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Finance Canada Paper Suggests Continuing Increases in Federal Carbon Price

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While Environment and Climate Change Minister Catherine McKenna says there’s been no decision yet on the future of Canada’s floor price on carbon after it hits $50 per tonne in 2022, a Finance Canada paper circulated this week by Alberta’s United Conservative Party suggests future increases could be on the way.

The paper says the broad strategy of setting a federal “backstop” for provincial carbon pricing programs will be opened up for review four years from now “to confirm the path forward, including continued increases in stringency in future years.”

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While the floor price is widely expected to increase beyond 2022, the Globe and Mail notes, “a post-2022 price road map has not been clearly laid out by Ottawa.

The Pembina Institute is calling for a predictable schedule of increases between 2022 and 2030, and “various economic models have shown that Canada will need carbon prices of $150 a tonne or more to meet the target of reducing emissions by 30% below the 2005 level by 2030,” the Globe adds.