Federal document outlines Sask. concerns
Heavily-redacted federal documents released to the Leader-Post summarizes that there is a broad consensus that carbon pricing should be a central component of any policy addressing climate change.
But Saskatchewan’s finance minister says the document supports some of the concerns over carbon pricing raised by the province. Dated May 18, 2016, one document titled Carbon Pricing in Theory and in Practice, prepared by the federal Department of Finance, explores carbon pricing to regulation policies on climate change, as well as a comparison of planned provincial carbon pricing actions. Saskatchewan is strongly opposed to carbon pricing and has spoken out against the federal government’s plan to impose a tax.
Environment Minister Scott Moe says the federal documents support some of the concerns raised by the province.
“These documents, to me, actually further support the concerns we have about the effectiveness of a carbon tax when it comes to reducing emissions and the effectiveness of a carbon tax when it comes to the impact on the economy, and I don’t think we know that,” says Moe.
He points to one paragraph exploring different carbon pricing strategies that reads, “because of the tax, a manufacturing firm would pay higher price for energy derived from burning fossil fuels. In turn, this firm would increase the price of its goods to reflect higher input costs for energy obtained from carbon. The tax would cascade throughout the economy and prices would increase most for goods that make intensive use of carbon-based energy. There would be a broad incentive to substitute away from carbon in the whole economy.”
Moe says that Saskatchewan is a heavy exporter of goods and is competing with other jurisdictions for businesses. He says documents such as these, especially when heavily-redacted, heighten people’s concerns “with respect to what impact (a carbon tax) is going to have on emissions.”
In a statement, the federal Department of Finance says the documents were “to brief the federal minister of finance on the economic theory underlying carbon pricing as well as potential approaches to carbon pricing in the Canadian context.”
A working group report exploring carbon pricing was completed a few months after the dates listed on the document. The federal government said the document was “not intended and were not used to inform the working group report on carbon pricing mechanisms. The working group report was based on the collaborative efforts of federal, provincial and territorial officials.”