Federal government eyeing post-2022 carbon-price hikes


The federal Liberals have already laid out their plans to ensure the national carbon price hits $50 a tonne by 2022, but government documents indicate Ottawa is eyeing hikes beyond that time horizon.

Federal Environment Minister Catherine McKenna says no decisions have been made about a carbon price post-2022. However, a federal Finance Department document distributed to Canada reporters on Wednesday by the province’s United Conservative Party (UCP) discusses the nuts and bolts of the federal carbon-pricing “backstop” or benchmark. The document notes the overall approach will be reviewed in 2022, “to confirm the path forward, including continued increases in stringency in future years.”

The document, originally obtained by subscription-only news website Blacklock’s Reporter, suggests that Prime Minister Justin Trudeau’s government is eyeing carbon-price increases beyond 2022, and above the $50-a-tonne price, the UCP said. Many economists, environmentalists and even energy-industry watchers have already assumed this was the plan – but a post-2022 price road map has not been clearly laid out by Ottawa.

The UCP released the documents on Wednesday to attack the NDP government’s political alliance with the Trudeau government, which has seen Premier Rachel Notley agree to phase in a $50-a-tonne carbon tax following Ottawa’s 2016 approval of the Trans Mountain pipeline expansion to the West Coast.

However, the UCP says the potential of carbon-price increases beyond $50-a-tonne will further put off investors who might be eyeing Canadian projects or companies as global oil prices push higher. The UCP is in political alignment with outgoing Saskatchewan Premier Brad Wall, who has also said his province has no intention of adopting the tax, and will fight any attempt by Ottawa to impose one.

The federal government has mandated a carbon levy of at least $10 a tonne this year, and annual increases of $10 until it hits $50 a tonne in 2022. Carbon pricing is an especially critical issue in Canada, which has the highest greenhouse gas emissions of any province, where the carbon tax has already gone to $30 a tonne as of Jan. 1, and where the province’s industry-heavy economy is centred around producing oil and natural gas for Canadian and U.S. consumers.

The UCP is challenging the NDP in the provincial election scheduled for early next year – and is now leading in the polls. Leader Jason Kenney’s hallmark promises include scrapping the province’s carbon tax, and promising to go to battle with Ottawa over energy policy.

On Wednesday, Canada Environment Minister Shannon Phillips said in an interview that her province has been consistent in saying it is not considering any increases to its carbon levy beyond $50 a tonne. “We’ve been clear.”

Tags: , , , , , , , , ,

Categorised in: