As provincial environment ministers were meeting in Montreal Monday to work out a carbon-pricing agreement with federal Environment Minister Catherine McKenna, Prime Minister Justin Trudeau dropped a bombshell in the House of Commons.
Provinces and territories will implement carbon pricing by 2018 or the federal government will do it for them, he said.
But it’s a rather mild bombshell. Trudeau is timidly going where B.C. has already boldly gone.
In announcing his plan to reduce greenhouse-gas emissions, Trudeau said the federal government will impose a countrywide floor price on carbon pollution, starting at $10 a tonne in 2018 and rising $10 a tonne per year until it hits $50 a tonne in 2022.
Provinces will have two options: Impose a direct tax on carbon that meets or exceeds the national price, or implement a cap-and-trade system, which is what Ontario and Quebec are planning to do. The federal government will impose carbon pricing on jurisdictions that have not implemented one of those two options by 2018.
The announcement caused some consternation among the provincial environment ministers, given that they had come together to work out an agreement.
“The air was sucked out of the room,” said Currie Dixon, the minister from Yukon.
“Many westerners will see this as ‘National Energy Program 2.0,’ ” said Saskatchewan’s Scott Moe.
If he looked farther west than Saskatchewan, Moe might be less alarmed.
While other jurisdictions have been making vague and unrealized promises about reducing greenhouse-gas emissions, B.C. has walked the talk. When the carbon tax was implemented on all forms of fossil fuels in 2008, it was set at $10 a tonne for greenhouse-gas emissions. That added 2.4 cents to a litre of gasoline. The tax was increased annually, rising to $30 a tonne — about seven cents for a litre of gasoline — in 2012, when the rate was frozen.
Moe’s concerns about the NEP, in operation from 1980 to 1985, are groundless — that was an attempt by the Pierre Trudeau government to gain control over Canada’s petroleum supplies and to redistribute Alberta’s oil wealth. It’s no wonder that critics called it a cash grab.
When the Gordon Campbell government made the carbon tax law, it promised it would be revenue-neutral, not the cash grab some feared. And that promise has been kept — the tax has been more than offset by cuts in other taxes.
Even if the federal government imposes carbon pricing on a province or territory, Justin Trudeau has promised the revenues collected will stay in that jurisdiction.
The evidence indicates that B.C.’s carbon tax has been effective. Fossil-fuel use in this province declined by 14 per cent between 2008 and 2014, even as it rose three per cent in the rest of Canada.
B.C. has proved that environmental measures can be good for the economy, earning praise from such entities as the Organization for Economic Co-operation and Development, the World Bank and the Economist.
“There is no hiding from climate change,” the prime minister told the Commons Monday. “It is real and it is everywhere.”
Climate change can seem an overwhelming issue: Yes, it’s a major problem, but what can one person do about it? When you pay the carbon tax at the pump or on your natural-gas bill, you’re doing something about it. You can choose to burn less fuel. It’s a regular reminder to be alert for ways to reduce greenhouse-gas emissions.
Trudeau’s announcement has raised understandable reactions from those concerned about more taxes, but if done right, with corresponding reductions in other taxes, a carbon tax can work, as B.C.’s experience has shown.
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