PM pitches new carbon tax plan
Ontario move to scrap cap and trade weakens emissions goal, feds say
OTTAWA— The federal government’s hotly contested climate change plan — which takes provincial efforts into account — will have a weaker impact on green house gas emissions than previously forecast, thanks to Premier Doug Ford’s decision to scrap Ontario’s cap-andtrade system, federal officials said Tuesday.
The watered-down projection for emissions reductions was released as Prime Minister Justin Trudeau gave an impassioned speech about the Liberal carbon price in the Ford family political heartland of Etobicoke.
Trudeau detailed how Ottawa will impose a tax on fuel consumption in four provinces — including Ontario — that refused to devise their own methods to price out green house gas emissions in a way that fulfilled the Liberal government’s criteria. The government says it will return all of the tax revenue via rebates and support for municipalities, small businesses and other organizations — payouts it says will outweigh the cost of the tax for more than 70 per cent of individuals and families.
Alongside Ontario, the fuel tax will be imposed in Saskatchewan, Manitoba and New Brunswick.
Trudeau hailed the plan Tuesday as a show of moral leadership and challenged politicians who oppose carbon pricing to drop their “excuses” and take climate change seriously.
“Their long list of excuses won’t cut it anymore,” Trudeau said.
“We are the first generation that has known how to fix this problem, but we are the last generation that will actually be able to do something about it.”
The plan was immediately condemned by the Conservative opposition and premiers who have disparaged the idea of taxing emissions. Federal Conservative Leader Andrew Scheer pounced on the tax payouts as an “election gimmick” and questioned the claim that families will recoup costs of the tax. In Regina, Saskatchewan Premier Scott Moe called it a“cynical vote-buying scheme.” And Ford dismissed the promised rebates as “phony” and said the tax will only jack up costs for home heating and gasoline.
It was the latest escalation of a clash of ideology on climate change and taxation that could be a major point of contention for the 2019 federal election. The carbon price plan is a central plank of the Liberal government’s policy to curb greenhouse gas emissions, a plan that is attacked by New Democrats as too weak and lampooned by Conservatives as dishonest and harmful to the economy. Trudeau denied the tax payouts are a ploy to win votes. Speaking to Humber College students Tuesday, the prime minister insisted the carbon price plan will help Canada meet its emissions reduction target under the international Paris Agreement to prevent the most calamitous consequences of global warming.
“This is not about politics or about the next election. This is about leadership. This is about seeing this problem and this solution for what it is: a moral and economic imperative to act,” Trudeau said.
But a report tabled in Parliament this year predicts that, even with a nationwide price to deter carbon emissions, Canada is on track to fall short of its goal of cutting emissions to 30 per cent below 2005 levels by 2030. The federal government revealed Tuesday that it now expects emissions reductions from the Liberal plan to price carbon across the country will be 25 to 55 per cent lower in 2022 than reductions forecast by Environment Canada in April.
Speaking on background to brief reporters on the carbonprice plan, officials said the weaker reduction is because Ontario scrapped its cap-andtrade system. Under that system, the province traded emissions credits with companies in California and Quebec, thus contributing to reductions in those jurisdictions, too. The impact of the federal “backstop” carbon price in Ontario won’t make up for those now-forgone reductions, the officials said.
Even so, some environmental leaders welcomed the Liberal plan Tuesday. Green Party Leader Elizabeth May called it a “first step” that must be followed by an effort to eliminate the use of fossil fuels that cause global warming. May pointed to the United Nations report published this month that called for an unprecedented global effort to reduce emissions by almost half in the next 12 years — and then to “net zero” by 2050 — if the world is to prevent the most severe impacts of global warming, including species extinctions, human displacement, extreme weather and the disappearance of coral reefs.
“It’s approximately half of what’s needed to be done,” May said of the Liberal carbon price.
Conservatives, meanwhile, continued to paint the plan as a cash grab that will hurt the economy. Scheer dismissed the government’s cost estimates of the federal tax on fuel, and accused the Liberals of “exempting” big businesses while forcing everyday Canadians to pay the carbon price.
“I don’t buy Justin Trudeau’s numbers at all,” he said. “Liberals have refused to show Canadians their real numbers and their real information.”
Earlier Tuesday, federal officials released a slate of numbers showing how much the tax will cost on different types of fuel, estimates for the tax impact on individuals and households, and how much people in provinces subject to the federal tax will receive in annual rebates.
The tax on fuel will come into effect next April, while the second component of the federal carbon price — the outputbased pricing system (OPBS) for heavy industrial emitters — starts in January.
The fuel tax in 2019 will be $20-per-tonne of emissions, which the government says translates to an extra 4 cents per litre on gasoline. It will go up $10 per year until 2022, when it will be $50-per-tonne of emissions, or 11 cents extra per litre of gasoline.
Money generated from the output system for large emitters won’t go into the rebates fund for individuals and families, government officials said.