Trudeau’s former finance minister says the feds should align themselves with the incoming Trump administration and abandon their proposed cap on oil and gas production.

“I would question whether putting caps on emissions right now is the right time,” Bill Morneau told CTV News during a Sunday interview.

“Energy security is going to be critical,” he told host Vassy Kapelos, urging the Trudeau government to think “very carefully” about implementing a production cap.

By 2032, the feds hope to cut oil and gas emissions by 35% from 2019 levels. Under the cap, Canada must curtail oil production, for the end of this decade, by 10% and gas production by 12%.

The Trudeau government will finalize the regulations next year and implement them by 2026. They refused disclosure of detailed costs related to the production cap.

Morneau, who led Canada’s finance portfolio during the previous Trump administration, said Ottawa should use other mechanisms to meet its climate goals.

“It's not only about having great relationships,” Morneau said. “It's also about the substance of what we're going to do to be a good partner to the United States,” he added.

Trump pledged to boost oil and gas production during his speech at the most recent Republican National Convention. “Drill, baby, drill,” he said at the time.

Morneau contends that Canada “should be worried … about what we can do to improve our outcomes.”

A recent report by Deloitte, Canada’s leading audit and consulting firm, found the cap would curtail production, destroy jobs and cost the Canadian economy billions of dollars. 

Finance Minister Chrystia Freeland refused to detail how devastating the job losses and investment drain would be from the cap. 

“I don't think there's really a choice,” Morneau said, when asked if Ottawa should abandon its proposed cap.

Freeland, meanwhile, says she “absolutely recognizes the value” of Canada’s oil and gas sector in terms of jobs, revenue, and trade balance it brings. 

A recent economic analysis by the Conference Board of Canada substantiated that claim, stating the cap may reduce Canada’s GDP by up to $1 trillion by 2040. It would also eliminate up to 151,000 jobs by 2030, and reduce federal revenues by $151 billion over that decade.

Alberta would be hit hardest, it said, with 3.6% less investment, almost 70,000 fewer jobs, and a 4.5% decrease in GDP by 2040. It would reduce provincial revenues by up to $127 billion over the same period.

Premier Danielle Smith told reporters last week that Alberta’s government will “actively explore” the use of every legal option, including a constitutional challenge and the use of the Alberta Sovereignty within a United Canada Act, to quash the production cap.

Smith did not mince her words. “It is not an emissions cap,” she clarified. “It is a production cap.”

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