Canada’s carbon pricing strategy makes polluters pay

22nd May 2017
Alice Matthews


In Canada, 97% of people live in provinces that already have a price on carbon pollution. In a move to tackle pollution and reduce emissions, the Canadian government is planning to introduce pollution caps and fuel taxes in the two remaining provinces who have not put in place their own system in 2018, Saskatchewan and Manitoba.

Last December, Justin Trudeau’s liberal government negotiated the Pan-Canadian Framework on Clean Growth and Climate Change deal with eight of the ten provinces to introduce a carbon price. By ensuring polluters pay in every province, the government hopes to reduce pollution and provide the incentive to companies to innovate and create cleaner solutions.

Brad Wall, Saskatchewan’s premier, has previously made his views on the matter very clear: he has threatened legal action if the government imposes carbon pricing in his province. He fears a national carbon price would increase firms' costs at a time when US President Donald Trump wants to cut corporate taxes.

Under Trudeau's plan, carbon pollution would cost C$10 (£5.70) a tonne in 2018, rising by C$10 (£5.70) a year until it reaches C$50 (£28.50) in 2022. The provinces can either implement a carbon tax or a cap-and-trade market.

When provinces put a price on pollution, they have the opportunity to choose what is best to do with the money. Revenues from carbon pricing can be used for a range of applications including lowering taxes, supporting low-and middle-income families and investing in innovative green programmes that create good jobs. The government believe that by pricing carbon Canada will be able to meet its target of reducing emissions to below 2005 levels by 2030.

Catherine McKenna, Minister of Environment and Climate Change, stated: "Canadians know that polluting isn't free. We know that it causes droughts, floods and extreme weather events, and affects our health. So it's only fair that polluters pay, and that there is a price on pollution across Canada.

“This will reduce pollution, create incentives for companies to innovate and develop clean solutions, and provide certainty to businesses that we are moving to a clean-growth economy. That's why we are working together with provinces, territories, Indigenous Peoples, businesses, communities and all Canadians to build a more sustainable, cleaner, more prosperous economy, and create good middle-class jobs now and for the future. Because it's good for business. And because we owe it to our kids and grandkids."

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