Politicians raise concerns about carbon pricing benefits given to oilsands companies

An oil sands extraction facility is reflected in a tailings pond near the city of Fort McMurray, Alta., on June 1, 2014. (THE CANADIAN PRESS/Jason Franson)

EDMONTON -

Federal and Alberta Opposition politicians want the province to be more transparent about a government program supporting profitable oilsands and other energy companies that say carbon pricing hurts their competitiveness.

“We can only make progress on climate change if industrial emitters are paying their fair share,” said Alberta New Democrat environment critic Marlin Schmidt Wednesday.

A government document dated Dec. 3 lists oilsands producers who have benefited from a 2018 program designed to soften the blow of carbon pricing for companies whose competitors don't pay those costs.

Introduced by the previous NDP government, the Compliance Cost Containment Program was part of an overall emissions reduction plan that forced oilsands producers to measure their performance against the best results in the industry. The incoming United Conservative government removed that element of competition but retained the containment program.

The program allows successful applicants to meet reduction targets through a greater emphasis on offsets rather than absolute reductions. It could also allow them to apply for emissions reduction grants or simply emit more carbon.

Companies could be eligible if compliance costs at a particular facility exceed three per cent of its sales or 10 per cent of its profits.

The document shows Canadian Natural Resources Limited successfully applied five times under the program between 2018 and 2020, the only company to benefit in every year. The company declared more than $2 billion in profits in the third quarter of 2021.

Five other companies benefited, although none as often as CNRL. They include Athabasca Oil, Greenfire Oil and Gas, Keyera Energy, West Fraser Mills and Enerkem Biofuels.

The document contains no information on the size or nature of the benefits provided - a lack that damages the credibility of the Alberta government's entire carbon pricing system, Schmidt said.

“Not only are we not seeing reduced carbon emissions, we're also seeing reduced payments into the (carbon levy) fund,” he said.

Schmidt said the province must be more transparent, pointing out the document doesn't say what benefits CNRL received, how big they were, or how they were justified.

“It's not clear what the criteria for exemptions are. Those things really damage the (program's) credibility.”

No one from CNRL or the Alberta government was immediately available for comment.

Federal Environment Minister Steven Guilbeault said his office is aware of the document and is looking into how the program was used to ensure it meets federal requirements on carbon pricing.

“We expect everyone to follow the rules and regulations,” he said. “If they don't, of course there will be consequences.”

Alberta has been exempted from the federal carbon pricing regime because its program was deemed to meet federal requirements.

This report by The Canadian Press was first published Dec. 8, 2021