Mr. Speaker, information on the GDP, or gross domestic product, impact estimates of the clean fuel regulations for 2030 is included in the regulatory impact analysis statement, published along with the regulations in 2022 at https://www.gazette.gc.ca/rp-pr/p2/2022/2022-07-06/html/sor-dors140-eng.html.

To evaluate the direct impact of the regulations, as well as the effect of relative price changes on Canadian economic activity and GHG, or greenhouse gas, emissions, a macroeconomic analysis was completed. When these effects are taken into account, it is estimated that the regulations will result in an overall GDP decrease of up to $9.0 billion, or up to 0.3% of total GDP, while reducing up to 26.6 megatonnes of GHG emissions in 2030, using an upper bound scenario where all credits are sold at the marginal cost per credit.

The regulations will work in combination with other federal, provincial and territorial climate change policies to create an incentive for firms to invest in innovative technologies and fuels by setting long-term, predictable and stringent targets. The broad range of compliance strategies allowed under the regulations will also allow fossil fuel suppliers the flexibility to choose the lowest-cost compliance actions available. If the regulations induce more long-term innovation and economies of scale than projected in the estimates presented in this analysis, then the regulations could result in lower costs and greater benefits, particularly over a longer time frame.

The social cost of carbon is a monetary measure of the net global damage from climate change that results from an additional metric ton of CO2 emissions for a given year. Since the publication of the clean fuel regulations in July 2022, the federal government has updated the social cost of carbon estimates, aligned with updates made by the United States Environmental Protection Agency. Taking this into account, it is expected that the monetized benefits of the regulations will exceed their costs, over the full time frame of analysis, 2022 to 2040.

Steven Guilbeault

$491,029.00