The federal Liberal government has announced the basic details of a national carbon tax.
Speaking in the House of Commons today (October 3), Prime Minister Justin Trudeau said a tax on air pollution will be implemented incrementally beginning in 2018.
It will start at $10 per tonne and increase by $10 each year, up to $50 a tonne by 2022. Trudeau added that the tax will be revenue neutral for the federal government. Proceeds from the tax will be returned to the provinces where they were collected.
Trudeau said that details regarding implementation will largely be left up to the provinces. Each jurisdiction should decide on whether they want a cap-and-trade system (the sort of scheme favoured by the Obama administration) or a direct price on greenhouse-gas emissions (like with B.C.’s system for taxing air pollution).
“When we say we’re doing to do something, we follow through,” Trudeau said in reference to a pledge made on the campaign trail last year.
“There is no hiding from climate change," he continued. "It is real and it is everywhere."
The announcement was received with criticism from Conservative members of Parliament. But it’s unlikely to illicit much of an uproar from the oil and gas sector.
An initial price of $10 per tonne that only moves up to $50 per tonne will not impose costs above what the industry can withstand, nor is it more than what has been expected to come for some time.
For the same reasons, advocates for a national carbon tax immediately said that Trudeau’s plan did not go far enough.
“Too low to be taken seriously,” wrote federal Green party leader Elizabeth May in a message posted on Twitter.
B.C.’s carbon tax was introduced in 2008 and today stands at $30 per tonne. That’s equivalent to about seven cents per one litre of gasoline.
Last August, Premier Christy Clark disappointed environmentalists when she unveiled B.C.’s new strategy for limiting carbon emissions and made no mention of an increase on carbon pricing in B.C.
That failure to include a tax increase in B.C.’s plan for fighting climate change ignored key recommendations made by the government’s own “climate leadership team”. That group suggested increases of $10 per year beginning in July 2018 in a manner that remains revenue neutral via a one-percent decrease of the provincial-sales tax.
Clark later said that the rest of Canada should catch up to B.C.’s $30-per-tonne price on carbon before B.C. implements any increase on its tax.
Because B.C. already has that carbon tax in place, it will not be immediately affected by the order Trudeau gave today. Ontario and Quebec are similarly already working on cap-and-trade schemes of their own.
The other provinces and territories have until 2018 to decide on how they want the tax to function in their respective jurisdictions. Trudeau said that if regional frameworks are not in place by that time, the federal government will step in to assist them with implementation.