Carbon pricing comes to Ontario; feds object

YorkRegion.com
April 13, 2015
By Allison Jones and Bruce Cheadle, The Canadian Press

Three quarters of Canada's 35 million citizens will soon live in jurisdictions with a price on carbon after Ontario announced Monday it is joining Quebec and California in a cap-and-trade system the federal government lampoons as a "job-killing carbon tax."

Ontario Premier Kathleen Wynne and Quebec's Philippe Couillard signed off on the carbon trading market in Quebec City after Wynne had earlier announced the initiative in Toronto. They join B.C. and Alberta as carbon-pricing provinces.

"Call it carbon pricing, cap and trade, a market mechanism or - I believe it's misleading - but if you must, go ahead and call it a tax," Wynne said in Toronto.

"Most of us will not be fooled because for most of us the label is not important. What's important is that we make progress."

The move upstages Tuesday's meeting in Quebec City of provincial and territorial leaders, who agreed last year to plot out a national strategy on energy and climate policy in the absence of federal leadership.

A report last week from a blue-chip panel of economists asserted carbon pricing is the most efficient and effective way to meet Canada's carbon-reduction goals - and that provincial governments were best situated to design their own programs.

The Conservative government, which ran on a platform in 2008 that included a cap-and-trade policy, nonetheless maintains any effort to price carbon is an economy killer.

"We oppose carbon taxes and any schemes that seek to raise revenue - either directly or indirectly - from hardworking Canadians," a spokesman for Environment Minister Leona Aglukkaq said in an email.

Ted Laking did not directly criticize the provinces, but instead aimed his fire at Liberal Leader Justin Trudeau, who has promised to give the provinces free reign to design their own programs while imposing national carbon-cutting targets.

The Conservatives have promised to regulate emissions on a sector-by-sector basis, but have refused to address the oil and gas industry that Environment Canada projections show will drive up Canada's overall emissions.

Liberal environment critic John McKay described the Conservative climate stance as "juvenile drivel."

"The vast majority of Canadians have simply moved on from what is a profoundly unserious government," McKay said in an interview.

Federal-provincial tensions were clear on the eve of Tuesday's summit of provincial and territorial leaders.

"My hope is that at some point the federal government will work on a process that will support what the provinces are doing," Wynne said in Quebec City, flanked by Couillard.

"I believe that having a federal partner who is not standing on the sidelines but is engaged in the discussion will help, and so I look forward to that."

Couillard said climate action will likely be a theme in this year's federal election campaign, adding it is incumbent on an oil-producing nation like Canada to act.

Canada, he said, "should be one of the most proactive countries in the world in the fight against climate change."

The provinces and territories have built a sense of momentum after years of policy gridlock, although the absence of campaigning Alberta Premier Jim Prentice at this week's meeting is a temporary setback.

"Cap and trade is not something that I support or that I think is in the best interests of Alberta," Prentice said at a campaign stop in Calgary.

However, he said he's discussed the matter with the premiers of both provinces and Alberta will continue to be a "constructive ally" working with his provincial counterparts in terms of climate change.

The hard details of the Ontario plan remain to be seen, and felt. Wynne said specifics will come in the next six months.

Estimates from Quebec and California peg increased gasoline costs between two and 3.5 cents per litre - which Wynne characterized as "small" potential increases.

British Columbia has a carbon tax that includes a seven-cent-a-litre levy on gasoline. Alberta's version of carbon pricing requires large industrial emitters to reduce their carbon intensity by 12 per cent relative to their baseline level, although it covers only a small percentage of the province's emissions and its penalties are minuscule.

Under a cap-and-trade system, businesses will have a greenhouse gas quota and be able to sell credits to reward efficiency and innovation, Wynne said. Companies that want to emit more carbon can buy credits from those who are able to reduce their carbon footprint. Money raised through the system will be reinvested in green technology and green infrastructure, the premier said.

Ontario's Progressive Conservatives are skeptical that funds from what they're calling a "tax on everything" will be diverted to general revenues in a province struggling to eliminate a $10.9-billion deficit.

Right now companies are allowed to spew pollutants into the atmosphere for free, but everyone is paying the costs, Wynne said.