Canadian provinces have until 2018 to adopt a carbon pricing mechanism, be it a carbon tax or carbon market, or the national government will do it for them, Prime Minister Justin Trudeau told the House of Commons on Monday morning. “If neither price nor cap-and-trade is in place by 2018, the government of Canada will implement a price in that jurisdiction,” Trudeau said in introducing a motion supporting the nation’s ratification of the Paris Agreement on climate change.
Under the new pan-Canadian carbon pricing plan, the national government will institute a minimum carbon price of $10 per metric ton in 2018. The price will increase $10 a year until it reaches $50 per metric ton in 2022, at which time it will be evaluated. “Provinces and territories will have a choice in how they implement this price: They can put a direct price on carbon pollution or they can adopt a cap and trade system, with the expectation that it be stringent enough to meet or exceed the federal benchmark,” Trudeau said.
The plan should help Canada reach its commitment under the Paris Agreement, which the nation is in the process of ratifying, to reduce its greenhouse gas emissions 30 percent below 2005 levels.
The accord is nearing entry into force, which will be triggered 30 days after ratification by 55 nations representing at least 55 percent of global greenhouse gas emissions. Currently, 62 nations accounting for 51.89 percent of emissions have ratified. The European Union and seven member states accounting for 4.57 percent of emissions are expected to ratify the agreement this week, triggering entry into force.
Fossil fuel dependent provinces, such as Saskatchewan, have resisted carbon pricing and responded to Monday’s announcement with disproval. “The level of disrespect shown by the Prime Minister and his government today is stunning,” Saskatchewan Premier Brad Wall said in a release, going on to suggest that the adoption of a carbon price will push his province’s businesses over the border. “The carbon tax will siphon over $2.5 billion from Saskatchewan’s economy when fully implemented and make our province a less competitive place to do business. For example, we have no idea what the U.S. government will do when it comes to carbon pricing. “
The federal government will not profit from the carbon price, Trudeau assured ministers. “Whatever approach is chosen, this policy will be revenue neutral for the federal government. All revenues generated under this system will stay in the province or territory where they are generated,” he said.
Trudeau’s announcement was welcomed by Canadian environmental groups, including Clean Energy Canada, which earlier Monday released polling showing national support for such an action. “A price on carbon pollution across Canada is a huge step forward and an essential component of a credible climate plan. It’s the kind of leadership Canadians want and expect from the federal government,” Merran Smith, executive director at Clean Energy Canada, said in a release.
According to the polling data, 59 percent of Canadians support carbon pricing, 36 percent oppose it, and 5 percent aren’t sure. Four Canadian provinces — British Columbia, Alberta, Ontario, and Quebec – already have carbon pricing or cap-and-trade systems in place, leaving Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island, and Saskatchewan to adopt pricing in the next year or so. “Because pollution crosses borders, all provinces must do their part,” Trudeau said.