Feds on track to impose carbon price on growing number of provinces on Jan. 1
If provinces don't have at least a $20-per-tonne price on carbon emissions by Jan. 1, Ottawa will apply such a price
OTTAWA – Federal officials say there’ll be no problem adding Manitoba to the growing list of provinces where Ottawa will have to apply a carbon tax – but they’re still not ready to say exactly how the revenues raised by the tax will be given back to people in those provinces.
“We’re still completely on track to implement in regions where it is required by Jan. 1,” said an official in Environment Minister Catherine McKenna’s office.
Manitoba did a sudden about-face Wednesday on its plan to start charging a $25 per tonne carbon tax this fall. Premier Brian Pallister said he was backing off because he could not get Ottawa to promise it wouldn’t force Manitoba to raise that price to $30 in 2020, $40 in 2021 and then to $50 in 2022.
McKenna said she’s “perplexed” by Pallister’s move, since Ottawa is still in the middle of reviewing Manitoba’s plan to determine whether it meets the federal standard.
Under the Greenhouse Gas Pollution Pricing Act, provinces that don’t have at least a $20-per-tonne price on carbon emissions by Jan. 1 will have such a price applied by Ottawa. All revenues from it are to be returned to people of the province where the money is collected but the details about how that rebate system will work have yet to be announced.
To avoid having the federal price imposed on them, all provinces had to submit their carbon pricing plans by Sept. 1 and McKenna told The Canadian Press recently that reviews of all those plans were ongoing. Speaking a few days before Manitoba’s pull-back, she said only Saskatchewan and Ontario were clearly lacking.
Saskatchewan’s government has rejected a carbon price from Day 1 and is planning to sue Ottawa over it. Ontario’s new Conservative government under Doug Ford cancelled that province’s cap and trade system almost before the ink on its swearing-in papers was dry.
Manitoba is now on that list, and it seems likely both New Brunswick and Prince Edward Island will be found lacking because their plans are to largely use existing programs rather than introduce new taxes.
Newfoundland hasn’t made public its plan. Nova Scotia has a cap-and-trade regime on its big industrial emitters and it’s not clear yet if that will meet Ottawa’s requirement for a broad-based carbon price.
Alberta will be fine for Jan. 1 but Premier Rachel Notley is no longer committing to raising her province’s carbon price in line with federal requirements because she is irritated that the Trans Mountain pipeline expansion is in limbo. Regardless, if Notley loses the Alberta election next year to United Conservative Party under Jason Kenney, he intends to kill the carbon tax in that province entirely.
A federal official speaking on background said the government needs to have all the reviews done and the plans in place by early December, if a Jan. 1 implementation date is to be met. She said an announcement on how carbon price rebates will work is likely come at the same time Ottawa announces which provinces have not met the federal standard.
McKenna reiterated that she would prefer provinces to have their own plans, but “if they don’t there will be a price on pollution across the country.”
When Ottawa first said it intended to force a national price on pollution, in the fall of 2016, it was at a time when the majority of governments across Canada were Liberal or carbon-tax friendly. While several of the Atlantic provinces were lukewarm at best to the idea of a carbon price, they still signed onto the Pan Canadian Framework on Clean Growth and Climate Change.
One of McKenna’s favourite talking points was to say “80 per cent of Canadians live in a province with a price on pollution.”
She can no longer say that.
With several provinces backing away from carbon pricing the federal Conservatives are demanding the Liberals rethink their strategy.
“The Liberal carbon tax plan is clearly in shambles,” Alberta MP Mike Lake said during question period Thursday.