Environment minister pushes for carbon pricing despite worries it could ‘kneecap’ energy sector

nationalpost.com
Feb. 19, 2016
By Jason Fekete

Environment Minister Catherine McKenna says the Liberal government has not yet determined a minimum national carbon price for its climate strategy - insisting first ministers will discuss it in the coming months - and rejects assertions the current economic environment is not the time to pursue CO2 pricing.

McKenna and the government are under fire for plans to introduce a minimum national carbon price as tens of thousands of workers in the energy sector are losing jobs.

Saskatchewan Premier Brad Wall says the energy sector is hurting and Canada’s economy as a whole is struggling, so introducing a national carbon tax or provincial carbon levy at this time would “kneecap” the oil and gas sector.

It is quickly turning into a high-stakes political and economic showdown between Saskatchewan and the federal government.

McKenna stressed Friday that the government is not locked into a Canada-wide minimum carbon price - despite reports the floor will be $15 per tonne - and said that discussions with the provinces and territories are in their infancy.

“We need to figure out what it’s going to look like, how we’re going to move forward on this because there are different systems. But we haven’t prejudged this. We have not set a price,” McKenna said Friday in a meeting with the Ottawa Citizen editorial board.

“That’s going to be part of the conversation that’s going to start at the first ministers meeting.”

McKenna said she disagrees with Wall over timing on establishing a national carbon price, arguing the country shouldn’t wait any longer. The world is moving toward clean energy and greener economies, and Canada can’t afford to miss out, she said.

“This is the way we are going, and, in fact, I see it as the opposite (of Wall). This is the opportunity to move to a lower-carbon economy, to create new jobs, to foster innovation,” she said.

“The challenge right now for Saskatchewan, and Alberta and for Newfoundland and Labrador, which I’m not at all diminishing, is the low commodity prices,” she added.

“Because we have a price on carbon, that doesn’t address the low commodity prices. What we’re trying to do is create the right incentives so that we tackle climate change, reduce emissions, but also foster innovation in natural resource development, but also in renewables.”

Trudeau and Canada’s premiers will discuss the federal strategy at a first ministers meeting in Vancouver on March 3.

McKenna said Trudeau and the premiers will create “work streams” for developing the national climate strategy, including one on carbon pricing, and that officials will report back to first ministers within six months to “show a clear path to reducing emissions.”

But Wall is rejecting the federal government’s plans for a national carbon price, as are Conservative MPs from Saskatchewan who grilled McKenna on Friday in the House of Commons. Wall believes a media report of a $15-per-tonne carbon price is a trial balloon by the government.

“The last thing we need right now is a tax increase, or a new federal carbon tax or, frankly, a provincial carbon levy. Now is not the right time for any of those things,” Wall said Friday in Regina.

“This is not right for Saskatchewan, and may I say I don’t think it’s right for the country right now. The country’s economy is not as strong as anyone would like it, and I just don’t think now is the time for a carbon levy.”

There will also be risks to Canadian jobs with any sort of initiative like this and I think we should know that as Canadians before anything is imposed.

The Saskatchewan premier has promised no new taxes heading into an April 4 election. He’s calling for an economic impact analysis to be conducted before the federal government proceeds with a pan-Canadian climate strategy and national carbon price.

“There will also be risks to Canadian jobs with any sort of initiative like this and I think we should know that as Canadians before anything is imposed,” he said.

The Liberal government has promised a pan-Canadian climate-change strategy that will set national emissions-reduction targets and introduce a price on carbon. Provinces would be given flexibility to design their own carbon policies and collect the associated revenue under a broader national framework.

Ontario Environment Minister Glen Murray said Friday that the global move to carbon pricing will become a growing problem for jurisdictions outside the market, and he’s made that case directly to his Saskatchewan counterpart Herb Cox.

“Carbon pricing is the reality of this century and people who don’t realize that aren’t dealing with the reality of it,” said Murray.

Wall, however, said Ontario should stay out of Saskatchewan’s business. The Saskatchewan government doesn’t want a level playing field with other provinces when it comes to carbon pricing, he said, because it wants to maintain a competitive economic advantage over other jurisdictions.