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Trudeau rolls out carbon tax of C$170 per metric ton by 2030
Gary Park for Petroleum News
Canadian Prime Minister Justin Trudeau has ended five years of promises, pledges and commitments, all lost in a mountain of stalling, by rolling out a climate change policy that will see the carbon tax soar from C$15 per metric ton today to C$170 by 2030.
The goal is to reduce greenhouse gas emissions to 30% below 2005 levels by 2030, a target the Trudeau government is lagging far behind.
“This plan for a healthy environment and a healthy economy was developed for the federal government,” Trudeau said, while his Environment Minister Jonathan Wilkinson said the C$170 goal has yet to be negotiated with the provinces and territories.
“We know that Canadians understand they can no longer be free to pollute anywhere in the country,” he said.
The tax is part of a C$15.2 billion plan to help fund development of hydrogen, electric vehicle infrastructure and incentives for existing industries to decarbonize their operations.
The announcement will be followed, likely before the end of 2020, with a Clean Fuel Standard that will stipulate that fuel providers and refiners must reduce their GHGs by 12% below 2016 levels by 2030, positioning Canada to drive innovation and attract investment.
Goal 30 million tons The goal for the CFS is a 30 million metric ton reduction in carbon emissions, helping put Canada on track to achieve its global climate goals.
On the carbon tax plan, the Canadian Association of Petroleum Producers said it was analyzing the announcement to “fully understand its implications” for the industry
It said new technologies and innovation “will play a major role in ensuring Canada can meet its domestic emissions reduction goals” while contributing to a lowering of global carbon output “by providing lower emission natural gas and oil to world markets.”
Tristan Goodman, president of the Explorers and Producers Association of Canada, said Trudeau’s Dec. 11 announcement will give his mid-sized member companies what they have been looking for - a timeline and price on carbon taxes.
He said that stability will allow the sector to “implement some green technologies,” but he expressed some unease about whether consumers will be able to absorb the higher costs.
Goodman said the exemption for natural gas, as well as other gaseous fuels, is “a wise, sensible decision” that will prevent natural gas prices from heading “significantly higher.”
Cost per family Trevor Tombe, an economist at the University of Calgary, said the C$170 tax will raise the cost of fuel taxes by 37.57 cents per liter over the next decade.
He said the tax hike would cost an Alberta family of four C$3,200 a year, which will be rebated through quarterly checks or a direct deposit to bank accounts.
Tombe said that if Alberta chose to create its own carbon tax it would be able to use the rebate money as it saw fit, including paying down its deficit.
Alberta Environment Minister Jason Nixon said that ratcheting up the federal carbon tax (currently C$30 per metric ton) is “another attack on Alberta’s economy and Alberta’s jurisdiction” over the use and taxation of its natural resources.
He said Alberta is already making headway on programs to reduce methane emissions and promote initiatives to develop hydrogen and capture carbon emissions.
The Supreme Court of Canada is expected to rule soon on a challenge by Alberta, Saskatchewan, Ontario and Newfoundland that argues the existing federal carbon tax is an “unconstitutional” overreach by the Trudeau government.
If the court rules against the federal government, Trudeau may be forced back to the drawing board on the climate plan.
- GARY PARK
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