Carbon tax could snag fishing industry
Federal study flags potential vulnerable area
OTTAWA • The federal government’s carbon tax could take a toll on Canada’s fishing industry, causing its competitiveness to “degrade relative to other nations,” according to an analysis from the Fisheries Department.
Ottawa’s plans to curb greenhouse-gas emissions, through carbon pricing and other measures, could also make some energy-intensive fishing techniques noncompetitive, according to a 2016 internal memo from the department obtained by the National Post through access-to-information laws.
While the memo says Canada’s fishing industry should be able to absorb the impact of a carbon tax without major economic impacts, it points out that “... Canada’s competitiveness may degrade relative to other nations that have not yet announced plans, or are proceeding more slowly toward measures to reduce GHG emissions.”
According to the analysis, the fishing sector would need to absorb annual fuel cost increases of 2.1 per cent, or $5.2 million, under a carbon price that increases by $10 per tonne annually to $50 per tonne in 2022. The commercial fishing sector would be hardest hit, it finds, as fuel costs account for more than nine per cent of production costs.
In the aquaculture and seafood processing industries, in contrast, fuel makes up just 1.6 per cent and 0.8 per cent of total costs, respectively.
The experience of British Columbia, where a carbon tax has been in place for a decade, suggests that the wider Canadian industry will be able to absorb the additional cost of carbon pricing, the analysis finds. “To date, the fishing industry in British Columbia has not raised the carbon tax as an area of specific concern,” it says.
But it also notes that several of Canada’s “main competitors,” including the U.S., Russia and most southeast Asian countries, are moving more slowly toward emissions-cutting measures. “This could have a negative impact on the competitiveness of Canada’s fishing industry.”
The memo concludes that short-term impacts are expected to be “low to moderate,” and the department will “continue to monitor developments.”
The analysis was completed in December 2016, shortly after most provinces and territories had signed Ottawa’s pan-Canadian climate change framework, committing them to a range of measures, including carbon pricing, to reduce Canada’s 2030 emissions to 30 per cent below 2005 levels.
Other measures in the framework, including reducing fossil fuels in electricity generation and improving energy efficiency, will “impose additional indirect costs on the Canadian economy, including the fishing industry,” according to the document.
The full impact of the panCanadian framework would therefore be “well in excess” of the additional $5.2 million per year in fuel costs from carbon pricing, the analysis finds. “The relatively rapid introduction of measures to reduce GHG emissions would allow little time for industry and consumers to adjust their behaviour, creating a substantial risk of economic disruption and uncertainty.”
For that reason, the analysis concludes, some energyintensive capture methods like bottom-trawling could become non-competitive, in favour of “less energy-intensive aquaculture production.”
Ottawa has said all jurisdictions that don’t have their own carbon pricing plans in place this year will have the federal carbon tax imposed on them in January 2019, starting at $20 per tonne and increasing to $50 per tonne in 2022.
The four largest provinces — Quebec, Ontario, Alberta and B.C. — already have some form of carbon pricing in place, though Ontario PC Leader Doug Ford and Alberta UCP Leader Jason Kenney have both vowed to scrap carbon prices if elected.
In Saskatchewan, the lone remaining province that refuses to sign the framework, Premier Scott Moe has asked the Court of Appeal to rule on whether the federal tax is constitutional.
In recent months, the federal Conservatives have criticized the Liberals for not revealing more information about the potential impacts of carbon pricing.
In late April, Environment and Climate Change Canada released a new analysis estimating that the federal carbon-pricing plan could cut carbon emissions by 80 to 90 million tonnes by 2022. That would result in a difference in the GDP of about $2 billion in 2022, or 0.1 per cent.
TO DATE, THE FISHING INDUSTRY IN B.C. HAS NOT RAISED THE CARBON TAX AS AN AREA OF SPECIFIC CONCERN.