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Protecting the environment without harming rural regions

Montreal, September 2, 2021 – For many years, governments have been piling measure upon measure to reduce greenhouse gas emissions, all in an effort to fight climate change. An Economic Note published today by the MEI analyzes the extent to which these public policies have a disproportionate impact on the country’s rural regions.

“Carbon pricing is one of the Canadian government’s key policies for reducing GHGs. Obviously, it increases the price of gas, among other things. But in many rural regions, carbon pricing will just increase costs for consumers who have fewer options in terms of transportation,” says Miguel Ouellette, co-author of the publication. “Indeed, demand for fuel is much less elastic in rural regions. This means that increasing taxes will have no notable effect on fuel consumption for rural residents.”

“We therefore find that this tax is unfair: People in large urban centres can avoid it by using public transit, while rural residents are held captive. If only for reasons of fairness, it would be good to modulate this public policy so that it doesn’t hit rural communities so hard,” adds Mr. Ouellette.

“Inactive wells are a real nuisance in oil and gas producing provinces. The complexity of the existing regulatory system makes it very difficult to repurpose these sites that are sometimes in strategic locations. 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,” says Krystle Wittevrongel, Public Policy Analyst at the MEI.

“It’s important to put measures in place to reduce our GHG emissions, but we have to do so without disproportionately penalizing rural regions,” concludes Miguel Ouellette, Director of Operations and Economist at the MEI.

The publication entitled “Environmental Policies Should Be Adapted for Rural Canadians” is available on our website.

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The Montreal Economic Institute is an independent public policy think tank. Through its publications, media appearances, and advisory services to policy-makers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.


Interview requests: Marie-Eve McNicoll, MEI, Phone: 581 777-5060 / Email: memcnicoll@iedm.org

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