Flag of Canada projected on to a curtain of water in Ottawa in 2012.

Flag of Canada projected on to a curtain of water in Ottawa in 2012.

Jamie McCaffrey/Flickr (CC BY-2.0)

In a dramatic move, Trudeau says Canada will put a price on carbon

Having campaigned on a promise to reduce Canada’s carbon footprint, Prime Minister Justin Trudeau today took a step toward that goal by announcing that his government will impose a pan-Canadian price on carbon, even if that means he must trample on reluctant provincial governments. But some critics say Trudeau’s move doesn’t go far enough, and three top provincial environment ministers protested the decision by walking out of a high-level meeting today.

With federal, provincial, and territorial environment ministers meeting in Montreal, Canada, to hammer out a national carbon reduction plan, Trudeau dropped a bombshell on their negotiations. He announced to the House of Commons that Ottawa will impose a $7.62 per metric ton minimum tax on carbon commencing in 2018, which will rise by $7.62 each year until it reaches $38.11 per metric ton in 2022.

So far, several Canadian provinces and territories have decided how they are going to achieve their share of Canada’s overall carbon emissions reduction goal. British Columbia and Alberta have already introduced modest carbon taxes; Ontario and Quebec have embryonic cap-and-trade systems that allow polluters to buy and sell a limited number of emissions permits. Now, with Trudeau’s announcement, provinces and territories that don’t pick an approach will suffer the indignity of having the federal government impose a tax within their jurisdictions. But all revenues generated through such taxes will be returned to those recalcitrant provinces, Trudeau said.

A provincial approach must be “stringent enough to meet or exceed the federal benchmark,” Trudeau told the House of Commons as his government introduced a motion to ratify this past December’s Paris agreement to limit carbon emissions, as well as a related agreement within Canada. “Because pollution crosses borders, all provinces must do their part,” Trudeau said. “If one lives in Canada’s north or in our coastal communities, or really in any community that is subject to extreme weather conditions, and the resulting floods, droughts, and wildfires, the effects of climate change itself, cannot be denied. There is no hiding from climate change. It is real, and it is everywhere.”

Environmentalists, led by Green Party leader Elizabeth May, argued that the federal approach was too modest, with May taking to Twitter to declare the government’s initial price on carbon as “too low to be taken seriously.” Catherine Abreu, executive director of Climate Action Network Canada in Ottawa, said in a statement that carbon pricing alone isn’t an adequate Canadian response to global warming. “Only a plan that combines carbon pricing with ambitious regulations in every sector of the economy will result in emissions reductions deep enough to reach our current climate targets and put Canada on a path to exceeding those targets.”

New Democrat environment critic Linda Duncan told the House of Commons that the Trudeau government was essentially endorsing a carbon emissions target that had once been ballyhooed by the predecessor Conservative government, but that the Liberals had described during last year’s federal election as “inadequate, weak, and catastrophic.”

Provincial reaction ranged from tacit approval to outrage. Three environment ministers—Nova Scotia’s Margaret Miller, Newfoundland & Labrador’s Perry Trimper, and Saskatchewan’s Scott Moe—walked out of today’s ministerial meetings to protest Trudeau’s announcement.

Meanwhile, Ontario environment minister Glen Murray and Quebec environment minister David Huertel offered qualified support, with Murray telling reporters that “it’s like all things federal: We’re making sausages in public. It's a pretty ugly process, but it’s moving well.” Huertel told Canadian Press in the run-up to the gathering of environment ministers that “a national carbon tax hurts existing systems like cap-and-trade. … And also it does not respect provincial jurisdictions.” But the latitude to use a cap-and-trade system within its borders will apparently assuage any jurisdictional objections Quebec might have. Quebec’s current plan would yield a projected $12.50 per metric ton price on carbon, rising to $13.72 per metric ton by 2020. Ontario’s plan is projected to introduce an equivalent price of $14.79 per metric ton by 2020.

British Columbia now has a carbon price of $22.87 per metric ton, which translates into a $.0508 per liter tax on gasoline, diesel, propane, or aviation fuels. Alberta will introduce a $15.25 per metric ton tax on 1 January 2017 (rising to $22.87 by 2018), but Premier Rachel Notley said in a statement that although the province supports the notion of national carbon pricing, it “will not be supporting this proposal absent serious concurrent progress on energy infrastructure, to ensure we have the economic means to fund these policies.” In short, Trudeau must deliver on permits to build pipelines that move crude from the Alberta oilsands to the coast before the province falls in line.

Saskatchewan Premier Brad Wall forecast an exodus of oil rigs to the United States and a $1.91 billion impact on the province’s economy. “The level of disrespect shown by the prime minister and his government today is stunning,” said Wall in a statement, adding that the province will “investigate ‘all options’ to mitigate the impact.” Saskatchewan and the three Canadian territories have steadfastly opposed all manner of carbon pricing.

Trudeau indicated he would meet with provincial and territorial ministers in December to finalize his pan-Canadian carbon pricing plan.