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Liberals to ease carbon tax amid fears over competitiveness

Ottawa to relax carbon tax over competitiveness concerns
WATCH: Ottawa has unveiled a major walk-back to the federal carbon tax plan. In a move to stay competitive, industries will pay tax on a lower emission rate. Abigail Bimman explains what it means and who is affected.

Fears that Canadian businesses will struggle to compete under the upcoming Liberal carbon tax targets appear to have prompted the government to ease new rules set to go into effect next year.

According to an update on the carbon pricing policy quietly posted online last week and first reported on Wednesday by the Globe and Mail, Environment and Climate Change Canada is setting out new guidelines for how much emissions can be put out by businesses before they have to start paying for the pollution.

READ MORE: Is a carbon tax Canada’s best option to help the environment?

Under the old rules, proposed in January 2018, industries in Canada in provinces without their own carbon pricing plans would have to start paying once they exceeded the 70 per cent benchmark for average emissions.

The new rules, however, will only require polluters to pay if they exceed the 80 per cent benchmark.

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As well, four industries the government deems “to be in a high competitive risk category” will only pay if they exceed 90 per cent of their average industrial emissions. Those industries are cement, iron and steel manufacturing, lime and nitrogen fertilizers.

“Based on extensive engagement, we are updating our proposed approach to setting the output-based standards,” the assessment reads.

“We will continue to refine the standards in the coming weeks, and are publishing this preliminary assessment to seek feedback from stakeholders.”

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Ontario throne speech: Ford government committed to scrapping carbon tax
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The new rules will still come into effect on Jan. 1, 2019.

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They will apply to any province or territory that requests them or in any that fail to put their own equivalent measures in place.

For more than a year, federal Conservative critics have argued that imposing a carbon tax will hurt Canadian businesses and force them to pass on costs to consumers.

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Carbon tax hurting Canadian families: Pierre Poilievre
Carbon tax hurting Canadian families: Pierre Poilievre

At the same time, U.S. President Donald Trump has moved forward with a series of tax cuts for corporations and imposed protectionist tariffs on trading partners including Canada.

Canadian steel is facing a 25 per cent tariff while aluminum faces one at 10 per cent.

On July 1, the federal government announced $16.6 billion worth of retaliatory tariffs taking aim at American steel, aluminum and a variety of other household goods and foodstuffs.

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LISTEN: DANIELLE SMITH TALKS ABOUT SOFTENING CARBON TAX