Trudeau Liberals scale back carbon tax

Jan Cross
August 5, 2018

The government says other sectors may see adjustments to their greenhouse gas output measures, depending on further review of the impact of carbon pricing on their domestic and global competitiveness, with revised draft standards expected by fall.

"Our two provinces are united in the belief that a federal carbon tax is an ineffective policy that will not significantly reduce emissions and will instead make life unaffordable for families, and that it is unconstitutional for the federal government to impose a carbon tax on certain provinces based on their evaluation of provincial climate change policies", the statement read.

They said the constitutional challenge is in addition to Premier Doug Ford's decision to join a similar legal battle launched by the government of Saskatchewan. We want to have the most energy efficient, smart industries here that create good jobs, at the same time do what we need to do to tackle emissions.

The Ford government greeted Ottawa's move to scale back a federally mandated carbon tax as a victory for the Premier.

In late July, Mr. Ford's Progressive Conservatives tabled legislation to kill the cap-and-trade program introduced by the previous Liberal government.

Keith Stewart of Greenpeace decried what he called "a step back" and said Canada could not claim to be a leader on fighting climate change if it were not prepared to take significant steps to reduce greenhouse gas emissions.

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"Cancel your carbon tax", he said.

The federal carbon pricing system will apply on January 1, 2019 in each province or territory that requests it, and in any jurisdiction that does not have a carbon pricing system that meets the federal benchmark, officials said.

"We are a prime candidate for carbon leakage ... you just pack up your business and go to someplace that doesn't have a carbon tax and you continue to produce vehicles".

Prince Edward Island and New Brunswick both have put forward carbon-reduction plans that do not include a new price on carbon and therefore, are unlikely to meet the federal threshold. He says taxing 10 or 20 per cent of carbon emissions will likely lower emissions at the same rate while lowering the costs for businesses. "There's still so many things to be determined". The industry feels "a certain amount of frustration", said Tim McMillan, president of the Canadian Association of Petroleum Producers.

"These are ... costs that we would incur in Canada but our competing plants in the United States would not", he said by phone, noting that 93 percent of Canadian auto production was exported to the United States.

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