Liberals plan to soften carbon tax plan following competitiveness concerns

05 August, 2018, 03:27 | Author: Kelly Sanders
  • The Trudeau government is scaling back carbon pricing guidelines for some of the country's heaviest energy

Environment Canada officials met with representatives from more than a dozen Ontario industries, including auto and auto parts manufacturers, pharmaceutical companies and a number of chemical firms, last week to begin the process of assessing how their competitiveness might be affected by the carbon price.

Phillips said that amounts to the federal government starting a "climb down" on its plans - an admission, he said, that "carbon taxes are not effective", especially when there's uncertainty in the market.

"We consulted broadly with industry", Caroline Theriault said in a statement.

The revisions come as big industries face competitive threats from south of the border in the form of corporate tax cuts and protectionist tariffs, and as Ottawa prepares to replace Ontario's cap-and-trade system with its own carbon levy.

John Moffet, the associate assistant deputy minister at Environment and Climate Change Canada, said Thursday those changes may not be the last, and that economic pressures facing companies from things like USA tariffs are among the factors being looked at.


According to Premier Moe, the government has launched their appeal in opposition of the carbon tax.

Last week, following months of consultations, Ottawa scaled down its carbon pricing plan for heavy industrial emitters with the aim of reducing greenhouse gas production without driving firms from Canada altogether. Mr. Ford has said that ending cap-and-trade will reduce electrical bills and gasoline prices.

Because the law is not being applied to all province's and territories, just those that don't put in their own carbon tax, the factum argues the law "is constitutionally illegitimate". "We encourage them to take another step and remove this policy, re-engage with the provinces as they committed to on real solutions".

Ottawa's new carbon plan still doesn't work, won't reduce environmental outcomes and will cost jobs, said Moe.

"I've always said the environment and economy go together, and we don't want to drive industry out of our country". With the case possibly headed from there to the Supreme Court, Moe said it was unlikely there would be a decision ahead of the January implementation date for the carbon tax. He says taxing 10 or 20 per cent of carbon emissions will likely lower emissions at the same rate while lowering the costs for businesses. He said that while industries like lime and steel could benefit from the changes, the energy industry is Canada's key exporter and investment has declined domestically over the past several years, while it has risen recently in the United States, Canada's main customer and competitor.

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