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Most provinces non-committal on Ottawa’s revenue-neutral carbon plan

Will provinces make the new carbon tax revenue neutral?
WATCH ABOVE: Will provinces make the new carbon tax revenue neutral?

The federal government’s carbon price plan, announced this week in Ottawa, will have different consequences for taxpayers depending where you live.

That’s because few provinces, at this point, will commit to making their carbon tax plan revenue neutral.  In other words, they won’t commit to making corresponding tax cuts for any new revenue they get because of a carbon tax.

Global News surveyed each province to see whether they’ll offset the new tax with corresponding cuts.

READ MORE: Ottawa’s carbon plan tougher on provinces without hydro resources: economist

B.C.’s current carbon pricing plan is already revenue neutral while New Brunswick has committed to the same.

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Quebec, Ontario and Alberta won’t commit to revenue neutrality, while spokespeople for the governments of Manitoba, Prince Edward Island and Newfoundland insisted those provinces weren’t ready to say either way.

WATCH: Breaking down the meaning of a carbon tax

Breaking down the meaning of a carbon tax
Breaking down the meaning of a carbon tax

Saskatchewan and Nova Scotia are both oppose the idea of a carbon tax.

The federal government doesn’t want to get involved. Finance Minister Bill Morneau says provinces will have total control over what to do with any revenue from a carbon tax.

“It is up to them to think of how best they can use those funds,” Morneau told reporters in Ottawa.

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But the opposition thinks Liberals should and could force provinces to take the financial sting out of a new carbon tax, and mandate revenue neutrality.

READ MORE: Provinces will have to accept Liberal carbon tax, say experts

“The prime minister should be sitting down with the provinces and saying listen, whatever scheme you come up with ensure taxpayers are respected,” Conservative MP Ed Fast told Global News. “That this money doesn’t just go to pet political projects.”

The idea of a price on carbon didn’t come out of the blue for provinces, which all signed on to the Paris climate agreement late last year. It’s reasonable to expect they’d have some sort of a plan for the extra revenue such a tax will generate, and some do have a plan.

WATCH: Carbon price cost being calculated in Saskatchewan

 

Carbon price cost being calculated in Saskatchewan
Carbon price cost being calculated in Saskatchewan

Quebec, for example, puts the money from its current pricing scheme into a Green Fund, and Ontario plans to invest in sustainable energy projects.

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But Youri Chassin, an economist with the Montreal Economic Institute, says the best way to make a price on carbon palatable is through revenue neutrality; specifically cuts to income and business taxes.

“People are going to be more amenable to the idea if they see that they’re getting something back in return,” Chassin said in an interview. “It makes it a better sell…for the government”

But a tough sell, likely, with only two provinces promising to protect taxpayers.