Prime Minister Justin Trudeau put Canada’s premiers, meeting this week in Whitehorse, on notice that if they fail to put a price on carbon emissions that has traction across the entire nation, his government is ready to impose one.
Speaking to CBC News, Trudeau called a price on carbon an “essential element” of Canada’s plan for meeting its climate commitments. “We’re going to make sure there is a strong price on carbon right across the country, and we’re hoping that the provinces are going to be able to do that in a way for themselves,” he told the network’s Rosemary Barton.
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However, if the provinces fail to meet that standard, Trudeau left open the possibility of federal action to ensure that carbon is priced effectively across the national economy.
His comments didn’t mention, but were clearly directed at, Saskatchewan Premier Brad Wall, who vociferously opposes any carbon price. Other leaders in the northern territories and Atlantic Canada have also resisted the call for a national carbon price. In an interview from Whitehorse with CBC’s Power and Politics, Wall said he had instructed provincial government lawyers to begin preparing for a constitutional challenge against elements of a unilateral federal program, on the basis that governments in Canada don’t tax other governments.
“We would constitutionally challenge any attempt by a federal government to impose a tax on, for example, a government Crown [corporation] like SaskPower or SaskEnergy,” Wall said. “This does not come into play with the private sector, but it does with respect to government entities, we believe. And we would challenge it.”
For its part, the opposition Conservative Party of Canada, which fulminated while in office against what it called a “job-killing carbon tax,” renewed that attack in messages to supporters. The missives claimed the Trudeau government was about to impose “a big new tax on everything.”
Other voices were more supportive of the Prime Minister’s resolve, however. In a commentary, Bloomberg advised Canada to “set a national minimum price for carbon that is high enough to spur meaningful reductions”—suggesting that a price that escalated to as much as US$160 per ton by 2030 might be sufficient.
Trudeau’s remarks left unspecified what sort of mechanism his government might adopt to ensure that all Canadians pay a price for carbon emissions. Last month, the Globe and Mail reported that federal finance officials were “looking at a number of options” for a stand-alone pricing mechanism, including an increase in Ottawa’s existing 10¢-per-litre excise tax on gasoline and 4¢-per-litre tax on diesel.
But with carbon taxes or cap-and-trade policies already establishing a de-facto price on carbon emissions in the country’s four biggest provincial economies—Ontario, Quebec, British Columbia, and Alberta—it is highly unlikely the federal government would impose a scheme that competed with or duplicated those measures.
More likely is a backstop mechanism to prevent laggard provinces from simply avoiding any price at all, while ensuring that independent approaches pursued by individual provinces achieve what Environment Minister Catherine McKenna described recently as a “uniform” national price.
“That’s not as easy as it sounds,” Bloomberg warned. To ensure that provincial policies achieve an effective national price, the outlet observes, “the federal government needs a transparent standard for comparing the effective price on carbon in each province.”
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