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Trudeau government considers $15 a tonne national minimum carbon price

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The Trudeau government is considering setting a $15 a tonne national minimum carbon price by September.

The Globe and Mail reports, “Ottawa is aiming to work out a deal with the provinces over the next six months to set a national minimum carbon price of at least $15 per tonne. The government is looking to establish working groups, including one on carbon pricing, and wants agreement on a national strategy by September in its bid to curb greenhouse-gas emissions. The national plan would set a floor price for provinces that don’t have their own levy, with the expectation they would establish one in order to collect the revenue. The minimum price would increase each year.”

Currently in Canada:

  • British Columbia – has a $30 a tonne carbon tax

  • Alberta – has a $20 a tonne carbon tax which will increase to $30 in 2018

  • Ontario, Quebec – the two provinces are members of the Western Climate Initiative which has a minimum price of $15.84 a tonne, which will rise to $20 by 2020

  • Newfoundland and Labrador, Nova Scotia, New Brunswick, Prince Edward Island – are in various stages of rolling out carbon policies

  • Saskatchewan, Manitoba – have no carbon tax.

The newspaper adds, “Prime Minister Justin Trudeau will meet premiers in Vancouver on March 3 to discuss Canada’s climate challenge, fulfilling his promise to do so within 90 days of the Paris climate summit. However, Environment Minister Catherine McKenna made it clear last week that the government does not intend to finalize an agreement at that meeting. Instead, Ottawa and the provinces are looking to set up working groups that will assess specific sources of emissions – including buildings, the energy sector and transportation – to come up with the policies that would ultimately form a new plan and potentially more ambitious targets. Sources say the federal government wants to reach a deal within six months of that March summit.”

It also notes, “The $15-a-tonne levy is seen as a modest effort by environmentalists and economists, who argue it will take a much higher carbon price to meet Canada’s commitment to reduce greenhouse gases by 30 per cent from 2005 levels by 2030.”

On that front:

  • The Leap Manifesto calls for “a progressive carbon tax” along with an end to fossil fuel subsidies, financial transaction taxes, increased resource royalties, higher income taxes on corporations and wealthy people, and cuts to military spending.

  • Naomi Klein in her book ‘This Changes Everything’ writes, “A $50 tax per metric ton of CO2 emitted in developed countries would raise an estimated $450 billion annually, while a more modest $25 carbon tax would still yield $250 billion a year…”

  • The Canadian Centre for Policy Alternatives’ ‘Alternative Federal Budget’ calls for a $30 a tonne national harmonized carbon tax.

  • The Green Budget Coalition (which has 16 members including West Coast Environmental Law, Ecojustice, Greenpeace, Friends of the Earth and the David Suzuki Foundation) calls for a carbon tax that would reach $50 a tonne by 2020.

  • Environmental economist Dave Sawyer says a carbon tax rising to $180 a tonne in 2030 would be required to meet Canada’s current carbon emission reduction target.

Earlier this month, the Globe and Mail editorial board commented, “Decisions by some provinces to put a price on carbon, through taxes or a cap-and-trade system, should slow the increase in GHG emissions. Higher oil prices that reduce consumption might also help. But to produce the kind of sharp drop needed between now and 2030, Canada will have to amputate, not nip and tuck.”

The Council of Canadians has argued that the Energy East and Trans Mountain pipelines – and the massive expansion of the tar sands that those projects would facilitate – are key obstacles that would prevent Canada from meeting the 1.5 degree Celsius target the Trudeau government agreed to at the Paris climate talks in Dec. 2015.

Further reading
Council of Canadians calls on first ministers to “leap” at March 3 summit in Vancouver (Feb. 11, 2016)