Canada plans to impose carbon tax on major emitters of greenhouse gases

Canada plans to impose carbon tax on major emitters of greenhouse gases

The Liberal government of Prime Minister Justin Trudeau - which took power in 2015 vowing to tackle climate change - had initially proposed a levy on 30 percent of industries' emissions in any of Canada's 10 provinces that did not introduce their own carbon pricing systems.

That includes the auto sector, which is the next possible target for President Donald Trump's tariffs, and breweries, who are paying more for their cans from the aluminum tariffs Trump has already imposed.

Manufacturers of steel, iron, lime, cement and nitrogen fertilizer will now have to pay the carbon price only on emissions that exceed 90 per cent of the average emissions in their sector.

The system would have companies whose emissions place them below the cap earn credits they could trade with companies that come in above it. Companies above the cap can innovate to reduce their emissions, buy credits to offset their emissions, pay the carbon price on emissions over the cap, or some combination of the three.

The Trudeau government has said it would use these powers as part of a national strategy to fight climate change and honour Canada's worldwide commitments, supported by all political parties, under the 2015 Paris Agreement to reduce greenhouse gas pollution and prevent risky levels of atmospheric warming.

Firms complained this would make them less competitive, given the United States has no such carbon tax.

Under the federal plan, each province is allowed to create its own carbon pricing regime.

More news: Woods gets last crack at Firestone
More news: Not drinking alcohol 'can raise your risk of dementia', study finds
More news: Moe continues to oppose carbon tax despite feds relaxing regulations

Stewart Elgie, director of the Environment Institute at the University of Ottawa, said the government is making a smart change because it reflects the reality that very few industries will be able to cut emissions more than 10 to 20 per cent over the next five years.

Earlier this month, Ontario quit the California cap and trade market and joined Saskatchewan in suing the federal government to try to block it from imposing its carbon tax on them.

Ottawa's new carbon plan still doesn't work, won't reduce environmental outcomes and will cost jobs, said Moe.

The environment department says climate pricing remains a key component of its greenhouse gas reduction strategy.

Business associations want Ottawa to cut corporate taxes in Canada, arguing the USA tax changes could end up inflicting more damage on the Canadian economy than the possible termination of the North American Free Trade Agreement.

A spokeswoman for Morneau said if he is to make any adjustments, they would be announced in his fall economic statement.

The government released a regulatory framework for carbon emissions in January, which was to take effect in 2019.

Related Articles