Canadian governments, federal and provincial, are taking action to address the climate change challenge. Canadians expect them to work together to achieve results and minimize cost impacts.
However, as the Auditor General of Ontario recently highlighted in the 2019 Annual Report Volume 2: Reports on the Environment “Climate Change: Ontario’s Plan to Reduce Greenhouse Gas Emissions”, there is a real risk of unproductive regulatory duplication when provinces and the federal government create a patchwork of overlapping and duplicative policies and regulations, all of which come with costs, and some of which operate at cross-purposes. The end result is costly double counting of emission reductions.
This is particularly true when it comes to the regulation of the fuel Canadians rely on every day for personal travel and to move goods essential to our daily lives and our economy. This is why the federal Clean Fuel Standard (CFS) provides us with a unique opportunity to reduce duplication and cut regulatory red tape and costs to fuel consumers while driving real emissions reductions.
There are already six different regulatory regimes in Canada that mandate renewable content in motor fuels – five provincial and one federal. They impose twelve different requirements – six each for gasoline and diesel – that contribute to this unproductive red tape and potential double counting of emissions reductions. Several provinces are now looking to add more. Quebec for example, has proposed its first ever ethanol and biodiesel mandates, and Ontario is proposing to increase ethanol content in gasoline from 10% to 15%. Meanwhile, British Columbia is looking to strengthen its existing low carbon fuel standard and Manitoba has pledged to increase current renewable content requirements for both gasoline and diesel.
Every new layer of duplicative fuel regulation adds additional strain and costs throughout our energy supply chain: a complex system that refines, blends and distributes gasoline and diesel by rail, truck, ship and pipelines to the over 12,000 retail and wholesale fuel outlets throughout this country. The recent CN Rail strike and the ensuing propane shortage should be a teachable moment for us all as it highlighted the fragile, complex and interconnected nature of our energy supply chain and our 24/7 reliance on energy to work and live.
Surprisingly, this unproductive layering of new fuels regulations adds to the regulatory burden facing business at a time when these same governments are talking about the importance of cutting red tape and reducing regulatory burden to eliminate unnecessary costs.
The federal CFS provides a coherent, national approach to lowering the carbon intensity of fuels. The goal is to reduce climate change inducing emissions by 30Mt per year, by 2030. It is a cornerstone of the plan to achieve Canada’s Paris Accord climate commitment. It focuses on outcomes, enabling fuel providers like Canada’s refiners to pursue carbon intensity reduction opportunities throughout the value chain – levering innovation to develop the most cost-effective solutions. Layering on duplicative policies that impose specific solutions won’t get us to our 2030 goal any faster, and will hinder the innovation required to achieve even greater reductions in transportation GHG emissions over the longer term.
It’s time for provinces to stand down on adding new renewable fuel mandates. Rather than adding new mandates, they should be looking to ensure current mandates are aligned with the CFS, and considering whether those mandates are needed at all when the CFS comes into effect in 2022. That’s a common sense approach to what is, after all, a global problem, not a local one – a solution based on collaboration and focused on achieving real results while reducing cost impacts on Canadian fuel consumers.
