Canadian provinces and territories have been given a 2018 deadline to either invoke some form of carbon pricing or accept a federally imposed model. Earlier today, Catherine McKenna, Canada’s Minister of Environment and Climate Change, set out a five-year timetable to ratchet carbon polluting fees up to $50 per tonne by 2022.
“Pricing pollution is one of the most efficient ways to reduce greenhouse gas emissions and to stimulate innovation,” she said. “Already 80 per cent of Canadians live in a province where there is pollution pricing. We want to continue this trend and cover the final 20 per cent.”
Jurisdictions opting for a carbon levy, like those already in place or pending in British Columbia and Alberta, must launch it at a minimum threshold of $10 per tonne by 2018 and then increase it in increments of $10 per year. Adopters of cap-and-trade, as in Quebec and Ontario, will be required to reduce available emission allowances each year to ensure that the market floor price is, at least, equivalent to the stipulated direct carbon price.
As proposed, provinces and territories will retain all carbon pricing revenue collected within their boundaries and will have discretion to use it however they decide. The federal government has also pledged to review the carbon pricing approach in 2022, taking into consideration other countries’ actions.
Nevertheless, this does little appease Saskatchewan Premier Brad Wall, who claims the rollout of carbon pricing will cost his province more than $2.5 billion and damage the Canadian energy industry. “It’s not difficult to foresee an exodus of oil rigs south of the border and fewer people working in Saskatchewan’s already struggling oil and gas sector,” he predicts.
Supporters of the federal government’s move alternatively argue that collected revenue will be reinvested, not lost. “It will help the country’s environment and economy as we compete for the rapidly growing global demand for clean energy,” says the Pembina Institute’s Matt Horne.
Under the United Nations Framework Convention on Climate Change, Canada has committed to reduce national greenhouse gas emissions to 30 per cent below 2005 levels by 2030.
