Discord over carbon pricing

Erosion of federal-provincial co-operation highlighted by bickering over carbon reduction strategies

At the international conference on global warming, held near Paris in 2015, Prime Minister Trudeau committed Canada to reducing greenhouse gas emissions to 30 per cent below their 2005 levels by 2030. To address the actions needed to meet the target set at Paris, the federal government convened a meeting of first ministers on Dec. 9, 2016. At the meeting, the federal government and 11 provincial/territorial premiers signed the Pan-Canadian Framework on Climate Change and Clean Growth, with the goal of reaching emission targets and embrace the opportunities provided by a low-carbon economy.

Benchmarks set by the federal government require provinces and territories to set a price on carbon, starting with $10 a tonne in 2018, and a $10 per tonne increase each year, until it reaches $50 a tonne in 2022. Each province and territory was given the flexibility of implementing its own carbon pollution pricing system, as long as it met the federal benchmarks.

Provinces and territories had until December 31, 2018 to develop a pricing system that would meet the federal benchmarks, or the federal government would impose a carbon tax, beginning in January 2019. In the latter case, the federal government, not the provinces, would receive the tax dollars collected and distribute them to the residents of each province or territory that defaulted, as it saw appropriate.

By 2017- 2018, four provinces, British Columbia, Alberta, Ontario and Quebec had introduced carbon pricing systems, with the first two opting for a carbon tax, and the latter two for cap and trade.

The apparent goodwill and solidarity evident at the December meeting of first ministers was soon to dissipate as economic concerns and political opportunism grabbed the headlines. It appears that the new premier of Quebec, Francois Legault, is willing to maintain the cap and trade system in Quebec, but Premier Doug Ford in Ontario has scrapped the cap and trade program introduced by the previous government, and threatens court action over tax changes.

Former federal cabinet minister, Jason Kenney, leader of the United Conservative Party in Alberta, intends to chop the provincial carbon tax if elected next year. Alberta Premier Rachel Notley has made it clear that she will not support the federal carbon tax program until the Trans Mountain Pipeline goes ahead. Other premiers who are vocal opponents of the federal program include Brian Pallister of Manitoba and Scott Moe of Saskatchewan.

Unfortunately, the Trudeau government has sent mixed messages on reducing greenhouse emissions, a fact that challenges its credibility. After intense lobbying by big polluters, using the argument that they would become less competitive, the federal government agreed to reduce the amount of carbon tax collected from them.

Large companies, which produce 50 megatonnes of carbon dioxide and other pollutants per year, will not incur any penalties until their emissions reach 80 per cent of the average within their industry - the previous limit was 70 per cent. For four industries, which include the cement industry, iron and steel manufacturers and, lime and nitrogen fertilizers producers, the limit was raised to 90 per cent. Giving a green light to major polluters is hardly the way to reach goals stated in the Paris Agreement.

The other bete noir for the Liberal Government, is its insistence on promoting the tar sands, even to the point of buying a pipeline with taxpayers’ money. Currently, the tar sands provide jobs for 0.5 per cent of Canada’s workforce, and contributes a modest 2.5 per cent to the GDP. From any point of view, this is a bad bargain. The tar sands are perceived around the world as a very ugly side of pollution, and Canada’s good reputation is being tarred and feathered by it.

This is a moment of truth for the federal government. In this time of crisis, it must stiffen its resolve and do the right thing, by requiring that its benchmarks for emission reduction be met. If provinces and territories cannot present a viable carbon reduction program by the December 31 deadline, then a national carbon tax should be imposed. The federal government must have the fortitude to keep its promises.