help offset the added costs of climate change?
We have asked our federal politicians to clearly understand and carefully consider the impact that the federal Carbon Tax and Clean Fuel Regulations will have on the people and economy of the Atlantic Provinces.
To date they have failed to recognize the realities of Atlantic Canada’s unique energy challenges. Our citizens lack energy choices, and we have the highest reliance on refined petroleum products of any region in Canada; this is our energy reality.
For those that can afford to invest in electric vehicles, heat pumps and energy efficiency measures, there are some incentives and resources in each province to help with the transition costs. However, there are many individuals, families and business that simply do not have the resources to make the transition. Supply chain and skilled workforce constraints are creating challenges and are significant priorities for industry in Atlantic Canada.
In the interim, we encourage you to take the time to understand how the federal government’s initiatives to address climate change affect you and your daily routines. Where possible, explore the federal and provincial government programs that can assist in reducing your energy consumption while transitioning to lower-carbon energy sources.
P.S., as a reminder, the federal Carbon Tax, currently $65 per tonne of greenhouse gas emissions, will continue to rise by $15 a tonne until it reaches $170 in 2030.