Ottawa can impose carbon price
Federal plan has direct tax on heating, transportation fuels and a separate levy on large emitters who don’t cut emissions by targeted amount
Ottawa is completely within its rights to impose a carbon tax on any province because protecting the environment falls under federal jurisdiction, Environment Minister Catherine McKenna said Thursday.
“Let me be very clear,” McKenna said in the foyer outside the House of Commons. “It is well within the federal government’s right to take action to protect the environment.”
McKenna’s comments seemed to be aimed directly at Saskatchewan Premier Brad Wall, the only premier holding out against any form of carbon pricing, which he says will hurt his province’s recovering economy.
Wall reiterated Thursday his plan to take Ottawa to court to keep it from imposing a carbon tax next year.
“This federal government white paper is frankly more like a ransom note,” he said in Regina.
McKenna released a discussion paper Thursday on the details of a federal carbon price plan which will be imposed on any province that doesn’t have at least a $10 a tonne price on carbon as early as next spring. The exact date will depend on when the legislation, expected this fall, passes.
The federal plan mimics the Alberta carbon program, with a direct tax on heating and transportation fuels and a separate levy on large emitters who don’t cut their emissions by a targeted amount.
Provinces that have their own system can choose how the revenues are spent. B.C. returns them to people through income tax cuts. Alberta divides its take between direct rebates to individuals, small business tax cuts and investments in green energy and clean technology.
Ottawa will decide how the revenues collected by the federal tax are rebated, although McKenna stressed “every penny” will go back to the province where it came from. She is looking at rebates to individuals and businesses which would bypass provincial governments completely.
Wall acknowledged his government has thought about whether revenues from a carbon tax could be used to cut other taxes in Saskatchewan, such as the provincial sales tax which his government just hiked by one point this year. But he said the Saskatchewan economy can’t afford a carbon tax and he won’t agree to do it, even if that means Ottawa could control the revenues.
Minister of Environment and Climate Change Catherine McKenna says Ottawa has authority to impose a carbon tax on the provinces because protecting the environment is federal jurisdiction.