Opinion
KAPLAN: Alberta’s net zero gamble — why a 2026 referendum on net zero is long overdue

The Alberta net zero mandate — linked to Mark Carney’s federal agenda — could devastate jobs, wages, and oil sands output unless voters get the final say.
Opinion
KAPLAN: Alberta’s net zero gamble — why a 2026 referendum on net zero is long overdue
The Alberta net zero mandate — linked to Mark Carney’s federal agenda — could devastate jobs, wages, and oil sands output unless voters get the final say.

Lennie Kaplan spent over two decades in the public service of Alberta, including as a senior manager in the Fiscal and Economic Policy Division of the Ministry of Treasury Board and Finance, where he worked on cross-ministry initiatives evaluating the fiscal and economic impacts of federal and provincial energy and climate change policies.

Alberta Premier Danielle Smith should send her costly $559 billion Alberta new zero emissions (Alberta NZE) mandate, apparently cooked up in partnership with the federal Liberals, to a provincial referendum this fall. That way, all Albertans, not just politicians, can rightly decide on the fate of Alberta NZE.

The Alberta government's commitment to reach NZE by 2050, headlined in the Canada-Alberta MOU, is estimated to have a $559 billion cumulative negative economic impact on Alberta’s gross domestic product (GDP) between 2025 and 2050. This estimate is based on my analysis of comprehensive data drawn from a 2024 custom research project I commissioned through Navius Research.

Unfortunately, the Alberta government continues to withhold its own economic and fiscal analysis of the negative impacts of Alberta NZE from Albertans. Just what is the Alberta government hiding? I believe the Smith government should use an Alberta NZE referendum this fall, to put its “cards on the table.” This includes all information it has prepared on the costs of implementing its Alberta NZE mandate.

In my own impact analysis of Alberta NZE, I looked at the difference between two scenarios, a Rollback Policy Scenario and a Net Zero Policy Scenario. The Rollback Policy Scenario includes federal and provincial investment tax credits (ITCs) and policies implemented at the provincial level. All federal climate change policies are rolled back, including the proposed Oil and Gas Emissions Cap (OGEC), the Clean Electricity Regulations (CER), and the 75% oil and gas methane reduction requirement below 2012 levels by 2030. The Net Zero Policy Scenario is essentially the same as the Rollback Policy Scenario, but after 2030, it mandates a linear decrease to reach NZE by 2050. And it assumes the Alberta government pursues the lowest cost policy path to net zero. Both scenarios represent provincial autonomy over climate change policies and regulations, an approach favoured by the Alberta government.

The analysis of the impact of Alberta’s Net Zero Emissions (NZE) strategy reveals significant economic implications. By 2035, Alberta’s economic activity is projected to be $18 billion ($2021) lower, representing a three percent decrease. This decline is expected to persist, with a further reduction of $19 billion ($2021) or three percent by 2050. Over the period from 2025 to 2050, the cumulative economic activity is anticipated to be $559 billion ($2021) lower, marking a four percent decrease.

The oil sands sector, a critical component of Alberta’s economy, is set to experience substantial downturns. Its GDP is projected to decrease by $3 billion ($2021) or ten percent in 2035, with a more severe drop of $23 billion ($2021) or 69% by 2050. Cumulatively, the oil sands sector’s GDP is expected to be $301 billion ($2021) lower, a 31% reduction between 2025 and 2050. Employment in this sector is also set to decline, with 20,000 fewer full-time equivalents (FTEs) or a 46% decrease by 2050. This downturn is likely to contribute to an overall increase in Alberta’s unemployment rate, which is projected to rise to 8.4% in 2050, a two percent increase from current levels.

Wage rates are also expected to be affected, with average hourly wages ($2021) projected to be $3.00 or four percent lower by 2050. Oil sands production is anticipated to fall significantly, with daily output dropping to about 1.8 million barrels, a 49% decrease by 2050. This reduction in production will likely impact Alberta’s oil and gas net exports, which are expected to decrease by $24 billion ($2021) or 25% by 2050.

Investment in the oil sands sector is projected to plummet, with a $10 billion ($2021) or 71% decrease by 2050. Cumulatively, investment in this sector is expected to be $86 billion ($2021) lower, a 21% reduction between 2025 and 2050. These economic shifts will also affect Alberta’s government revenues, which are projected to decrease by $4 billion ($2021) or five percent by 2035 and $7 billion ($2021) or seven percent by 2050. Over the longer term, from 2025 to 2050, cumulative government revenues are expected to be $140 billion ($2021) lower, a seven percent decrease. These insights underscore the profound economic challenges Alberta faces as it transitions to a net zero emissions economy.

These negative impacts on the Alberta economy are staggering, but the Alberta government seems to accept them as the cost of doing business with Ottawa. In fact, Premier Smith has been pitching Alberta NZE since July 2022, reaffirmed it in Alberta’s 2023 climate change plan, and officially signed on to it, along with the Carney Liberals, as one of the headline items of the Canada-Alberta MOU.

I have grave concerns, along with many other Albertans, about whether Alberta NZE is a wise course of action on the part of the Alberta government, or simply the cost of doing business with Ottawa.

So, let’s put it to the test in a fall 2026 referendum. Albertans should decide on the fate of Alberta NZE, not Prime Minister Mark Carney, Alberta Premier Danielle Smith, and other politicians in the backrooms in Ottawa and Edmonton.
https://www.westernstandard.news/opinion/kaplan-albertas-net-zero-gamble-why-a-2026-referendum-on-net-zero-is-long-overdue/72811