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Canada Ontario to target federal carbon tax, support pipeline construction, in fall fiscal update

The Ontario government is exploring a suite of measures aimed at revealing the cost of the federal carbon tax on the province’s gas prices and home heating bills, as part of Premier Doug Ford’s continued pushback against Ottawa’s plan.

Mr. Ford’s government is also set to issue a public declaration of support for pipeline projects, such as the revival of Energy East, in the province’s first fall economic statement this week, government sources told The Globe and Mail.

The document will detail the province’s fiscal situation for the first time since the Progressive Conservative government took office in June. Ontario Finance Minister Vic Fedeli will announce the province’s plans in a Thursday speech to the legislature, which includes a focus on exposing the cost of the federal Liberal government’s carbon tax on consumers.

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Two government officials, speaking on the condition of anonymity because they were not authorized to speak publicly, told The Globe the plan involves waiving a provincial veto over pipeline projects contained in the Canadian free trade agreement signed by the provincial, territorial and federal governments in 2017. The agreement notes that Ontario “reserves the right to adopt or maintain a measure limiting market access … and development of energy (including electricity, natural gas, and renewable energy).” Although the agreement doesn’t outline a veto per se, it does give Ontario the right to object to a project.

One government official told The Globe the province is prepared to relinquish any veto and officially put Ontario behind any effort to build a pipeline from western Canada to Eastern Canada.

The official said the issue has come up in Mr. Ford’s conversations with his provincial counterparts to explore the notion of resurrecting Energy East.

Federal Conservative Leader Andrew Scheer has also pledged to revive the Energy East pipeline, although Western crude producers have not committed to ship enough oil on the line to make it viable.

The other measures being explored by the provincial government to implement next year, when the federal carbon pricing system kicks in, include placing stickers on gas pumps across the province reminding customers of the carbon tax, and line item breakdowns on home heating bills and gas receipts as to what the carbon tax costs. Ontario is also challenging the tax in court.

Last month, Prime Minister Justin Trudeau unveiled his carbon-tax plan, which will directly rebate Canadians in four provinces, including the election battleground of Ontario, and leave most families financially better off, the federal government said.

The provincial government official said that to ensure members of the public know what they are paying and what they getting back, it’s important for citizens to see the full cost of the carbon tax as they pay it.

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Mark Winfield, an environmental studies professor at York University, said in a strict legal sense the province doesn’t have a veto over interprovincial infrastructure projects.

Still, he cautioned the provincial government not to give away its right to review energy projects, noting that the Ontario Energy Board deemed the defunct Energy East pipeline not to be in Ontario’s energy security and environmental interests.

“I still think the province would want to think long and hard about whether it really wants to give away any right of review at all,” Mr. Winfield said.

“I would think that a most unwise choice.”

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