A flare stack lights the sky from the Imperial Oil refinery in Edmonton on December 28, 2018. THE CANADIAN PRESS/Jason Franson

A flare stack lights the sky from the Imperial Oil refinery in Edmonton on December 28, 2018. THE CANADIAN PRESS/Jason Franson

Hiking carbon tax to $210 cheapest way to hit Canada’s climate targets: commission

The federal price is at $20 per tonne now, and is going up $10 a year in each of the next three years

The Ecofiscal Commission says quadrupling Canada’s carbon price by 2030 is the easiest and most cost-effective way for the country to meet its climate targets.

But the independent think-tank also warns that might be the toughest plan to sell to the public because the costs of carbon taxes are highly visible.

The commission is issuing its final report today after spending the last five years trying to prove to Canadians we can address climate change without killing the economy. The report looks at the options for Canada to toughen climate policies to meet the 2030 goal of cutting greenhouse-gas emissions by almost one-third from where they are now.

The choices include raising the carbon price, introducing new regulations and adding subsidies to encourage and reward greener, cleaner behaviour.

The report concludes that all of those can reduce emissions but that carbon pricing stands out for doing it with the lowest cost to consumers while permitting the most economic growth. It adds that the economic benefits of carbon pricing become even greater if the revenues are returned to Canadians through corporate and personal income-tax cuts, rather than direct household rebates as is done now.

Commission chair Chris Ragan said hiking the carbon price $20 per year between 2022 and 2030, until it hits $210 per tonne, would get Canada to its targets under the Paris Agreement on cutting emissions. That would be on top of the $50-a-tonne price on carbon emissions that will be in place by 2022.

The federal price, in provinces where it applies, is at $20 per tonne now, and is going up $10 a year in each of the next three years.

Rebates would also grow to keep the tax revenue-neutral, the commission said.

The federal Liberals have promised to review the carbon tax in 2022 to determine what happens to it, but have been noncommittal about what that might be.

Canada’s federal tax is only applied in provinces without equivalent provincial systems. Right now those are Saskatchewan, Manitoba, Ontario and New Brunswick. Alberta will be added in January.

Ragan said regulations and subsidies would also work to cut emissions but are more expensive. Governments lean on regulations and subsidies, however, because their costs are often less visible to voters, making them more politically palatable, at least at first. They still distort the economy, he said, just not as obviously.

“It’s crazy to use high-cost policies if you know that lower cost policies are available,” he said. ”Why would we do that?”

Carbon prices can include fuel taxes and cap-and-trade systems where emissions are restricted and credits must be purchased to emit anything beyond the cap.

Regulations can be either very specific, such as requiring agricultural producers to capture methane from manure or cities to capture methane from landfills, or broad, such as telling industrial emitters they have to find a way to cut emissions in half by a certain date. Subsidies can mean helping people or companies install more efficient lighting and appliances or to buy electric vehicles.

Canada’s current policies are a mix of all three.

Under the Paris accord, Canada committed to cutting greenhouse-gas emissions to 511 million tonnes by 2030. In 2017, the most recent year for which data is available, Canada emitted 716 million tonnes.

A year ago, Environment and Climate Change Canada said its existing platter of policies leaves the country 79 million tonnes short. Earlier this month the international Climate Transparency organization said Canada was among the three members of the G20 group of big economies that are least likely to hit their 2030 climate targets.

READ MORE: B.C. provided $830M in fossil fuel subsidies in 2017-18: report

Mia Rabson, The Canadian Press


Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Administering naloxone to a person experiencing a benzo-related overdose event won’t help. Naloxone is used to neutralize opioids. (Jenna Hauck/The Progress file photo)
Northern Health warning drug users of potential benzo contamination

The drug does not respond to naloxone, and is being included in street drugs

(BC Hydro photo)
BC Hydro planned power outages to darken downtown Smithers for most of day Sunday, Jan 17

Replacement of poles will affect approximately 250 customers in downtown core from 10 a.m. to 4 p.m.

Smithers Local Health Area reported 25 new cases of COVID-19 Jan. 3 - 9. (BC CDC graphic)
Weekly new cases of COVID-19 rise to 25 in Smithers LHA Jan. 3 – 9

Northern Health reported 49 new daily cases for 497 active, 44 hospitalized, 13 in critical care

Syringe is prepared with one of B.C.’s first vials of Pfizer vaccine to prevent COVID-19, Victoria, Dec. 22, 2020. (B.C. government)
B.C.’s COVID-19 caseload stays steady with 465 more Tuesday

No new outbreaks in health care facilities, 12 more deaths

New Westminster TV production designer, Rick Whitfield, has designed an office in a box for British Columbians in need of a private workspace. (BC Box Office photo)
PHOTOS: B.C. man designs ‘box office’ solution for those working from home

‘A professionally designed workspace on your property, away from the distractions of home’

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Chilliwack ER doctor Marc Greidanus is featured in a video, published Jan. 18, 2021, where he demonstrates and describes effectiveness of various styles of masks. (Youtube)
VIDEO: Emergency room doctor runs through pros and cons of various masks

‘We’ve been asked to wear a mask and it’s not that hard,’ Greidanus says.

(Pixabay photo)
VIDEO: Tip to Metro Vancouver transit police helps woman 4,000 km away in Ohio

Sgt. Clint Hampton says transit police were alerted to a YouTube video of the woman in mental distress

A woman types on her laptop in Miami in a Monday, Dec. 12, 2016, photo illustration. THE CANADIAN PRESS/AP/Wilfredo Lee
British Columbia government lax on cybersecurity practices, auditor reports

The audit did not highlight a specific threat, but it found breaches in cybersecurity are increasing globally

Cranbrook Food Bank coordinator Deanna Kemperman, Potluck Cafe Society executive director Naved Noorani and Sunshine Coast Community Services Society executive director Catherine Leach join B.C.’s new Municipal Affairs Minister Josie Osborne on a video call about B.C. gaming grants, Jan. 19, 2021. (B.C. government)
B.C. gaming grants reorganized for COVID-19 priorities

Minister highlights community kitchens, food banks

(Pixabay photo)
‘Cocaine bananas’ arrive at Kelowna grocery stores after mix up from Colombia: RCMP

Kelowna RCMP recently concluded an international drug investigation after finding cocaine in local grocers’ banana shipments in 2019

A new video from NCCIH and BC Northern Health titled ‘Healing in Pandemic Times: Indigenous Peoples, Stigma and COVID-19’ was animated by Joanne Gervais. (Photo Provided By: NCCIH Archives)
VIDEO: Stigma against Indigenous people is a ‘social sickness’

A new short animated video is aiming to educate the public on the stigmatization

Most Read