Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Federal-provincial peace, on the matter of pricing industrial greenhouse gas emissions, may have just come at considerable cost to Canada’s climate ambitions.

Prime Minister Justin Trudeau’s Liberals clearly believed there was little choice but to agree, as was announced on Monday, to accept the pricing structures proposed by the governments of Ontario and New Brunswick. That much was clear from nose-holding letters from Environment Minister Jonathan Wilkinson to his provincial counterparts in those two provinces – among the last in Canada where such deals hadn’t already been reached, and where a federal price on large industrial emitters has been collected instead – calling their plans “significantly weaker than the federal backstop.”

The Liberals were worried that, because the provincial models arguably meet federal criteria for avoiding Ottawa imposing its own price, rejecting them could hurt their government in a Supreme Court case about the constitutionality of the federal carbon-pricing framework – both the industrial price and the more widely known one charged to fuel consumers – that begins this week.

Story continues below advertisement

Even if the alternative could have been worse, these deals – particularly the one with Ontario – represent another unhelpful twist along Canada’s tortuous path toward a cleaner economy.

It’s not just that the relative laxness of the provincial regulations will likely mean more modest reduction of industrial emissions in the next few years than would have been the case under the federal system, though that’s certainly cause for concern. While the models approved on Monday ostensibly tax industrial emissions in excess of proscribed targets at roughly the same rate as under the federal system, the provincial targets are set in such a way that far fewer emitters will have to pay them.

The problem is also that this latest compromise, and some of the messaging that comes with it in Mr. Wilkinson’s letter and other federal channels, adds to the instability that impedes the economic upside that carbon pricing is supposed to have.

More than just punishing large emitters, market-based regulatory regimes like these are supposed to help encourage and attract investment in clean technology, by rewarding low-emissions companies through credit-trading and other mechanisms. But that only works if there is enough regulatory certainty for businesses and investors to bank on actually getting the rewards they’ve been promised.

That sort of predictability has especially been lacking in Ontario, where anyone with a vested interest in industrial pricing has spent the past few years being jerked around.

First, starting in 2017, there was the ambitious cap-and-trade system introduced by Kathleen Wynne’s provincial Liberal government. Then that was hurriedly scrapped by Doug Ford’s Progressive Conservatives after they won office in 2018. Then the federal pricing system was imposed in absence of a provincial one. Now the system belatedly put forward by Mr. Ford’s Tories is supposed to replace the federal one, probably sometime in 2021, after the details – some of which weren’t worked out prior to this week’s announcement – are finalized.

After Monday’s announcement, a senior federal official (speaking on a not-for-attribution basis because the official was not authorized to speak on the government’s behalf) said the Liberals intend to let these new provincial systems stand for 2022, at least. But that doesn’t exactly qualify as a long-term outlook on which to hang investment decisions. And the official indicated that, as Mr. Wilkinson’s letter implied by mentioning coming consultation on a “post-2022 benchmark,” Ottawa could soon settle on new standards and intervene again if provinces are unwilling to meet them.

Story continues below advertisement

So if Mr. Trudeau’s and Mr. Ford’s governments remain in place long enough, they could still be headed for a fight with an uncertain outcome. Or maybe they’ll be replaced by new governments that want to start over again with their own preferred systems.

Or, if they recognize that this peace is too fragile to be of much value, Mr. Wilkinson and his provincial counterparts could start working now on industrial-pricing paths forward with which they could all live – ideally ones that could also get enough cross-partisan acceptance, at both levels, that they won’t soon be abandoned whoever is in power.

It seems a faint hope, based on how things have gone these past few years. But whether they care about the climate or the economy or both, governments need to recognize that each of these stops and starts only sets us further back.

Our Morning Update and Evening Update newsletters are written by Globe editors, giving you a concise summary of the day’s most important headlines. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies