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Politics Trudeau Liberals’ national climate deal to have big price tag for Canadians

Indigenous and Northern Affairs Minister Carolyn Bennett looks on as Minister of Environment and Climate Change Catherine McKenna, right, responds to a question during a media availability at the First Ministers' Meeting in Ottawa, Friday, December 9, 2016. THE CANADIAN PRESS/Adrian Wyld

The Canadian Press

Canadians will pay billions of dollars more a year to fundamentally change the way the country produces and consumes energy as a result of the new pan-Canadian climate deal.

Both Ottawa and the provincial governments have laid out a portion of the costing for emission-reduction measures including carbon pricing, and the tally – through private and public spending – reaches in the multibillions of dollars per year.

In defending the agreement signed late Friday, federal Environment Minister Catherine McKenna argues the higher costs represent an investment in the economy as the global economy transitions to a low-carbon future to combat climate change.

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"Our perspective is that this makes us more competitive not less," Ms. McKenna said Sunday on CTV's Question Period. "That's why businesses across Canada have said to put a price on [carbon] pollution – that will make us innovate, it will significantly reduce emissions and it will make us more competitive."

She noted large economies such as China are moving aggressively to cut their greenhouse-gas emissions, creating a massive market for clean technology, which Canada can then sell to the world.

Ms. McKenna has also argued that Canada has an obligation to reduce greenhouse-gas emissions as part of the global effort to avert a climate catastrophe that would impose a terrible burden on future generations, both economical and environmental.

Federal, provincial and territorial leaders who signed onto the "pan-Canadian framework on clean growth and climate change" endorsed the target of reducing GHGs by at least 30 per cent below 2005 levels by 2030.

At the core of the agreement is Prime Minister Justin Trudeau's national carbon-pricing plan, which requires all provinces to have a carbon price in place by 2018, or face a federal levy of some kind. Provinces can either adopt a carbon tax that would rise to $50 per tonne by 2022, or a cap-and-trade system that would have to meet federal emission-reduction standards.

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Saskatchewan Premier Brad Wall and Manitoba Premier Brian Pallister refused to sign the deal. Mr. Wall rejects carbon pricing outright, while Mr. Pallister – who has promised a "made-in-Manitoba" carbon price – withheld support until he can get a better deal on federal health-care transfers.

Overshadowed by the spat over carbon pricing is that the governments agreed to a plethora of complementary measures to reduce emissions in the electricity sector, industry, transportation and buildings. They include: a plan to virtually phase out traditional coal-fired power by 2030; regulations requiring the oil and gas industry to cuts its methane emissions by up to 45 per cent by 2025; regulations and subsidies to encourage the use of electric vehicles, and tougher building codes by 2030 that will require all homes built to be energy self-sufficient.

The long-term goal is to achieve deep reductions in carbon emissions by 2050 through eliminating fossil-fuel use in the electricity system, dramatically improving energy efficiency in industry, transportation and buildings, and then using clean electricity to supply the energy that is needed.

Conservative environment critic Ed Fast complained the federal government has not released a full costing of the pan-Canadian framework, nor any analysis as to its impact on jobs. Mr. Fast said the carbon pricing will make the Canadian economy less competitive at a time when U.S. president-elect Donald Trump wants to ease regulatory burdens on industry and lower corporate taxes.

Canada's proposed regulatory measures do not have any costs or benefits identified – they would generally result in higher upfront costs for homes and vehicles, for example, that would be paid for with energy savings over time.

But the governments have laid out some costing for emission-reduction measures. The federal government alone pledges to spend $3.7-billion over the next several years to support the adoption of emission-reduction technology in the resource sector; on grants and loans for the clean-technology startups, and on the revision of building codes. It also pledged $81-billion over 11 years in infrastructure spending for public transit, more efficient cities, rural and remote communities and green infrastructure.

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Alberta's New Democratic Party government says its carbon-pricing plan will raise $9.6-billion over five years, though $3.4-billion of that will be rebated to consumers. That price does not include the potential for higher electricity bills as it shifts off coal. Ontario has estimated that it will collect between $6-billion and $8-billion from its cap-and-trade plan over the next five years, much of it from higher costs for gasoline and natural gas for home heating.

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