Electricity hikes on the way: opposition parties

Green Party and PC leaders say Island’s carbon tax will bring more costs to Islanders

PC Leader James Aylward and Green Leader Peter Bevan-Baker say residents should expect an increase in electricity rates, despite the province’s plan to minimize taxes from its new carbon pricing scheme.

They were reacting to Prime Minister Justin Trudeau’s announcement Tuesday that New Brunswick will see the full federal price imposed on carbon emissions. Carbon prices in that province will start at $20 per tonne in 2019 and will max out at $50 per tonne in 2022. Maritime Electric, the Island’s power utility, signed a five-year electricity purchase agreement with NB Power earlier this year. Both leaders say this means Islanders can expect a jump in their electricity rates starting in the spring of 2019.

“I shudder to think what this is going to do to the cost of electricity,” Aylward said on Thursday. The CBC has reported the Maritime Electric agreement factored in costs associated with the carbon tax.

On Tuesday, Premier Wade MacLauchlan said he was “disappointed” with the federal plan to impose a four cents per litre tax on gasoline and diesel. But he said the province would be cutting its excise tax on fuels by three cents per litre. As a result, Islanders will see a one cent per litre tax increase on fuel in 2019 and another in 2020. Home heating fuel will be exempted from the carbon tax. The carbon agreement between P.E.I. and the federal government will be renegotiated in 2020.

But Aylward said other increased costs are likely to be downloaded onto Islanders, due to increasing costs of trucking fuel and other goods from other provinces to P.E.I.

“If these increases in other provinces are going to be levied, then the manufacturers, the transport companies, they’re going to be passing on the extra costs. It’s unfortunately going to affect the consumers at the bottom line here,” Aylward said.

Aylward is opposed to the federal carbon pricing plan. He said the tax burden paid by Islanders is already too high.

Bevan-Baker said the text of the agreement between Maritime Electric and NB Power has not been made public. But he said the additional costs from the federal carbon tax will likely be passed onto consumers.

“I don’t believe that New Brunswick Power is going to willingly absorb whatever additional costs are associated with supplying power to P.E.I.,” Bevan-Baker said. The Green Party had released a carbon tax plan that favoured the federal carbon pricing regime but promised to pay out quarterly dividend cheques to most Islanders. The previous agreement between Maritime Electric and NB Power had maintained rate increases at 2.3 per cent annually up to February 2019. Electricity rates for the province after that will be determined via an application to the Island Regulatory and Appeals Commission.

An e-mailed statement from the province said the agreement will ensure electricity rates are “not affected by the federal government imposing a backstop on New Brunswick,” but did not elaborate how.

The province also announced a 10 per cent rebate program for residential customers, applied to the first 2,000 kilowatt-hours used, in July. This program will be renewable under the current NB Power agreement for up to four years. An emailed statement from the provincial Department of Finance stated the total tax collected from the fuel tax will be $7.3 million during the two-year agreement – $2.4 million the first year and $4.9 million the second.

The province has said this tax will be returned to Islanders but has not said how.