Canadian Manufacturing

Ottawa carbon tax toughest on provinces without hydro resources, economist says

Provinces such as Quebec and B.C. are already hydroelectric powerhouses, but not all Canadian jurisdictions are so lucky

October 6, 2016  by The Canadian Press

Canadian developers think the push for renewable generation will allow Canadian companies to export their expertise, especially in hydroelectric generation. Harmon Generating Station in Northern Ontario pictured. PHOTO: Ontario Power Generation, via Flickr

A new national carbon tax could take a greater toll on provinces unable to build dams. Harmon Generating Station in Northern Ontario pictured. PHOTO: Ontario Power Generation, via Flickr

HALIFAX—The president of an economic think tank says provinces without large hydroelectricity resources are raising fair objections to Ottawa’s proposed carbon pricing.

Finn Poschmann of the Atlantic Provinces Economic Council says Ottawa’s insistence that provinces must either adopt a carbon tax or a cap and trade system is ignoring the importance of regulated emission reductions that some provinces have already put in place.

He says emissions standards imposed on industry by regulation are very effective, and layering on additional taxes or imposing cap and trade may do serious economic harm without a matching environmental benefit.

Related: Carbon tax divides nation: Trudeau announcement sparks walkouts, ultimatums
He says the transition away from coal by Nova Scotia and other provinces has already cost billions, and electricity ratepayers in Nova Scotia and Ontario will be paying for it for decades to come. Facing off against rising energy costs, the Ontario government recently canceled plans to hand out its next wave of solar and wind contracts.

Poschmann says Newfoundland and Labrador recently imposed a fuels tax increase which, if it were called a carbon tax, would be the stiffest carbon emissions tax in the country.


The economist notes the federal plan says Ottawa should be “flexible and recognize carbon pricing policies already implemented or in development,” but then only offers a menu that includes carbon emissions taxes and cap and trade.

He says the federal carbon emissions plan does not include the word “regulation,” and “affected provinces are right to vehemently object.”

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