Canada's carbon-pricing move to aid industry

Wednesday 7 Feb 2018

Canada to relax carbon-pricing measures to aid industry competitiveness - In Canada, the Liberal government is set to introduce carbon-tax legislation that will give breaks to industrial emitters as Ottawa seeks to limit the economic impact of an ambitious environmental agenda to be enacted this year.

Environment Minister Catherine McKenna and Finance Minister Bill Morneau released a draft legislative proposal outlining key elements of the "carbon price backstop" that will apply only in provinces that do not have their own levy or have one that fails to meet federal standards.

Legislation will be tabled after the House of Commons with the goal of having it passed by the summer recess in June. Ottawa will also be assessing provincial plans over the next eight months and will indicate after 1 September in which provinces it will impose the federal levy, either in whole or in part.

"Canadians know pollution isn't free and last year we saw that extreme weather events are costing us billions of dollars – trillions if you look at what is happening around the world," Ms. McKenna said in an interview. "And we know a price on pollution is the best way to fight climate change and also get clean innovation. But of course, competitiveness is a key part of it."

Under the plan, the government will set an emissions cap for large industrial plants and they will pay the carbon tax only on greenhouse gases that they emit above that threshold. The cap will be based on an industry average, and the most efficient facilities will pay no tax and may even generate credits.

The system is designed to avoid driving industry out of the country to jurisdictions that have no carbon pricing, which would both cost Canadians jobs and result in no environmental benefit for the planet, the minister said.

Ottawa will set the levy at $10 a tonne this year, and increase it annually in $10 increments until it is $50 a tonne in 2022, a level that would drive up gasoline prices by roughly 11 cents a litre.

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Source: The Globe and Mail

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