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Edging toward climate deal, but Trudeau not setting carbon price
It started out with a veiled threat by the Canadian government to impose a unilateral, nationwide carbon tax and ended with a whimper when Prime Minister Justin Trudeau and the premiers of 10 provinces and three territories gave themselves another six months to work out a deal.
For now, the so-called Vancouver Declaration leaves no doubt Trudeau was forced to settle for something short of his objective.
The end result was a compromise with a fractured and fractious band of premiers to support “carbon pricing mechanisms adapted to each province’s and territory’s specific circumstances.”
The objective is now to introduce a pan-Canadian policy plan in early 2017, when Trudeau will face the ultimate test of his resolve to tackle climate change.
Until then, he is “confident we are setting the country on a path toward long-term, clean growth, critical emissions reductions and a healthier, more prosperous future.”
Favorable spin In her usual manner, British Columbia Premier Christy Clark tried to put the most favorable spin on the outcome, hoping that Canadians would agree that the leaders “made progress” towards a price on carbon, that remains the biggest ticket item as well as the most divisive issue.
British Columbia, Alberta, Ontario, Quebec (the four largest provinces) and Manitoba either have or are about to implement various forms of carbon pricing that include either a tax or a “cap and trade” system.
Saskatchewan opposed But Saskatchewan Premier Brad Wall continues to aggressively oppose any sort of carbon tax, although he has agreed to participate “constructively” in the four working groups that will work on a more complete declaration by October.
He has demanded to know why Canada should put its own economy at risk when 1,000 coal-fired power plants are either under construction or planned around the world, above all in India which is determined to provide energy to 300 million people.
Wall, who is in the midst of a provincial election, said his budget deficit of C$427 million in the current fiscal year - a minor blip alongside Alberta’s projected C$10.4 billion shortfall in 2016-17 - is needed to maintain public services.
Faced with that weakening economy, he will reject any federal move to impose a minimum price on carbon, even if that price is flexible.
Wall argues Saskatchewan has already established a form of “carbon pricing” through Canada’s only sequestration project that captures carbon dioxide from a coal-fired power plant and sells it to oil producers for enhanced crude recovery.
Nova Scotia Premier Stephen McNeil said his province also has a form of carbon pricing by reducing its dependence on coal-fired power and purchasing more expensive hydro power from Newfoundland.
Clark conceded that the Vancouver Accord “would indicate that the final carbon pricing agreement might fall short of what purists would consider to be a national minimum carbon tax.”
To date, the Trudeau government has been pressing for a tax of C$15 a metric ton, rising over a number of years to C$40, while British Columbia at C$30 a metric ton has already doubled up on the federal base price and Alberta has targeted a two-step increase in its existing C$15 tax to C$30 by January 2018.
Jon Garson, president of the British Columbia Chamber of Commerce, said he hopes Trudeau will introduce a revenue neutral and uniform national tax to replace the current patchwork of provincial schemes.
He said a single tax would offer “huge benefits” by advancing interprovincial trade and other business activity, while offering certainty to investors.
Alberta Premier Rachel Notley said that along with “taking a major step forward” on climate change measures, the premiers endorsed the need for urgent approval of oil pipelines.
She urged the other leaders to help Alberta get its oil sands bitumen to new markets, by agreeing on the need for urgency and a regulatory process that is “timely and predictable.”
Notley said that without pipeline links to new markets Alberta will leave about one-third of its potential revenues from oil resources on the table, denying a share of that money to all jurisdictions.
“It’s not just an Alberta problem, it’s a Canadian problem and every province needs to understand that,” she said. “There was truly no objection around the table when I made the point of urgency.”
Notley said that included Quebec Premier Philippe Couillard, who agreed that the final verdict on the Energy East pipeline, which is planned to cross Alberta, on its way to a marine terminal in New Brunswick, rests with the federal government on the recommendations of the National Energy Board.
- GARY PARK
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