Canada unveils carbon price, energy-producing provinces unhappy

Reuters — Canada’s federal government on Monday vowed to bring in a minimum price on carbon emissions by 2018, prompting one energy-producing province to threaten legal action and another to demand approval of an oil pipeline in return.

Liberal Prime Minister Justin Trudeau, who took power last November promising to do more to protect the environment, said carbon pollution would cost $10 a tonne in 2018, rising by $10 a year until it reaches $50 in 2022.

Trudeau said the 10 provinces — which have traditionally resented what they see as federal heavy-handedness — could either implement a carbon tax or a cap-and-trade market by then. Those that do neither will have a price imposed by Ottawa.

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Trudeau said his measures would help Canada meet greenhouse gas emission cuts agreed under the Paris climate change accords.

But official data show Canada has little chance of meeting its goals, in part because of booming emissions from the energy sector. Trudeau also blamed what he called inaction by the previous Conservative government.

“We’re not going to shun science and we’re not going to put off the inevitable,” Trudeau told parliament, saying a carbon price would improve Canadians’ health and spur investment in green businesses.

Energy-producing provinces were not impressed. Brad Wall, premier of Saskatchewan, accused Trudeau of betrayal and said he would consider legal action.

Alberta Premier Rachel Notley, usually a political ally of Trudeau, said she would “not be supporting this proposal absent serious concurrent progress on energy infrastructure.”

This was a reference to Kinder Morgan’s proposal to twin its Trans Mountain crude pipeline from the Alberta oil sands to the Pacific coast. Ottawa has until Dec. 19 to decide on the project, which is opposed by environmentalists.

Trudeau said provinces would keep the revenues they collected under the new program.

He spoke as federal Environment Minister Catherine McKenna met provincial counterparts to work on a carbon pricing deal. In a sign of protest, three ministers left early, and a scheduled final news conference was canceled.

Ontario, Quebec, British Columbia and Alberta, Canada’s four most populous provinces, either already have a price on carbon or are implementing one. Other provinces, including Manitoba, have committed to a pricing system.

Green groups were largely supportive, although Environmental Defence said Trudeau’s plan was not ambitious enough.

Renewable Industries Canada, whose members include Grain Farmers of Ontario and various Canadian ethanol and biodiesel makers, hailed the move, saying policies such as carbon pricing could encourage both production and consumption of “low-carbon” fuels and products.

“Today’s announcement is an important step forward, and sets the stage for complementary measures, such as increased renewable fuels mandates, that are critical to ensure transportation emission reductions in the near and longer term,” the group’s president Andrea Kent said Monday in a release.

Federal legislators are to vote this week on ratification of the Paris agreement to curb climate-warming emissions, a vote that the majority Liberal government is certain to win.

Reporting for Reuters by Alastair Sharp in Toronto and David Ljunggren in Ottawa; additional reporting by Andrea Hopkins in Ottawa. Includes files from AGCanada.com Network staff.

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