Author by :John Chilibeck and Adam Huras/Legislature Bureau
Photo by : Adam Huras/Legislature Bureau
After the election, if the Liberals form the government again, there will be an increasing fee on gas to cover the loss of the revenue. They are not going to continue to whittle away revenue from the gas tax. – David Coon
Federal Environment Minister Catherine McKenna took to social media Wednesday night to criticize New Brunswick’s new climate change plan, suggesting it likely won’t meet Ottawa’s standards.
FREDERICTON and OTTAWA • Federal Environment Minister Catherine McKenna says New Brunswick’s new climate change plan “does not create a new incentive to cut carbon pollution,” suggesting it likely won’t meet Ottawa’s standards.
Serge Rousselle, New Brunswick’s minister responsible for the environment, introduced a bill inside the legislature Thursday to create a climate change fund, but one that wouldn’t see New Brunswickers pay more at the pumps.
Instead of a new tax, the province announced it will simply use revenues from the existing provincial portion of fuel taxes and put them toward the new fund.
The move was an effort to meet the federal government’s call for addition measures to combat climate change.
Ottawa has said the provinces must introduce a price on carbon pollution of $10 per tonne by next year.
If they don’t meet that standard, Ottawa will impose its own measures.
It appears New Brunswick’s efforts might fall short.
“I was really happy to see significant new investments in energy efficiency in their plan,” McKenna said in a statement posted to her social media accounts. “Wasting less energy is win-win – it saves people money and cuts carbon pollution.”
She also welcomed the province’s plan to phase out its only coal fired plant, while also turning to the federal government to put a carbon price on heavy industry.
But the praise stopped there.
“However, New Brunswick proposes to take revenues from existing fuel taxes and invest them in climate action instead of putting a price on carbon across the economy, which does not create a new incentive to cut carbon pollution,” McKenna said. “Investing in climate action is great – but a carbon price does more than that.
“It also changes economic decisions by sending a price signal that wasn’t there before. That price signal makes pollution more expensive and rewards clean innovation.”
McKenna then echoed comments from her department given over the last few days that the federal government will be testing each provinces approach against its own standard next year.
“If a jurisdiction’s approach doesn’t meet our benchmark, we will apply our federal option there,” she said. “Carbon pricing is one of the best tools we have to tackle climate change.
“That’s why it’s a key part of Canada’s clean growth and climate plan.”
Rousselle said on Thursday that it would be unfair to tax drivers more when they don’t have many transportation options.
“If we put two cents more a litre on gas taxes, would that have made a difference in encouraging people not to use their cars?” Rousselle told reporters at the legislature. “We’re in a rural province where people drive a lot, and that has to be taken into account.”
The biggest opposition party in the house, the Progressive Conservatives, derided the plan, describing it as a game the Liberals were playing in the 2018 election year, when it can least afford foisting extra costs on voters who have already put up with a host of tax increases under the Gallant regime.
“What they’re doing is not an incentive to reduce emissions,” Tory critic Bruce Fitch told reporters. “If someone wants to help the environment now, they have to drive their car more. That’s counter-productive.”
Right now, New Brunswick consumers are charged 15.5 cents a litre for gasoline and 21.5 cents per litre of diesel in provincial taxes whenever they fuel up.
Under the new measures that will begin April 1, a small portion of the revenues generated from those taxes will go toward the climate change fund – in the case of gasoline, it will be the equivalent of about two cents per litre, and in the case of diesel, closer to three cents. All told, it’s estimated the revenue haul will be about $37 million for the new fund in its first year.
Rousselle had insisted this will meet the federal requirement of charging $10 for each tonne of carbon emitted by the end of 2018.
As the federal requirements become stricter, the province will dedicate a bigger proportion of the revenues to the climate change fund. By 2022, it says most of the revenues generated by gas taxes will be put there.
By then, a new federal requirement will also be imposed on big industry. The province estimates revenues from both industry and gas taxes will be around $180 million, all of it available for climate change programs that have not been spelled out in detail yet. Up until now, the provincial portion of fuel taxes has gone toward the New Brunswick government’s general revenues.
Green Party leader David Coon questioned how the government could forsake all the gas tax revenues it normally uses for other initiatives, such as supporting education and health care or trying to balance the books.
“It doesn’t make any sense,” Coon told reporters. “This doesn’t price carbon.”
He predicted a tax hike was still coming.
“After the election, if the Liberals form the government again, there will be an increasing fee on gas to cover the loss of the revenue. They are not going to continue to whittle away revenue from the gas tax.”
When asked how the province would replace the lost revenues, Rousselle expressed confidence his government could make up the difference over the years with sustained economic growth.
“We’ve already succeeded in reducing the deficit by 67 per cent over the last three years, while making record investments in health and education,” the minister said. “I have no reason to believe we won’t continue to hit our targets.”
The province has decided to steer clear of putting a price on carbon for industry. Instead, it will avoid the cost of administering a new program by letting Ottawa impose its own regime that will set a baseline for big industrial emitters.
Justin Trudeau’s federal Liberal government has promised to rank companies against their peers.
Emitters that go above a set target will have to pay fines, while those below would earn credits they could sell.
Some industries have been left totally exempt from a carbon price, such as the forestry and mining sectors.
“It’s a made-in-New Brunswick solution,” Rousselle said. “We don’t want to hurt our economy.”
Lois Corbett, executive director of the Conservation Council of New Brunswick, predicted New Brunswick’s plan would not meet Ottawa’s test of charging people $10 a tonne for carbon by the end of the year. The Trudeau government has threatened to impose its own carbon tax if provinces fail to do so. They are supposed to be charging $50 a tonne by 2020.
“A repurposing of the gas tax account doesn’t rise to the challenge or the urgency of the issue we’re trying to deal with,” the environmentalist said Thursday. “New Brunswickers are already experiencing the impact of climate change, whether it’s ice storms or hurricanes or floods, so we know it’s right here and we have to change behaviour.”