The federal government is imposing its fuel charge, commonly called a carbon tax, on consumers in Nova Scotia, Prince Edward Island and Newfoundland and Labrador.
Environment and Climate Change Minister Steven Guilbeault said Tuesday that while Ottawa will begin imposing its federal carbon support on those provinces, it won’t kick in until Canada Day, long after it has passed the winter.
“We’re in a federation and we have to be able to take into account the different regional realities of the country. And that’s exactly what we’ve done with our system,” Guilbeault said.
“What we’re trying to do is create more equity across the board and ensure that what each jurisdiction is doing, whether they have their own system or use the federal system, is equivalent and exceeds a federal benchmark.”
Provincial carbon pricing plans submitted to the federal government by Nova Scotia, Prince Edward Island and Newfoundland and Labrador were deemed to fall short of the federal benchmark for emissions reductions.
These three provinces will join Alberta, Saskatchewan, Manitoba and Ontario in federal support. New Brunswick, Quebec, the Northwest Territories and BC will continue to oversee their own carbon pricing systems.
The federal price goes into effect July 1, and consumer rebates, the federal government’s Climate Action Incentive Payments (CAIP), are expected to arrive within weeks.
CAIP quarterly payments usually come in January, April, July and October, part of the federal government’s plan to return 90 percent of the money it collects through the carbon tax.
Federal officials briefed on the background said the July payment will be $248 for Nova Scotia residents, $240 for PEI residents and $328 for Newfoundland and Labrador residents. Payments for the same amounts will also be issued in October and January 2024.
Difficult negotiations
The federal carbon pricing system is divided into the fuel charge, which affects consumers, and the output-based pricing system, which determines the cost of emissions from the industrial sector.
Guilbeault also announced Tuesday that the federal government has accepted Saskatchewan’s proposal to put a price on its industrial emissions.
It means Saskatchewan joins Alberta, BC, New Brunswick, Newfoundland, the Northwest Territories, Nova Scotia, Ontario and Quebec in running their own industrial carbon pricing system. The federal government’s industrial carbon pricing system will remain in place in Manitoba, PEI, Yukon and Nunavut.
Guilbeault said that while negotiating industrial emissions was “easier” with most provinces, including Alberta and Saskatchewan, that was not the case in discussions with Nova Scotia Premier Tim Houston . Guilbeault said those conversations were full of “theatre and drama.”
A Greenfoot Energy worker is shown installing a heat pump in PEI this fall. (Shane Hennessey/CBC)
“I must confess that the discussions with Nova Scotia have been interesting,” Guilbeault said. “All this drama could have been avoided. I guess they wanted the drama, they were looking for it.”
Guilbeault said that while unpopular in Alberta and Saskatchewan, negotiating with those provinces was free of drama and tension. He suggested that while Houston is a Progressive Conservative, the Prime Minister and the Environment Minister should not have “the same definition of what progressive means”.
Guilbeault also said he’s not sure why negotiating industrial emissions has been so much easier than negotiating a price for consumer emissions.
“I’m not sure why some provinces choose to agree that we should put a price on pollution for industrial users, but we shouldn’t put a price on the fuel we use in our everyday lives.” he said.
$5,000 heat pump grant
After the carbon price announcement, Houston issued a statement saying he is disappointed that federal support is being applied to his province.
“Let me be clear: Nova Scotia supports action on climate change, but does not support a carbon tax of any amount on home heating oil at this time,” he said.
“The courts have ruled that the federal government has jurisdiction to impose the carbon tax. We don’t dispute that. But the courts didn’t say the federal government is obligated to impose it.”
Tuesday’s announcement comes a day after the federal government announced it an initial grant of up to $5,000 to help low- and middle-income households switch from oil furnaces to heat pumps.
The carbon price currently stands at $50 per tonne of emissions; it is expected to increase to $65 per ton in 2023 before reaching $170 per ton in 2030.
In principle, carbon prices influence the total costs of increased greenhouse gas emissions: wildfires, heat waves, droughts, and property loss from flooding. By attaching these costs to burning fossil fuels, governments hope that over time it will be easier and cheaper for businesses and consumers to choose low-carbon options.
The Liberal government says pricing carbon is the most efficient way to put a price on pollution and spur clean innovation.
According to the World Bank, 68 national or subnational carbon prices The initiatives cover nearly 20% of global emissions.
While the Canadian government will impose its carbon price on these three Atlantic provinces, Guilbeault is expected to announce that Saskatchewan’s big emitters will no longer be subject to the federal government’s system. Ottawa has accepted Saskatchewan’s production-based pricing system.