By Miguel Ouellette
and Krystle Wittevrongel
Montreal Economic Institute
Reducing our greenhouse gas emissions is one of the big concerns of our age. The numerous diverging interests pitted against each other on this issue make it a real puzzler for policy-makers, though. After many years of public policies aimed at reducing GHGs, layered one on top of the other, it’s time to ask ourselves if our rural regions are not being penalized disproportionately by all of these measures.
Carbon pricing is certainly one of the most effective policy tools for fighting climate change. Such a measure works by attaching a price to certain behaviours, such as fuel consumption, to discourage them. However, this should be done in such a way as to reorganize the tax burdens of individuals and companies rather than increasing those burdens. Indeed, this is a principle that is recognized by many economists.
It must be pointed out that Quebec’s carbon pricing policy increases the price of fuel equally across the entire province. It’s easy to see how this will produce the desired effect in a city like Montreal or Toronto, where people can more easily replace driving with taking the bus and/or subway to get to work or visit friends. The problem is that the alternatives are not nearly as convenient in rural regions, and consumers are therefore held captive. It would be a lot fairer to modulate the price of carbon in such a way that rural residents would not be unduly penalized by what quite frankly becomes just a tax grab.
To take another example, the rigid regulatory framework surrounding the repurposing of inactive wells in Western Canada also deprives the population of interesting economic opportunities, all while posing a risk for the environment and, potentially, human health. The current system allows for reclamation and remediation but not for the repurposing of the land. We, therefore, need to take a fresh look at this very real issue and stop getting bogged down in regulatory processes that move at the speed of quicksand.
For example, it took one project over five years to wade through the layers of regulations in repurposing legacy oil and gas infrastructure for community solar power. When you consider that there are 97,000 inactive wells and 71,000 abandoned wells across Alberta, it’s easy to see that we’re missing out on a promising opportunity to revitalize communities and generate economic activity in a region that has suffered in recent years.
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In Quebec, it’s dogma that’s blocking progress. The moratorium on developing the province’s natural gas resources remains in effect, to the detriment of rural residents. It’s the people who live in rural communities, where the average wage is 16 per cent lower than it is in urban centres, who pay the price for this harmful public policy. By lifting its natural gas restrictions for 25 years, Quebec could create 9,200 jobs and gain a total of $93 billion in GDP. We’re talking about a major economic development policy.
We also need to realize that developing these resources and exporting them would help accelerate the closing of coal power plants in other countries, thus reducing global greenhouse gases. Unfortunately, it’s a safe bet that the Quebec government will not seize this opportunity, judging by its decision in the GNL Québec file. And yet, a majority of Quebecers want the province to develop its oil resources, which is an even more sensitive matter.
This is not an exhaustive list of environmental measures that penalize rural regions but merely a snapshot. We all want to take action to slow climate change and mitigate its harmful effects. But we should work together on this, which means that the policies put in place should be fair for all Canadians, regardless of where they happen to live.
Miguel Ouellette is Director of Operations and an economist, Olivier Rancourt is an economist, and Krystle Wittevrongel is Public Policy Analyst with the Montreal Economic Institute. They are the authors of Environmental Policies Should Be Adapted for Rural Canadians.
Miguel, Olivier and Krystle Troy Media Thought Leader. For interview requests, click here.
This commentary was submitted by the Montreal Economic Institute, an independent public policy think tank based in Montreal. MEI is a Troy Media Editorial Content Provider Partner.
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