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

B.C. Finance Minister Selina Robinson outlines the province’s three-year budget in Victoria, April 20, 2021. (B.C. government video)
B.C. deficit to grow by $19 billion for COVID-19 recovery spending

Pandemic-year deficit $5 billion lower than forecast

DOH
Provincial grant tapped to finance downtown project

Butler and 10th next on improvement list

RDBN. (Priyanka Ketkar photo/Lakes District News)
Houston Soccer club. (Submitted/Houston Today)
Houston Soccer gets record number of registrations

Club will have a soccer season amidst COVID restrictions

District of Houston
Safe Restart grant spending firmed up

Will help cover losses from recreation fees

A large crowd protested against COVID-19 measures at Sunset Beach in Vancouver on Tuesday, April 20, 2021. (Snapchat)
VIDEO: Large, police-patrolled crowds gather at Vancouver beach for COVID protests

Vancouver police said they patrolled the area and monitored all gatherings

FILE – RCMP officers wearing face masks to curb the spread of COVID-19 stand by as protesters opposed to the Trans Mountain pipeline expansion block rail lines, in Burnaby, B.C., on Friday, November 27, 2020. THE CANADIAN PRESS/Darryl Dyck
‘Very scary’: B.C. travel rules too vague, shouldn’t involve police, civil liberties group says

BCCLA said that speaking with communities could have avoided top-down approach

Ocean Legacy Foundation members conduct a shoreline pollution cleanup in Vancouver. (OLP)
It’s time to end ‘suffocating’ plastic pollution along B.C. shorelines, advocates urge

This Earth Day, Ocean Legacy Foundation is launching a free educational platform to educate the public about plastic pollution

A teacher-librarian in Nanaimo was fired in 2019 for checking out an age-inappropriate graphic novel to a student. The discipline agreement was published Wednesday, April 21. (News Bulletin file photo)
B.C. teacher-librarian fired for checking out too-graphic graphic novel to student

Teacher had been previously disciplined and suspended on two occasions

Former University of Victoria rowing coach Barney Williams is photographed in the stands during the Greater Victoria Invitational at CARSA Performance Gym at the University of Victoria in Victoria, B.C., on Friday, November 29, 2019. THE CANADIAN PRESS/Chad Hipolito
Former B.C. university rowing coach ‘deeply sorry’ after complaints

Barney Williams says he’s been committed to ensuring no other member of the roster had a similar experience

Aria Pendak Jefferson cuddles ChiChi, the family cat that ran away two years ago in Ucluelet. The feline was missing until Courtney Johnson and Barry Edge discovered her in the parking lot of the Canadian Princess earlier this month. Aria and her parents were reunited with ChiChi in a parking lot in Port Alberni. (SUSAN QUINN/ Alberni Valley News)
B.C. girl’s wish granted as her cat came back, two years later

Courtenay family reunited with cat that went missing in Ucluelet in 2019

(Bandstra Transportation photo)
Smithers family-owned business institution sold to publicly-traded company

Bandstra Transportation and Babine Trucking acquired by Mullen Group

FILE – The Instagram app is shown on an iPhone in Toronto on Monday, March 19, 2018. THE CANADIAN PRESS/Graeme Roy
Judge acquits B.C. teen boy ‘set up’ on sex assault charge based on Instagram messages

The girl and her friends did not have ‘good intentions’ towards the accused, judge says

Most Read