Canada’s Carbon Price Plan Will Look a Lot Like Alberta’s
The Canadian government will adopt key features of Alberta’s carbon tax-and-rebate program to extend its promised national carbon price to provinces that do not initiate their own pricing policy by next year, Canadian Press reports, citing an advance draft of the plan.
So far, the premiers of Saskatchewan, Manitoba, Nova Scotia, and the northern territories, have indicated varying degrees of resistance to the carbon price commitment contained in the Pan-Canadian Climate Framework agreed among the First Ministers last December. (Nova Scotia’s Stephen McNeil faces a general election vote on May 30.) But Ottawa had warned that it will step in where province or territories fail to act.
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Elements of the Alberta model that are being carried over to the federal fallback plan, CP reports, include “rebate payments sent directly to low- and middle-income individuals.”
Prime Minister Justin Trudeau and Environment Minister and Climate Change Catherine McKenna “have always said any revenue from a carbon tax would remain in the province where it is raised,” the news agency adds. “But they have been careful not to say it would go to the provincial government. By following the Alberta model, the federal government can send some of the money raised by the tax to individuals, bypassing provincial governments which refuse to impose their own carbon price.”
Alberta applies a tax on the carbon in most off-farm transportation and heating fuels. It divides the revenue among income-based rebates to Albertans of up to $450 per household, a reduced small business tax, and investments in clean infrastructure.
Alberta, British Columbia, Ontario, and Quebec—representing the great majority of the Canadian population and economy—had all established some form of carbon pricing by the time the Pan-Canadian Framework was finalized. Under the federal-provincial plan, those prices must amount to at least $10 per tonne by 2018 (lower than the current price in either B.C. or Alberta), and rise to $50 per tonne by 2022.