Extreme weather, including floods, wildfires, storms and droughts, are proof Canada is already grappling with the effects of climate change — and these increasingly frequent events demand Ottawa take action and apply a national price on carbon, Prime Minister Justin Trudeau said Tuesday in Toronto.
Trudeau said he believes the added cost on fuels will tamp down carbon-intensive consumption, reduce emissions and help curb pollution.
"The science is unequivocal: putting a price on pollution is one of the best ways to move forward," he said to media as well as students at Humber College in the Etobicoke riding of Premier Doug Ford, a noted carbon tax foe.
The vast majority of the revenue collected will be rebated on a per capita basis, but some small portion of it will be used for programs to help households and business reduce their energy use and to provide additional help for rural people who are heavily dependent on diesel, the official said. That approach has raised concerns among some businesses, who worry they will face additional costs.
"The problem exists because your political leaders have done far too little about this. Will we kick this can down the road yet again? Or will we show some courage to do what needs to be done?" Trudeau said.
In his Tuesday speech, Mr. Trudeau will point to the recent report from the United Nations Intergovernmental Panel on Climate Change (IPCC), which called for urgent action to avert catastrophic climate change. The IPCC warned of impacts including more deaths and climate refugees due to extreme weather and rising seas, as well as a greater rate of species extinction.
"Starting next year, it will no longer be free to pollute anywhere in Canada. And we're also going to help Canadians adjust to this new reality."
Conservative Leader Andrew Scheer, who has vowed to scrap a federal carbon tax, will react to the prime minister's announcement at 11:45 a.m. ET. CBCNews.ca will carry his remarks live.
There are two parts to the federal "backstop" climate program, which will apply differently across the country in our patchwork system of Canadian federalism.
The first part is what the government is calling "a regulatory charge on fuel," which will be levied on gasoline, light fuel oil, natural gas and propane.
The rebates will only apply in Saskatchewan, Manitoba, Ontario and New Brunswick — the four provinces which have refused to impose their own carbon price — and the average household payments in those provinces will range from $256 to $598.
Under the terms of the national climate framework, a deal agreed to by most of the provinces and the federal government some two years ago, Ottawa will levy a tax of $20 a tonne of greenhouse gas emissions starting in 2019, rising by $10 each year to $50 a tonne by 2022.
According to background documents supplied by the government, the $20-per-tonne carbon tax will result in an approximate cost increase of 4.42 cents a litre for gasoline, 3.91 cents per cubic metre for natural gas and 3.10 cents a litre for propane.
Consumers will not pay the tax directly to the federal government, but rather, Ottawa will levy the tax on fuel and production and distribution companies — for example, natural gas providers like Enbridge — who will in turn pass on those costs to customers.
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This federal backstop will apply in provinces that do not have adequate climate pricing plans of their own that meet federal standards: Saskatchewan, Manitoba, Ontario and New Brunswick, beginning in April 2019, but also Yukon and Nunavut as of July 2019.
A day after Germany halted exports of military equipment to Saudi Arabia over the killing of Jamal Khashoggi, Trudeau said the option is on the table for Canada too, though he stopped short of actually taking action: “We have frozen export permits before when we had concerns about their potential misuse and we will not hesitate to do so again.” Last year Canada sent $1.37 billion of goods to Saudi Arabia last year, mostly armoured vehicles. (Bloomberg)
So what was initially intended as a backup plan in the event that a few provinces failed to design their own carbon pricing plans has now become the principal carbon pricing mechanism for nearly half of the country's population. Roughly 47 per cent of Canadians live in provinces or territories that have said they will not follow through on the national climate framework.
In an effort to make most Canadian families in those provinces whole, and to offset the resulting costs of these new taxes, the Liberal government will offer direct rebates to taxpayers — called Climate Action Incentive payments.
So what was initially intended as a "backstop" in the event that a few provinces failed to design their own carbon pricing plans has now become the principal carbon pricing mechanism for nearly half of the country's population. Roughly 47 per cent of Canadians live in provinces that have said they will not follow through on the national climate framework.
A federal official estimated 70 per cent of families in these provinces will receive more in climate payments than they will pay each year in new carbon taxes.
That plan, brokered with most provinces roughly two years ago, includes a carbon tax on greenhouse gas emissions as part of a larger effort to tackle climate change. Trudeau has said the federal government will implement the carbon tax in provinces that do not have a tax of their own, or a cap-and-trade system.
For efficiency, people in affected provinces will indicate on their tax returns if they are eligible for the payment.
Hard sell? Trudeau set to unveil carbon tax rebate plan
The Canada Revenue Agency (CRA) will then ensure people are adequately compensated. Thus, the payments will be made annually and will reflect about a year's worth of emissions.
Prime Minister Justin Trudeau is set to explain how he intends to compensate Canadians for the anticipated hike in fuel costs and other household expenses during a mid-morning appearance at Humber College in Etobicoke – which, its worth noting, is the home riding of Ontario Premier and avowed carbon tax critic Doug Ford – where hell be joined by the two ministers responsible for the rollout of the new program, Environment Minister Catherine McKenna and Finance Minister Bill Morneau.
If someone is entitled to a tax refund, that refund would be boosted by the amount a taxpayer is entitled to under the new climate incentive payment program. If you owe the federal government money at tax time, that amount would be reduced by the amount you stand to gain from this initiative.
The payment is not intended to be part of the federal tax system per se — the government said CRA's existing infrastructure is best placed to make payments like these to taxpayers.
The amount will vary based on the province you live in and the number of people in your household. For example, a single adult in Ontario stands to gain about $154 next year.
Payments for people in small communities and rural areas will include a 10 per cent supplement, government officials said, "in recognition of their specific needs."
The second part of the system is a separate fuel charge for large industry, known as the output-based pricing system. Officials said details of this component will be provided at a later date.
Premier Doug Ford opted to pull out of the previous Ontario government's cap-and-trade system and to rally against a proposed carbon tax plan, putting the provincial and federal governments at odds. In July, Ontario announced it was joining Saskatchewan in a constitutional challenge to the federal carbon tax.
The proceeds from this large industry tax won't be returned to Canadians through payments, but will be used to support future climate actions in the jurisdiction in which the revenue is raised.
Ottawa plans to mail out rebate cheques to compensate people in provinces without a plan. The cheques are meant to offset some of the added cost the carbon tax will impose on goods like gasoline and natural gas.
Canada signed on to ambitious emissions reduction targets at the Paris climate accord meeting in 2015, and a national pricing strategy is seen by Ottawa as the best way to live up to the accord.
(The Liberal government maintained the same targets set by the former Conservative government: 17 per cent below 2005 levels by 2020 and 30 per cent below by 2030.)
The government projects the pricing plan will reduce carbon pollution by 50 million to 60 million tonnes by 2022.
However, the government has conceded a carbon price alone won't be enough to meet those targets.
The national climate plan also includes other measures to battle climate change, including new building codes to boost energy efficiency, more charging stations for electric cars, expanding clean electricity sources and upgrading power grids.
John Paul (J.P.) Tasker is a reporter in the CBC's Parliamentary bureau in Ottawa. He can be reached at [email protected]
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Ottawa announced two years ago it would require every province to have a price on emissions, and that it would impose one on those who refused. The current requirement is for it to be $20 a tonne by Jan. 1, rising $10 each year until it hits $50 a tonne in 2022.