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Ottawa to unveil carbon plan for hold out provinces today

October 23, 2018  

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Ottawa is about to impose a carbon tax on provinces that have balked at implementing their own, doubling down on what is set to be a core fight of the next federal election.

Prime Minister Justin Trudeau and his environment minister is in Toronto today to unveil details of their carbon “backstop,” in the same province whose newly elected government recently canceled a cap-and-trade system, according to Bloomberg News.

Trudeau has long pledged a national carbon price that would give provinces leeway to design their own system while threatening to force it on holdouts.

The plan will apply to Ontario, Saskatchewan, Manitoba and New Brunswick and take effect on April 1, a Canadian government official said Monday, speaking on condition of anonymity to Bloomberg News. Money raised, including from industrial emitters, will be rebated to individuals in each province directly, the official said. Trudeau has scheduled an announcement this morning in Toronto, with his finance and environment ministers, though the government hasn’t confirmed the topic.

The file is sure to be a central battleground of Canada’s next federal election one year from now. Trudeau faces growing opposition, particularly among the country’s conservative parties, to any carbon tax or cap-and-trade system. Ontario’s new government, led by Premier Doug Ford, is one of a handful of provinces challenging Trudeau’s move in court.

Trudeau is expected to say the move is an essential tool to fight climate change. His government will also send cash rebates directly to voters, arriving in the months before an election.

All four provinces where the plan is to be imposed are either governed by conservatives, or may soon be. Other provinces, such as British Columbia, have introduced their own plans that meet the federal standard.

“A carbon tax is not an environmental plan. It is a revenue plan,” federal Conservative Leader Andrew Scheer said over the weekend, during a campaign-style speech to supporters. He’d kill the carbon backstop if elected next year. “It is a tax no matter what they try to call it, and we will scrap it.”

The plan, however, will probably win support from environmentalists, one pillar of support among the broad base of Trudeau’s centre-left Liberal government. Trudeau’s lawmakers have demanded Scheer release a climate plan.

“This is a smart move on the part of the Trudeau government to keep climate action going at the national level and make it clear that you don’t get to sit out this fight,” Keith Stewart, a senior energy strategist with Greenpeace Canada, said in an interview with Bloomberg News. A key detail will be how the money is divided — and whether all will be sent to individuals, he said. “I’m hoping there will still be support for things like public transit and greening our energy system.”

The fate of emissions policy in Canada’s heaviest emitter, Alberta, remains unclear — Premier Rachel Notley has implemented her own climate plan, but polls show she could lose power in the oil-producing province next year. Her top rival has joined with Ontario’s premier in criticizing Trudeau’s plan.

(Bloomberg News)

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