Alberta premier rejects carbon targets that limit western growth

Alberta Premier Ed Stelmach on Thursday rejected a new report that says Ottawa can only achieve its greenhouse gas emissions targets by limiting growth in Saskatchewan, Alberta and B.C.

The Calgary-based Pembina Institute and Vancouver's David Suzuki Foundation conducted the study released Thursday.

It was partly funding by TD Bank.

The report says a massive restructuring of the Canadian economy will be required to meet the government’s climate-change targets, with wealth flowing from the West to the rest of the country.

Stelmach told reporters there won't be another wealth transfer to Ottawa on his watch, saying that federal equalization programs have already transferred $117 billion from the province to Ottawa over the last decade. 

Stelmach said Alberta is suffering through a recession just like every other province, and "you can't get blood out of a rock."

TD helped to pay for the study but has not endorsed any targets, though it has supported a national emissions cap.

Chief economist Don Drummond said TD funded the report to pull together for the first time in one study how proposed targets would be met and what the economic cost would be, especially in different regions of the country.

"No one has ever provided a regional perspective," he told CBC News. "You don't get very far in this debate just looking at it at a national level.… There's been no information on this until now."

The targets could be met through direct taxation or by capping emissions and requiring companies to buy allowances —amounting to $100 a ton by 2020 — to emit carbon.

Would raise $46B in tax revenue

The federal government, in return, would receive approximately $46 billion or more in revenue and redistribute that through spending and cuts to personal taxes.

The study concludes that achieving the government target under one scenario would cumulatively reduce Canada's real GDP growth by about 1.5 per cent by 2020. That amounts to losing one year's economic growth over the next decade compared with doing nothing.

"It's not devastatingly large," Drummond said, "but it is very significant."

Economic growth over the same period would be reduced in Alberta by 8.5 per cent, in Saskatchewan by 2.8 per cent and in British Columbia by 2.5 per cent.

"Alberta would still record the fastest growth," Drummond said, and of all the provinces would "still have the biggest per capita income, but nonetheless it does bear the biggest shock."

Benefit certain provinces

The report assumed all the emissions revenue would be redistributed to the public, resulting in massive investments in technology and public infrastructure, such as public transit, and a large personal income tax cut.

It also assumed there would be benefits for developing electricity generation that does not involve burning fossil fuels, which would benefit Manitoba, Ontario and Quebec.

The Pembina Institute's director of climate change, Matthew Bramley, presented the study Thursday to a Commons committee studying an NDP bill, C311, that would set deep emission targets for Canada.

Bramley said the study showed Canada could adopt C311 and "still have [a] strong growing economy, a quality of life higher than Canadians enjoy today and continued steady job creation across the country." 

However, he said, that would only be possible if Ottawa immediately puts a price on emissions.

The report comes ahead of the United Nations climate summit in Copenhagen in December, where countries, including Canada, will attempt to at least make progress on a new global climate treaty to replace the Kyoto Protocol.

As Canada heads into what he expected would be difficult negotiations, Bramley told the committee, passage of C311 before the Copenhagen conference convenes "would send an important signal of Canadian leadership to the world."