Federal emissions policies will impose substantial economic costs on New Brunswickers

Over the past several years, the Trudeau government has introduced a variety of new policies aimed at reducing Canada’s greenhouse gas emissions (GHGs). As with any major policy, the costs of such decisions should be evaluated alongside the expected benefits. One recent analysis estimates that the combined effects of these policies will impose substantial economic costs on New Brunswickers.

Most New Brunswickers are likely aware of the federal carbon tax, which places a price on carbon (currently at $80 per tonne) and set to rise to $170 per tonne by 2030. Alongside the carbon tax, the feds have imposed numerous other regulations and mandates including clean fuel regulations, electric vehicle mandates, the phase-out of coal-based electrical generation and building efficiency mandates.

Unfortunately, while the federal government boasts of the emissions-reducing potential of these policies, it has yet to release comprehensive cost estimates of the policies, which are essential to determining whether the benefits are worth the costs.

But according to a recent study, the economic costs will be higher in New Brunswick than in most other provinces and are projected to shrink the province’s economy (as measured by GDP) by 6.6 per cent by 2030. This means the provincial economy will be $2.3 billion smaller than it otherwise would be in the absence of these policies. This is almost $3,000 in lost income per New Brunswicker given the current population. The province’s employment is also projected to shrink by 1.2 per cent, representing a loss of more than 4,600 jobs.

While all provinces are projected to experience declines, New Brunswick’s costs rank 4th highest and 2nd highest in these categories, respectively.

Other modelling from the Canadian Energy Centre sheds light on specific sectors in the province. At a time when cost pressures at NB Power are top of mind, the utilities sector is projected to see the largest cost increase among all sectors of the economy, at 42.1 per cent (again, by 2030). And key industries such as transportation and warehousing (7 per cent) and logging and manufacturing (5 per cent) will also see cost increases.

Finally, while these policies are projected to reduce emissions, they do not achieve the government’s national GHG reductions goals, which means even more economic costs will be incurred as Ottawa introduces additional measures.

At a time of slow economic growth and relative lack of economic opportunity, New Brunswickers and their elected representatives must consider not only the potential emissions reductions but also the substantial economic costs imposed by Ottawa’s emissions reductions regime, as well as New Brunswick’s disproportionate share of those costs.