The federal government’s carbon tax in provinces without their own emissions reductions plans will keep rising after 2022 to hit a total of $170 per tonne by 2030 under a major new climate plan unveiled Friday.
Prime Minister Justin Trudeau and several ministers announced the details of how they plan to fulfil the pledge to get the country to exceed its 2030 emissions reductions targets under the Paris Accord.
“During the campaign, our government committed to exceed Canada’s existing 2030 climate target and support new jobs for Canadians,” he said.
“Today, we have delivered our plan to reach that goal. At the same time, we are laying out new, more ambitious targets for the coming years. Canada will continue to lead in the fight against climate change.”
The plan involves billions in new funding for green vehicles and infrastructure, as well as changes to the Clean Fuel Standard set to take effect in late 2021.
But among the most prominent details is clarity on exactly how much the federal government plans to raise the levy on greenhouse gas emissions, which is set to hit $50 per tonne in 2022.
Under the new plan, that price will continue to rise by $15 each year starting in 2023 until it hits $170 per tonne in 2030, while the rebates Canadians get in turn will also rise, and shift from annual to quarterly payments
“The increasing price will make cleaner options more affordable and discourage pollution-intensive investments,” said the government in the 79-page plan.
“A longer price trajectory will allow businesses and individuals to plan ahead, providing predictability for longer-term investments and growing the market for clean solutions in Canada.”
Trudeau emphasized the rebates Canadians get will also increase, with an average family of four in Ontario receiving $1,259 when the price hits $95 per tonne in 2025, going up to $2,018 in 2030.
He noted while Canadians are facing the strain of the coronavirus pandemic, “there is no vaccine against a polluted planet,” but dodged questions on whether he has a backup plan if the Supreme Court sides with the provinces currently challenging the carbon tax at the country’s highest court.
Trudeau pointed to the global business climate and the growing demands of investors for clean technology plans, adding he thinks that business pressure is starting to sway critics.
“Businesses know the opportunities and the revenues and the growth that are going to come from having a strong plan to fight climate change, and indeed we’re beginning to see more and more Conservative premiers are starting to understand that as well,” he said.
“I don’t imagine that it’s because I’ve suddenly convinced them. What I think is starting to convince them is global investors, is people who are looking at whether or not a jurisdiction or a company has a plan to lower their carbon emissions, to move forward on fighting climate change.”
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Government officials speaking in a technical briefing before the announcement suggested there is no backup plan because the government is confident it will win in court.
The current price on carbon translates to Canadians paying roughly an extra 2.3 cents per litre of gasoline, which is set to rise to an extra 12 cents per litre under the $50 per tonne pricing in 2022.
Government officials speaking on background on Friday said the increase in the carbon tax after 2022 would translate to an increase of roughly 27.6 cents per litre from 2022 costs.
That means Canadians can expect to pay roughly an extra 39.6 cents per litre of gasoline by 2030.
Officials would not provide an estimate on the effect the increase would have on home heating costs across the country, noting that will change depending on the energy source and how Canadians use the retrofit incentives being rolled out through the plan.
Also included in the plan is a $3-billion fund for industry to help Canadian companies lower their carbon emissions by implementing things like carbon capture technologies.
Overall, the measures aim to reduce carbon emissions by 32 per cent by 2030.
That slightly exceeds the 2030 Paris targets to reduce emissions by 30 per cent of 2005 levels by 2030.
That estimate, though, is based on limited participation by provinces and if provinces participate with their own new programs, the forecast is the combined emission reduction would jump to 40 per cent.
It comes after the Liberals made a wide range of promises in the September throne speech and in the federal election campaign last fall, including a pledge to exceed the 2030 emissions reductions targets under the Paris Accord, and to get to net zero carbon emissions by 2050.
Those plans also included a promise to ban some single-use plastics by the end of 2021, a move that comes as Canadians are increasingly turning back to using disposable plastics amid the pandemic.
But the government has faced criticism for a lack of detail on exactly how it plans to achieve those goals, and how much the sweeping climate agenda could cost.
This fall, Trudeau announced the government will legislate the targets for reducing emissions.
He acknowledged, however, that plan only works if future governments do not repeal the legislation.
The announcement on Friday comes as the House of Commons prepares to rise after a raucous fall session amid spiking coronavirus cases.
It also comes amid growing concerns about misinformation targeting Canadians online on everything from the safety of vaccines to the Liberal plans to move toward a green economy.
— More to come.