Nova Scotia to introduce cap-and-trade in 2018

WATCH ABOVE: Premier Stephen McNeil announced that his government will impose a cap-and-trade system in Nova Scotia 2018. There are no details on the cost of the system and few details on how it will be rolled out. Global's Marieke Walsh looks at the impact for consumers.

Premier Stephen McNeil announced his government will bring a price on carbon to Nova Scotia in 2018.

In a joint federal-provincial announcement, McNeil said a cap-and-trade system will be introduced across all sectors of the Nova Scotia economy sometime in 2018. The government will set a cap that companies will have to stay below unless they are willing to pay more in order to pollute more.

“We’re proud to announce a cap and trade system inside of our province that will allow us to continue to build a system that works for our province, our economy, and the businesses that are here,” McNeil said.

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Joined by federal Environment and Climate Change Minister Catherine McKenna, the two also announced an equivalency deal that will make Nova Scotia exempt from a new federal rule to phase out coal-fired power by 2030.

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In October, Prime Minister Justin Trudeau gave provinces an ultimatum to introduce a price on carbon by 2018 or have one imposed on them. At the time Nova Scotia Environment Minister Margaret Miller walked out of meetings with McKenna, saying Nova Scotia felt let down and surprised.

Less than two months later Miller said the cap-and-trade system announced Monday shows Nova Scotia “never really ever left the table.”

Cap-and-trade system won’t partner with Quebec and Ontario

Nova Scotia won’t integrate its cap-and-trade system with the system already being developed in California, Quebec, and Ontario. At a technical briefing prior to the announcement staff from the environment department said restricting the cap-and-trade system to Nova Scotia will give the province more “control.”

The province won’t charge companies for the credits awarded to each company that will make up their total cap. Instead, staff said the credits will be given at no cost and then companies will have to purchase additional credits if they pollute more than their designated amount.

READ MORE: Nova Scotia ‘on the front lines of climate change’: activist

Environment department staff said the cap that Nova Scotia Power is already operating under will stay in place and other caps will be rolled out across the transportation, infrastructure, and home heating sectors.

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How much credits will cost and who will regulate the system is still to be determined. It’s also not clear when the system will be rolled-out.

Economic impact unclear

Officials at the technical briefing could not explain the potential economic impact of a cap-and-trade system and also couldn’t say how much it will cost consumers.

McNeil said the new system will have “limited to no impact on consumers.”

The base cost the federal government said it wanted was $10 a tonne in 2018, to increase to $50 a tonne by 2022. Staff said all of the details on what that means for Nova Scotia companies still needs to be negotiated.

But the Canadian Taxpayers Federation says consumers should expect to pay more under the new carbon pricing system. “Make no mistake, taxpayers will pay more under this provincial cap and trade system but it appears as it won’t be as painful as the federal carbon tax,” Atlantic Canada Director Kevin Lacey said in an emailed statement.

Ecology Action Centre awaits more details

The Ecology Action Centre’s Stephen Thomas says he is reserving judgement on the carbon pricing plan until he see the full details.

“This sends the right signal but I think we’re missing a lot of the key details that make this a good plan or a bad plan,” Thomas said.

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Progressive Conservative Leader Jamie Baillie slammed the carbon pricing system, calling it a “dark day.” He said he expects Nova Scotia’s cost of living to increase because of the plan. The provincial NDP were not at the announcement and did not send out a press release responding to the news.