It was off to a very poor start. To the surprise of many, on October 3, 2016, Justin Trudeau used the debate over ratification of the Paris Agreement to stand up in the House of Commons and announce a price on carbon.
The Prime Minister decided not to negotiate with the provinces. They have less than two years to adopt their own carbon pricing system, failing which Ottawa will impose a $10 per tonne tax that will gradually increase.
At the same time, in Montreal, environment ministers from the provinces and territories met with their federal representative, Catherine McKenna, to hear the news. And they were angry. Saskatchewan, Nova Scotia and Newfoundland and Labrador knocked on the door before the meeting ended.
Former Federal Environment Minister Catherine McKenna
Photo: The Canadian Press / Justin Tang
Their reaction was a precursor to the conflict between Ottawa and the provinces over the carbon tax.
Seven years later, most provinces are still not digested.
Three of them challenged the tax to the Supreme Court of Canada, unsuccessfully. Since January, Saskatchewan has stopped collecting residential gas for heating, breaking a federal law unprecedented in the country. Also, virtually all provinces where the federal tax applies are demanding that Ottawa halt the planned April 1 increase from $65 to $80 per tonne of carbon.
The future of carbon pricing in Canada has never looked more uncertain. Pierre Poilievre, leader of Canada's Conservative Party, promises to put an end to it. He makes it the central theme of his rallies, his attacks and his advertisements. According to him, while inflation is still climbing, the carbon tax increase Comes at a bad time
And only adds to the burden on Canadians.
In a letter he sent to Liberal and New Democrat MPs on Thursday, he encouraged them to vote next week in favor of a motion aimed at freezing the tax. If you've spent time in your communities, you've no doubt seen first-hand the tragedies Canadians face
He wrote to reassure them and at the same time urge them ask
their constituents.
To quell discontent across the Atlantic, the Liberal government itself created a loophole in its own legislation and banned heating oil for three years. However, this exception did not allow him to restore his image, while the polls did not favor the Liberals.
Justin Trudeau's Liberals are ahead of the Conservatives in voting intentions.
Photo: The Canadian Press / Adrian Wilde
Elimination, the easiest method
While conservatives often lead in voting intentions, the possibility that federal tariffs will eventually be eliminated looks more and more plausible. To do this, a new government would have to repeal the Greenhouse Gas Emissions Pricing Act adopted in 2018.
With a majority in the House of Commons, a government could eliminate the law entirely, notes Sébastien Jodoin, associate professor at McGill University's Faculty of Law. It is easy in a mechanical sense.
But the consequences will be significant, starting with the wallets of many citizens. Ottawa estimates that 80% of Canadians who pay taxes get a bigger refund from the federal government than they actually pay. If price fixing is abolished, they will have less money in their pockets.
The great irony is that the vast majority of Canadians in the provinces who pay federal taxes make money from it. [L’abolir] Will make Canadians poorer
Pierre-Olivier Pinault is Head of Energy Sector Management at HEC Montreal.
Impact on achieving goals
The effects will also be felt in Canada's greenhouse gas reduction record. However, the effect is not immediate. In the short term, there will be no major consequences; This line is very incomprehensible
Because it is modest, Mr. Pino points out. However, the impact will become more significant over time, as the tax should gradually increase to $170 per ton of carbon by 2030.
Ottawa also estimates that carbon pricing could cut the country's emissions by up to a third by 2030.
If we eliminate the carbon tax we will have to find other ways to achieve the goal. Paying taxes is not enough.
However, most economists agree that carbon pricing is the most effective and least expensive way to reduce carbon emissions. GHG rather than providing subsidies or taking regulatory action. Canada aims to reduce its emissions by 40% by 2030 compared to 2005 levels.
Uncertainty for businesses
As Canada embarks on an energy transition, companies embarking on this path also risk limiting their efforts.
This introduces a lot of uncertainty for all companies investing in developing low-carbon products, Mr. Jodoin says. Are we still with a vision of an economy based on exploitation of fossil fuels, exploitation of natural resources, or are we moving towards a modern economy?
Canadian exporters could also be affected by the repeal of carbon pricing. The EU – which has a carbon market – recently adopted a carbon cap adjustment mechanism. Ultimately, the mechanism would impose tariffs on carbon-intensive goods imported into Europe. Canada is no exception.
against the current
If carbon pricing is removed, Canada's image on the international stage could also suffer.
According to World Bank data, 23% of the planet's emissions are now covered by a carbon tax or emissions trading system (carbon stock market). This ratio was only 7% 10 years ago. No fewer than 46 countries have taken the plunge, and others are considering it, especially emerging countries like Vietnam and Turkey.
Carbon prices are rising internationally. Mr. Pino notes that it is becoming more prevalent in countries around the world. Abolishing it would go against the global trend and make Canada look somewhat backward when it comes to the fight against climate change.
Some Canadian provinces – including Quebec – have been pioneers in implementing carbon pricing in the country. While many states around the world see the virtues and Canada is following suit, the fate of carbon pricing ironically seems more uncertain here than ever.
Quebec in all this?
Since 2013, Quebec has established its own cap-and-trade system for greenhouse gas emission rights, which is now linked to California. The province is therefore not subject to federal taxation. At an auction last February, emissions rights sold for nearly $57 per ton of carbon. The government indicates that if Canada repeals the federal carbon tax, it will not change anything in Quebec's approach.
Regardless of the federal government's decisions, Quebec will continue its efforts in its fight against climate change. We encourage all states to contribute to efforts to combat climate change.
Amélie Moffett, spokeswoman for Quebec Environment Minister Benoît Charette, wrote in an email.
