On December 11, the federal government released its highly-anticipated new climate plan, A Healthy Environment and a Healthy Economy, announcing 64 policy measures costing $15 billion. The Plan addresses energy, energy efficiency, infrastructure, transportation emissions, the Clean Fuel Standard, an adaptation strategy – and a centrepiece policy to increase the carbon tax by $15 a tonne each year for the next eight years, as summarized by the CBC in “Ottawa to hike federal carbon tax to $170 a tonne by 2030 “. Taken with the proposed Canadian Net-Zero Emissions Accountability Act currently before Parliament, which formalizes Canada’s target of net-zero emissions by the year 2050, A Healthy Environment and a Healthy Economy lays out the most specific path forward for Canada since the 2016 Pan-Canadian Framework in 2016.
A Backgrounder is here, and specific initiatives are explained in Annex documents here. One missing piece, as pointed out in Unifor’s reaction to the new Plan: the previously-promised Just Transition Act. Also missing: the slightest notice by the international press, even the normally climate-vigilant Guardian in the U.K. Reaction within Canada was strong, and ranged widely (compiled by the CBC here). In the mainstream media, the conservative-leaning Globe and Mail approved in its Editorial: “Justin Trudeau goes all in on the carbon tax. It’s the right thing – for the environment, and the economy”. Political writer Paul Wells uses similar language and confesses to “startled admiration” in “On climate, at last, Justin Trudeau is all in” in Maclean’s magazine . The National Observer published “Trudeau goes it alone with new climate plan, proposes carbon price hike”, drawing the contrast with the 2016 Framework, which was drafted in consultation with all the provinces. The Energy Mix is less approving in “With $170/Tonne Carbon Price, $15b In New Spending, Canada’s 2030 Carbon Target Still Falls Far Short” (Dec. 14), which summarizes reaction from environmental groups.
Reaction from Labour and Environmentalists:
Like Unifor , the Canadian Labour Congress highlights the need for more transition measures in the new Plan, and states: “Labour will be looking to the federal government to make good on its commitment to supporting local job creation, skills training, apprenticeships and decent wages for workers, especially to those historically underrepresented in the skilled trades sector, including Indigenous workers, racialized workers and women…. Canada’s unions welcome the government’s emphasis on domestic manufacturing, including developing Canadian supply chains for low-emission building materials, clean tech, and aerospace and automotive investments, and leveraging the power of public procurement. Additionally, unions are noting the crucial commitments made today towards bringing Indigenous communities into the process.”
The International Brotherhood of Electrical Workers Canada (IBEW) commends the Plan and states: “The highly skilled members of the IBEW are trained and ready to take on these important jobs, and the government’s commitment to investing in green buildings and retrofits, electrified public and private transportation and grid modernization will require exactly the sort of knowledge and skills that IBEW members demonstrate on the job every day.”
From the Climate Action Network Canada, which includes both labour and environmental groups: “… this plan does not change the fact that Canadian governments continue to double down on fossil fuels, subjecting workers and our economy to the ever-increasing volatility of oil and gas markets…. It’s good to see policies that can, if implemented quickly and with the greatest stringency possible, take Canada’s climate ambitions further than our current insufficient Paris pledge – reducing emissions up to 40% below 2005 levels by 2030. It is also good to see a significant investment of $15B in climate action. However, these numbers pale in comparison to commitments being made by our closest trading partners in the EU and the U.S. (under a new Biden administration)”.
Similarly, from Environmental Defence: “The climate action plan released today has a more comprehensive suite of climate policies than in the past and we welcome the meaningful escalation of the retail portion of the carbon price. We’re also pleased about the portion of the $15 billion investment that is not in effect yet another fossil fuel subsidy. But that amount, which is a small fraction of what other countries are doing on a per capita basis, clearly cannot get the job done. In fact, Canada should be investing $270 billion if it was following the level of ambition of the US or EU.” West Coast Environmental Law agrees with these points, and also states: “While we applaud much of this climate plan, the government continues to ignore the reality that climate leaders don’t build oil pipelines. The recent analysis released by Canada’s Parliamentary Budget Officer confirms that the Trans Mountain pipeline will lose money if any climate action is taken, let alone the action promised in this plan. If Canada is serious about acting on climate change, the government must cancel this ill-conceived project once and for all.”
Economists applaud carbon tax initiative
The federal government announcement includes a 4-page Annex document about its carbon pricing proposals. The carbon tax will rise by $15 per tonne after 2022 until 2030, when it will reach $170 per tonne. The government is banking on a favourable decision by the Supreme Court of Canada when it rules on the constitutionality of the existing federal carbon tax in 2021. In a politically shrewd change from current practice, carbon rebates will be distributed to households on a quarterly basis, and as now, most households will receive more in rebates than they pay out.
Mainstream economic voices support the carbon tax: The Canadian Institute for Climate Choices calls the plan “a big deal”, and says: “The government’s emissions projections under a carbon price that rises by $15/tonne per year is consistent with analysis from the Parliamentary Budget Office, Clean Prosperity, Canada’s Ecofiscal Commission, and our own principal economist, Dave Sawyer. This is a policy that can deliver on the emissions reductions it promises.” Clean Prosperity states “This is a bold, brave, and wise move that will set Canada on the path to decarbonization. It sends a clear message to investors around the globe that Canada is serious about climate action.…. This was not an easy choice, but it’s the right choice. The government is wisely adopting a low-cost policy option that is good for the economy.” And Merran Smith, speaking for Clean Energy Canada, calls it a “comprehensive and honest plan…. historically and globally significant. The plan will retool and position Canada’s economy to be increasingly competitive in a low-carbon world.”