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Canada to soften carbon tax as firms fret about U.S….

05 August 2018

Environment Canada also now has to consult on the proposed plan with more than a dozen industrial sectors specific to Ontario that weren't originally expected to be affected by the federal carbon pricing program because Ontario had its own system - now scrapped by Doug Ford's new provincial government.

The change only reduced the amount that heavy emitters or large corporations have to pay on emissions, but did nothing for Canadian households, said Moe.

In "a small number of sectors", the limit will be even higher and allow emissions up to 90 per cent of the industry average. While Mr. Ford has said he is committed to reducing greenhouse gas emissions, the Premier and his environment minister have ruled out any use of taxes to do so.

"Our two provinces are united in the belief that a federal carbon tax is an ineffective policy that will not significantly reduce emissions and will instead make life unaffordable for families, and that it is unconstitutional for the federal government to impose a carbon tax on certain provinces based on their evaluation of provincial climate change policies", the statement read.

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The Liberals took power on a promise to improve the previous government's environmental record, announcing a year after it took power that all provinces and territories would have to introduce carbon pricing - a carbon tax or cap and trade system - or face having one imposed.

Dennis Darby, president of the Canadian Manufacturers and Exporters lobby group, said the government's plan to trim the carbon levy was prudent.

However he said the lighter burden should help industry but doesn't reduce the burden the carbon price will place on individual consumers.

Anything beyond that raises the cost to business without changing behaviour, and that's where companies start looking to move to jurisdictions with lower taxes. "The economy in Saskatchewan is different than the manufacturing economy in Ontario, and is different than economies of Atlantic Canada", Moe said.

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Speaking at Queen's Park, Mr. Phillips said that a carbon tax was only a "cash grab".

In May Cement Association of Canada vice-president, Adam Auer, urged a senate committee on the carbon tax framework "to be attuned to the reality that our competitors in import and export markets don't have similar pricing systems". With the case possibly headed from there to the Supreme Court, Moe said it was unlikely there would be a decision ahead of the January implementation date for the carbon tax.

Taxing above 10 to 20 per cent would hurt a company's ability to innovate and find a viable solution, Elgie said.

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Canada to soften carbon tax as firms fret about U.S….