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Afternoon rush hour traffic moves across the Angus L. Macdonald bridge in Halifax. Nova Scotia Premier Stephen McNeil says the federal plan would increase already high pump prices in the province. (Paul Darrow For The Globe and Mail)
Afternoon rush hour traffic moves across the Angus L. Macdonald bridge in Halifax. Nova Scotia Premier Stephen McNeil says the federal plan would increase already high pump prices in the province. (Paul Darrow For The Globe and Mail)

Premiers draw battle lines as Trudeau seeks support for carbon-pricing plan Add to ...

Key provincial premiers dug in their heels over the Liberal government’s carbon-pricing plan on Tuesday as Prime Minister Justin Trudeau began seeking support among other provinces for his approach to fighting climate change.

Nova Scotia Premier Stephen McNeil said on Tuesday that the federal plan would increase pump prices for rural residents who have to drive everywhere, while Saskatchewan’s Brad Wall took his fight to social media, accusing Mr. Trudeau of reneging on a campaign promise by announcing he will impose a carbon-price plan on provinces that do not implement their own.

Prime Minister Justin Trudeau fired back, saying Canadians want Ottawa to show leadership in the fight to reduce emissions of greenhouse gases, and that his plan gives provinces and territories the flexibility to design their own systems so long as they meet national standards.

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Mr. Trudeau is eager to win over the four Liberal premiers in Atlantic Canada, who have no ideological opposition to government intervention or higher taxes but worry about getting re-elected. The Prime Minister is more comfortable battling with Mr. Wall, who has taken a hard line on such a tax, saying it would devastate his province’s economy.

Mr. Trudeau issued an ultimatum to premiers on Monday, announcing their provinces must adopt either a tax on emissions or a cap-and-trade system by 2018 or Ottawa will impose one on those that do not.

The levy will start at a minimum of $10 a tonne and reach $50 a tonne in 2022. The revenue will be returned to the provinces and territories, and the Liberals said on Tuesday that the provinces can use the money to cut other taxes and offset the cost of the carbon levy.

“This is right for the economy, right for the environment and it’s about time Canada had leadership on this file,” Mr. Trudeau said.

After consulting other governments for nearly a year on climate strategy, the Liberal government is setting down some clear markers ahead of a first ministers’ meeting in December at which the Prime Minister hopes to conclude a pan-Canadian climate strategy.

Mr. Trudeau is taking a political gamble, buoyed by a weekend poll that showed a strong majority of Canadians want federal leadership on climate change. His Liberal government could end up defending higher federal energy taxes in several provinces if he cannot persuade premiers to create their own carbon-pricing plans. Provincial governments could then grab political credit for cutting other taxes – such as personal income taxes – with the revenues from the federal carbon levy.

On Tuesday, the Prime Minister spoke by phone with Mr. Wall after the premier called him out on Facebook and Twitter. Mr. Trudeau expects to speak with other premiers in the coming days, his spokeswoman Kate Purchase said.

Meanwhile, Conservatives in the House of Commons hammered away on the anti-carbon-tax position that has been a hallmark of the party since it was in power.

“A carbon tax is a bad idea and Canadian taxpayers will be the ones paying the tab,” Conservative deputy leader Denis Lebel said in the Commons on Tuesday. He said the Liberals should “let the provinces make their own decision in their own jurisdictions.”

Under the Liberal plan, provinces that have carbon taxes – currently British Columbia and Alberta – must increase them to $50 a tonne by 2023 – which equals 11 cents per litre of gasoline. Provinces with cap-and-trade plans, such as Quebec and Ontario, have to cut their emissions in line with Canada’s international commitment of a 30-per-cent reduction below 2005 levels by 2030.

Three Atlantic provinces – Newfoundland, New Brunswick and Prince Edward Island – are determining what climate strategy they want to pursue, while Nova Scotia has aggressively cut its emissions in the electricity sector but is balking at a carbon-pricing plan that would include gasoline and natural gas. Manitoba’s recently elected Progressive Conservative government also says it is reviewing its options.

Mr. McNeil said Nova Scotia is leading the country in emissions reductions, and is on track to cut greenhouse gases by 46 per cent from 2005 levels by 2030. But the province already has high pump prices and he told a CBC morning show in Halifax on Tuesday he does not want to levy more taxes on gasoline.

“Nova Scotians have been punching above their weight when it comes to reducing our carbon footprint,” Mr. McNeil said. “What we need to make sure is that the national government recognizes that. We believe it still makes sense that we put in place regulations that allow us to achieve that target.”

But he said he will not do it by increasing gasoline taxes on rural Nova Scotians. “Increasing the taxation will not deny the fact that you still need to drive, the premier said. “That means individual households will take that money from some other budget and it will not achieve the overall objective, which is the reduction of greenhouse gases.”

Ottawa has made a concerted effort to woo Atlantic provinces on the issue, provincial sources say.

Federal Liberals won all the seats in Atlantic Canada in 2015, but voters in the region can turn massively, as the party found out 20 years ago, under prime minister Jean Chrétien, when they lost two-thirds of their seats there after unpopular changes to unemployment insurance.

Senior federal Liberal ministers from Saskatchewan and Nova Scotia defended the carbon-price plan on Tuesday, saying it gives the provinces flexibility while ensuring all regions do their part in meeting national targets.

“Our government recognizes that Nova Scotia has taken a regulatory approach to reducing GHGs in its electricity system,” said Treasury Board President Scott Brison, who represents Kings-Hants in the province. “There may be an opportunity for that to be taken into account in a carbon-pricing mechanism designed by the province of Nova Scotia.”

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