In his first move as prime minister, Mark Carney signed a directive to remove the consumer carbon tax on April 1, but it isn’t likely to end calls for the upcoming federal campaign to be a carbon tax election.
Standing in front of an “Axe the Tax" sign on Monday, Conservative Leader Pierre Poilievre pledged to scrap the industrial carbon pricing if elected, too.
“A common-sense, Canada-first Conservative government will repeal the entire carbon tax, including the federal backstop that requires provinces impose industrial taxes,” Poilievre said.
Most provinces and territories operate their own carbon pricing on big emitters.
Alberta was the first in Canada to introduce the tax in 2007.
Only Prince Edward Island, Nunavut, Manitoba and Yukon use the federal industrial backstop.
“These would be facilities like oilsands facilities, electric generators and factories that produce things that emit a large amount, so above a threshold. And that’s covered by this large emitter pricing, which has, I’d say, largely flown under the radar of everyday Canadians,” said Blake Shaffer, an associate professor of economics at the University of Calgary.
With most Canadian jurisdictions implementing carbon reduction policies anyway, Shaffer said eliminating the federal backstop wouldn’t necessarily scrap the carbon tax altogether.
Doing so isn’t likely to have a major impact on the average consumer, he said.
“What it’s really doing is driving an incentive for emission reductions by reducing emissions intensity, not by shutting in production,” he said.
“A well-designed policy doesn’t have large pass-through to consumers, and it’s really driving emission reductions by cleaning up the way in which you produce.”
The Canadian Climate Institute said the industrial carbon tax is the most effective and economical way to cut emissions.
Getting rid of the federal policy could also hinder Canada’s competitiveness on a global stage, said the institute’s president.
“Cancelling large-emitter trading systems would ultimately hurt more than it would help. It would create profound uncertainty for businesses and investors at the worst possible time, and jeopardize upward of $5 billion in credit values in Alberta alone,” said Rick Smith.
A joint statement from Canada’s ministers of energy and environment called the Conservatives' plan “bad policy.”
“It also puts at risk Canada’s ability to deepen trade ties with our European and other allies. Key partners, including the European Union, will soon impose tariffs on imports based on carbon policies and carbon content,” read the joint statement from Jonathan Wilkinson and Terry Duguid.
Alberta Premier Danielle Smith hasn’t confirmed whether her government would keep its industrial carbon pricing, should the Conservatives win the upcoming election.
But in a meeting with the prime minister on Thursday, Smith said one of Alberta’s demands from the federal government includes returning oversight of the industrial carbon tax to the provinces.
