Saskatchewan, Nova Scotia, Newfoundland and the Northwest Territories walked out of the room when Justin Trudeau announced a couple of days ago that he was putting a price on carbon. Chantal Hebert writes that the tax is no cash grab. What Trudeau is doing is filling a vacuum:
For this is not about replenishing the coffers of an impoverished federal government.
Trudeau’s planned introduction of a national floor price for carbon in 2018 marks the belated end of a federal vacuum that has seen successive prime ministers — from Jean Chrétien onward — make climate-change commitments on the international scene and then do little to ensure Canada meets them.
And most of the provinces already have schemes in place that will meet the $10 a ton threshold:
For example, B.C. started off with a carbon tax at the $10 level … almost a decade ago. That provincial tax now stands at $30. Under the plan announced by Trudeau on Monday, the federal floor would be raised by $10 a year for five years to reach $50 a tonne by 2022.(As an aside, by the time Ontario, Quebec, Alberta and B.C. have to up their game to keep up with the national escalator clause, the 2019 federal election will be over.)
Moreover, despite the caterwauling, the the program is not a top down creation:
Provided they meet or exceed the federal floor price on carbon emissions, the provinces will also continue to be free to pursue climate-change mitigation schemes of their own choosing.
At some point, though, the onus will be on them to demonstrate that they are meeting or exceeding the federal floor price. Quebec and Ontario, for instance, have opted for a cap-and-trade system. Over the summer, the provinces and the federal government failed to reach a consensus on equivalencies between carbon taxes and cap-and-trade pricing. The two will eventually have to be reconciled.
But "if the federal government does tax emissions in their place, it will return the proceeds to the provincial treasuries, presumably leaving them free to use the revenues to offset the cost of carbon pricing with tax breaks."
The tax on carbon is a classic Canadian conundrum. It's never been easy to make the confederation work.