REACTION: Emissions cap not worth the job and economic losses, MEI says

• Ottawa unlikely to have an effect on global oil production.

Montreal, March 12, 2025 – The federal oil and gas emissions cap will cost tens of thousands of well-paid jobs for very little environmental impact, points out an MEI researcher in response to the Parliamentary Budget Officer’s analysis published this morning.

“This analysis from the PBO confirms what we have long been saying at the MEI: that this emissions cap will prove costly for Canada’s workers and its economy,” says Gabriel Giguère, senior policy analyst at the MEI. “The emissions cap only makes our economy weaker at a time when it’s already under threat.”

Last November, the federal government published a set of regulations capping Canada’s oil and gas industry’s emissions at a level 35 per cent lower than in 2019, starting in 2026.

A newly released analysis from the PBO estimates such a policy would reduce our collective prosperity by $20.5 billion in 2032 and result in 40,300 fewer jobs than there would otherwise be.

The researcher notes that the jobs in the oil and gas sector are among the highest paid in the country. The average salary of workers in oil and gas extraction is $151,461, which is almost 2.4 times the average Canadian salary.

Given the global nature of the oil and gas industry, he also notes it is unlikely that Ottawa’s attempts to curtail production will lead to lower global emissions.

“Whatever this federal government believes, it is clear that there’s a significant and sustained market demand for energy products throughout the world,” explains Giguère. “Every time Ottawa tries to legislate to keep Canadian energy in the ground, other jurisdictions with lesser environmental standards pick-up the slack and simply sell more oil and gas.

“This policy is all economic pain and no environmental gain.”

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The MEI is an independent public policy think tank with offices in Montreal, Ottawa, and Calgary. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.

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