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To be blunt, there is no reason that justifies such a gap. One province should not pay an effective rate that’s higher than another. Even worse, in those provinces where the federal carbon tax “backstop” is imposed — Saskatchewan, Manitoba, Ontario, New Brunswick and likely soon Alberta — the tax will be twice as high, if it reaches $50 tonne in 2022 as scheduled, than the de facto rate in Quebec, which is expected to reach around $25. This is because the price of Quebec’s cap-and-trade plan is linked to the price of permits sold on a market it shares with California, and where the California government deliberately oversupplies permits to keep prices low. Projections for prices on that market show permit prices rising to remain below $25 by 2022. Still, the federal government approved Quebec’s cheaper plan as sufficient to avoid the more expensive federal “backstop” carbon tax. We are therefore punishing certain producers more than others, which will certainly hurt an industry already faced with many problems.

Indeed, the Canadian oil and gas sector is dealing with several challenges; a higher carbon tax just adds insult to injury.

First and foremost, the lack of pipelines in Canada is keeping our resources from reaching foreign markets, forcing exporters to take discounts for serving just one market — the U.S. — using limited transportation options. A crisis point was reached last year when the discount rate between Western Canada Select and West Texas Intermediate — essentially, the gap between the price of Canadian and U.S. oil — peaked at $50 per barrel, far above its historic level. This led the Alberta government to impose production cutbacks of 325,000 barrels per day, temporarily easing the pain, but not solving the underlying problem.