Federal government steps on provincial toes and threatens Canada-wide carbon tax
Environment Minister Catherine McKenna ruffled a lot of feathers this week by announcing the federal government will force a minimum carbon price across the provinces.
McKenna was very short on details, only noting that every province must put a price on carbon and work towards reducing greenhouse gas (GHG) emissions.
Previous discussions between the provinces and federal government had put that minimum price at $15/tonne. Environmental lobby groups would like to see a floor price closer to $40/tonne.
The minister also pointed out that there are large differences between the way provinces have chosen to tackle climate change, which needs to be reconciled.
For example, Quebec and Ontario have an emissions cap-and-trade program, which is technically different than a carbon price. Quebec also exempts all of its carbon-emitting industries from having to purchase carbon offset credits, providing them with free credits under the "carbon leakage" rule. These exemptions are intended to help maintain economic competitiveness and prevent job losses. In contrast, BC and Alberta have no such exemptions for any industry.
Newfoundland has recently introduced carbon reduction legislation, but has yet to put a hard price on carbon. Similarly, Nova Scotia has been working towards reducing GHG emissions, particularly from its electricity grid, which is the largest emitter in the province. PEI has yet to implement a carbon tax across the province.
Saskatchewan Premier Brad Wall has been the most vocal anti-carbon tax voice in the country, noting now is not the time to add a new tax to an already hurting economy. Saskatchewan invested over $1 billion in a new carbon capture and storage (CCS) plant located near Estevan, SK. The Boundary Dam Carbon Capture Project captures emissions from the adjacent coal-burning power plant and is the first commercial-scale CCS plant in the world. However, it is clear the federal Liberals would rather see a complete phase-out of coal power in Canada.
Canada's three territorial leaders are also opposed to a new carbon tax, noting that transportation prices are already exorbitant in the north, making the cost of living a real problem for residents. Northern residents rely heavily on diesel for heating and do not have the luxury of public transport.
The federal government has chosen to stick with targets set by the Harper government, pledging to cut GHG emissions to 30% below 2005 levels by 2030. The Liberals called the targets "unambitious" during the last federal election, but have left the door open to stricter targets, if warranted.
The federal environment minister will meet with her provincial and territorial counterparts on October 3rd in Montreal to begin final negotiations on a Canada-wide climate plan. McKenna will take her new plan to the next UN climate change summit in Morocco in November. Prime Minister Trudeau hopes to hammer out the details with the provinces sometime before year-end.