National Post (National Edition)
Trump’s election smokes Canada’s carbon foes
Uncle Joe Biden put a metaphorical arm around Canada’s premiers Friday, encouraging them to ignore what Donald Trump has said about climate change and to carry on regardless with plans to usher in a national carbon tax.
“Reality has a way of intruding,” he said. “Whatever uncertainty exists around the near term policy choices of the next president, I am absolutely confident the United States will continue making progress in its path to a low carbon future.”
This unshakable confidence is based on Biden’s judgment that green trends have taken hold and are no longer dependent on government decisions. “They’re market driven, they’re common sense,” he said.
But reality is intruding for the premiers – and it comes in the form of a president who has pledged to cut all spending on climate change, nixing any prospect of a national carbon price.
At the same time, he has promised to reduce the business income tax rate from 35 per cent to 15 per cent.
This was the backdrop against which the premiers met in Ottawa Friday. Not surprisingly, the shifting political landscape south of the border has muted enthusiasm for a tax that would threaten to make Canadian provinces uncompetitive.
Saskatchewan’s Brad Wall has long been adamant against a federally imposed carbon tax since the prospect was raised, arguing it would disproportionately penalize the energy sector. He said he will refuse to sign on to a national levy – and if one is imposed by Ottawa, he will take the feds to court.
He was joined Friday by B.C. premier Christy Clark, who has exposed a west-versus-east fault-line in the discussion.
The Trudeau government’s grand design was to set a floor price of $10 a tonne emitted in 2018, rising $10 every year until it hits $50 a tonne in 2022. Provinces would be allowed to design their own systems to get to that level.
But Clark now argues that B.C.’s direct carbon taxation is more onerous on its residents than the cap and trade systems favoured by Ontario and Quebec will be on theirs.
Cap-and-trade systems are market based and prices fluctuate with demand, meaning there is no guarantee that provinces using it will be able to fetch a certain price.
Clark said B.C. will not sign the deal unless there is a way of ensuring “equivalency” – that is, that all provincial systems are equally cutting emissions.
“If the issue is do we want to have a national tax, let’s make sure that every Canadian is paying the same amount, regardless of where they live, that no province can walk away with an incredible deal at the expense of everybody else,” she said.
Later Clark emerged from the talks to say she had got assurances that Ontario and Quebec’s cap-and-trade carbon market would impose an equivalent carbon price.
But everyone has known that there would be different systems in different provinces for months.
This impasse will likely be broken. But the suspicion is that the ardour for signing up for a national carbon tax has cooled in certain provinces because of Trump’s election.
The Liberal plan was to secure majority support in every region of the country with a twin-track strategy that saw the approval of pipelines move in tandem with the introduction of a national carbon price. It was generally believed the feds would have a harder time winning provincial backing for pipelines than carbon pricing. But the announcement that the government was giving the green light to the Trans Mountain pipeline went surprising well, while the First Minister’s meeting Friday suggested a new hesitancy to put a floor price on carbon.
The history books may well prove that the move toward renewables and energy efficiency is “unstoppable”, as Biden suggested.
But while premiers may desire the approval of historians, they need the approval of the voters who can kick them from office at the next election.
They simply cannot afford to ignore the new reality that has intruded on the plan to create a pan-Canadian climate deal – namely that the incoming U.S. administration is intent on becoming a magnet for jobs and investment by cutting business taxes.