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CAPP calls out Clean Fuels Standard for potential household cost increase

The federal government is proposing CFS regulations that would hike the cost of living for Canadians in all provinces paying for basic needs: heating their homes, getting to work, or buying their groceries.
The federal government is proposing CFS regulations that would hike the cost of living for Canadians in all provinces paying for basic needs: heating their homes, getting to work, or buying their groceries.

The Government of Canada intends to increase costs to Canadian families and households with the introduction of the Clean Fuels Standard (CFS) - new regulations that will impact consumers at home and at the pump, according to the Canadian Association of Petroleum Producers (CAPP).

The federal government is proposing CFS regulations that would hike the cost of living for Canadians in all provinces paying for basic needs: heating their homes, getting to work, or buying their groceries. As a result of this poorly constructed regulation, everyday Canadians will end up paying up to 11 cents per litre at the gas pump and $1.88 per gigajoule, based on a study by the Canadian Energy Research Institute (CERI). This is in addition to the carbon tax.

"In its current form, the Clean Fuel Standard targets everyday Canadians by making heating their homes in the winter and driving to work even more expensive," said Tim McMillan, CAPP president and CEO. "The government needs to develop regulations that address climate concerns without hitting the wallets of hard-working Canadians, jeopardizing Canada's competitiveness, and sacrificing investment in promising new innovation and technology."

Under the new regulations there is no protection for emissions-intensive, trade-exposed (EITE) industries, such as manufacturing and energy. Businesses could be forced to make additional cuts to operating expenses, decrease investment and capital spending, and potentially jobs. According to CERI, the CFS would add billions of dollars of costs to the Canadian economy, putting more stress on virtually every industry in the country.

Before moving forward with the CFS the government needs to conduct a proper cost-benefit analysis to fully understand how new regulations will hurt Canadians and industry.

"The Clean Fuel Standard is a policy that lacks clarity and increases uncertainty, potentially resulting in billions of dollars more of lost investment in Canada's economy. The result is job cuts and increased household costs for all Canadians," McMillan said. "Canada's oil and natural gas industry has always supported climate policy that manages greenhouse gas emissions, while maintaining a competitive business environment."

Costs to consumers are already increasing. The federal carbon tax on fuels has increased the price of gasoline in Ontario by 4.4 cents per litre, expected to rise to 6.6 cents in 2020, 8.8 cents in 2021, and 11.1 cents in 2022.

The Canadian energy sector can continue to lead as a supplier of choice by continuously reducing GHG emissions through the development of cost-effective clean technology, but needs the support of governments and Canadians to meet new and emerging innovation challenges.

Tools such as EITE policies, tax reforms (including deductibility schedules), and technology incentives will help address the cost challenges and give energy producers the flexibility to continue to invest in technologies and innovations that lower their environmental footprint.

Canada has some of the most stringent emissions-reduction regulatory standards but the global challenge can't be met with Canada going it alone.

The Clean Fuel Standard is currently in early draft stages, and is not expected to be presented for public input by the federal government until 2020 at the earliest.