Ottawa’s plan on shaky ground
In announcing a plan to implement a national carbon price Thursday, Prime Minister Justin Trudeau took another step toward his grand bargain — carbon pricing for pipeline approvals.
When he first proposed the controversial trade-off, Trudeau could count on like-minded governments in Alberta and British Columbia to play along with his federal intrusion in provincially owned resources by putting them on a strict carbon diet.
Today that bargain is on shaky ground as political priorities in the West shift and harden in opposite directions.
In B.C., a new left-leaning government could replace the Liberals and spike the Trans Mountain pipeline expansion, while giving short shrift to Alberta’s — and Ottawa’s — carbon policies.
The worst-case scenario for Ottawa would be an NDP minority government with the Greens holding the balance of power. They would push for more aggressive carbon reduction and show no mercy for pipelines — or any other resource project.
Alberta could be moving the other way. The right-ofcentre PC and Wildrose parties announced Thursday they are reuniting to form the United Conservative Party after a decade apart, increasing the likelihood they will put the boot to the NDP in the next election and toss out Alberta’s climate change agenda.
If the Trans Mountain expansion dies in B.C., the new Alberta front would be even more motivated to be difficult on carbon policy and maybe even join Saskatchewan in taking the feds to court.
Details of the national plan, made public Thursday by Environment Minister Catherine McKenna, are part of the Pan Canadian Framework for Clean Growth and Climate Change, which aims to get Canada to cut its emissions to 30 per cent below 2005 levels by 2030.
The technical paper says Ottawa will impose its own model in provinces that choose not to have their own system in place by 2018.
The provinces would have three options: legislate their own levy on emissions starting at $10 a tonne, legislate their own cap-and-trade system which can show it will produce equivalent cuts in emissions as a carbon tax, or use a hybrid model largely based on Alberta’s program which Ottawa will impose itself.
The carbon tax, or cap-andtrade equivalent, will start at $10 a tonne and go up by $10 a year to $50 a tonne by the end of 2022.
Ottawa has pledged to return any revenue to provinces, though it has yet to determine whether the funds will go to provincial governments or directly to citizens and businesses.
The carbon price comes despite warnings by the oil and gas sector that it would put it at further competitive disadvantage against U.S. competitors that are benefiting from President Donald Trump’s tax and regulation cuts.
Saskatchewan Premier Brad Wall has been the loudest vocal opponent so far. On Thursday, he called the federal proposal “a ransom note” and confirmed he will go to court.
Saskatchewan’s economy would be hit hard by the carbon levy because its main industries — such as agriculture and oil and gas — are carbon intensive, he argued.
He said his province has invested large amounts of money on carbon capture and storage, but isn’t getting credit for that in the federal plan.
Meanwhile, Manitoba plans to come up with its own climate change strategy this year, but hasn’t committed yet to including a price on carbon.
McKenna plans to introduce legislation on the national carbon plan in the fall.
She may want to hold off until construction of Trans Mountain is well under way, with the full support and protection of her government, to demonstrate Trudeau is delivering on the full bargain.