Canadians voted for a carbon tax, Trudeau says as provincial blowback grows

Prime Minister Justin Trudeau attends a Liberal Party Fundraiser in Toronto on Tuesday, October 2, 2018. Image Credit: THE CANADIAN PRESS/Chris Young

October 05, 2018 - 9:00 PM

OTTAWA - Prime Minister Justin Trudeau says Canadians gave his government a mandate in the last election to implement a national carbon price and that is exactly what it is going to do.

"Pollution should not be free anywhere across this country," Trudeau said Friday at an event in Windsor, Ont.

His comments came after provincial opposition to the carbon price plan gained even more strength this week when Manitoba did a sudden about-face on its intention to impose a $25-per-tonne carbon price this fall.

Manitoba Premier Brian Pallister said he was backing off because he could not get Ottawa to promise it wouldn't force Manitoba to raise the price or risk the federal government imposing its own, additional carbon tax on top of it.

Ottawa passed legislation last spring to give it authority to impose a carbon price on any province without its own beginning Jan. 1, 2019. It is starting at a minimum of $20 per tonne, rising $10 per year until 2022.

All provinces were to submit their plans for federal review by Sept. 1, and Environment Minister Catherine McKenna told The Canadian Press recently the reviews are still underway. Any province that doesn't meet the federal standard will be subject to a federal carbon price on most fuel sources, like gasoline and natural gas, and big emitters have to join an industrial program that caps emissions by industry and charges the carbon price on emissions above those caps.

When the legislation was introduced as part of the budget implementation bill in March, it seemed as if Saskatchewan may be the only province where it would be needed. Premier Scott Moe is asking the courts to decide if Ottawa has jurisdiction to impose a carbon tax on his province against its will.

Ontario's new Progressive Conservative government under Premier Doug Ford scrapped that province's cap-and-trade system in July and launched his own legal challenge of Ottawa's plan.

The blueprint Prince Edward Island submitted did not include a carbon tax and Premier Wade MacLauchlan says his province has a plan to meet its emissions reduction targets without one.

New Brunswick's government is in flux following the recent election, but current Premier Brian Gallant intends to try to rename a portion of the existing gas tax in lieu of a new carbon tax, and Tory leader Blaine Higgs, who could become premier, says he refuses a carbon price and will join the lawsuit if he takes office.

Even Alberta Premier Rachel Notley, who introduced her own carbon price system before Ottawa required it, is now refusing to raise it in line with federal requirements because Alberta is irritated the Trans Mountain pipeline expansion is in limbo. Alberta United Conservative Party Leader Jason Kenney, the front-runner to win the Alberta election next year, has promised to scrap the Alberta carbon price entirely if he is elected.

Newfoundland has not made public the contents of its carbon plan proposal submitted to Ottawa.

That leaves, at the moment, just Quebec and British Columbia. Quebec's incoming premier Francois Legault, whose Coalition Avenir Quebec party won a majority government on Monday, intends to maintain Quebec's cap-and-trade system. B.C.'s NDP government under Premier John Horgan already has a carbon tax of $35 per tonne, raising it $5 last spring. B.C. has had a carbon tax since 2008.

Despite the fractured provincial landscape, Trudeau will not be dissuaded.

"We have decided as a government, and Canadians asked us to do this in 2015, that we are going to put a price on pollution," he said Friday.

Climate change is the "most economic and social challenges and geographic challenges of our time," he added.

Alberta Conservative MP Mike Lake challenged Trudeau's assertion he has a mandate for a carbon price, pointing out that people are voting provincially for parties that oppose the idea.

"It's clear that Canadians, through the provincial elections, are stating their opposition to the carbon tax in big numbers," he said. "This is the absolute cornerstone of their climate plan, and it's disintegrating around them."

Federal officials say there'll be no problem adding Manitoba to the growing list of provinces where Ottawa will have to apply a carbon tax — but they're still not ready to say exactly how the revenues raised by the tax will be given back to people in those provinces.

"We're still completely on track to implement in regions where it is required by Jan. 1," said an official in McKenna's office.

It is understood that the government must have all the reviews done and the plans in place by early December if a Jan. 1 implementation date is to be met. An announcement on how carbon price rebates will work is likely to come when Ottawa announces which provinces have not met the federal standard.

There is some confusion about what all the carbon price opposition means for a $1.4-billion federal Low Carbon Economy Fund. Only provinces that are part of the Pan Canadian Framework on Clean Growth and Climate Change are supposed to be eligible for the fund, and Ontario's $420 million share is "under review" following its decision to cancel both cap and trade and the GreenOn home retrofitting program which was to be partially funded by the federal cash.

However, McKenna's official said this week that Manitoba's $66-million share is not at risk, because Manitoba has other elements of its climate plan that fit with the fund. Ontario, she said, currently does not.