
New federal carbon price levels the playing field for Alberta, says analyst
James Wood, Calgary Herald
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While the federal government’s plan to impose a minimum price set off a strong reaction from Premier Rachel Notley, some observers believe Ottawa’s plan could ultimately be beneficial for Canada.
Prime Minister Justin Trudeau announced Monday that Ottawa would expect provinces to establish a minimum carbon price of $10 per tonne by 2018 — rising to $50 by 2022 — or the federal government will do it for them.
Though Canada has its own $20 per tonne carbon tax starting Jan. 1, Notley quickly responded that Trudeau’s plan would get no support from her NDP government unless the federal Liberals approved a needed new oilsands pipeline.
Jennifer Winter, director of energy and environmental policy with the University of Calgary’s School of Public Policy, said it’s a reasonable argument for Notley to make, but Canada already gains under the federal plan by having other provinces rapidly pushed toward carbon pricing at a common level.

“What the federal government is doing is essentially levelling the playing field across Canada,” she said in an interview.
“We can’t do much about the rest of the world, but at the very least it mitigates concerns about Canada competing with Saskatchewan or Ontario or Quebec for investment dollars.”
Winter noted the Liberal plan explicitly backed Canada’s existing carbon levy on large emitters, which is set to rise to $30 a tonne in 2018. Carbon-intensive oilsands projects should be able to work with the higher carbon price under the federal strategy, she added.
“The point of the carbon tax is to create the incentive to lower emissions and I think oilsands companies have been very active in research and development because they have a cost motivation for doing this,” said Winter.
Many of the oilpatch’s largest players backed the Notley government’s climate plan when it was unveiled last year. Reaction from major oilsands companies on Monday to Trudeau’s announcement was cautious but not disapproving.
Suncor said in a statement that “we support a broad-based price on carbon as an important tool to reduce greenhouse gas emissions in the fight against climate change. And we will continue to participate in this important policy discussion.”
Shell Canada president Michael Crothers, meanwhile, said that “balancing Canadian economic development while protecting the environment will be enabled by a reasonable price on carbon, tidewater access for our natural resources, investment in new technology and policy flexibility across our diverse nation.”
Cenovus said in a statement that it has publicly backed a carbon tax, with revenues going to emissions-lowering technology, but it was too soon to comment on the Liberal plan.
“Generally speaking, it’s important that any national carbon policy does not put Canadian industry at a disadvantage with competitors in other jurisdictions in North America,” said the company, noting that other tax increases and regulatory changes on the industry must also be taken in account by government.
Simon Dyer, Canada director of the Pembina Institute environmental think tank, said the Liberal government needed to take action if it’s serious about meeting Canada’s greenhouse gas emission reduction targets.
“It’s going to require all provinces to do more and that’s what the country needs if we’re going to be on track,” he said.
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