Second time lucky? Premier pitches another carbon tax plan

One East Coast premier says his province’s plan to reduce greenhouse gas emissions is “better and more effective” than the carbon tax, but critics say it’s far from a climate solution.

This week, Nova Scotia Premier Tim Houston sent a letter to Prime Minister Justin Trudeau that presented his “Still Better Than a Carbon Tax” plan, which he insisted would “do far more to address climate change.” It follows his first attempt to skirt the tax in August 2022. That plan was similarly titled “Better Than a Carbon Tax.”

The first plan was rejected because it proposed ending the province’s cap-and-trade system without a replacement price on pollution — a requirement from the federal government. Houston’s new plan also doesn’t put a price on pollution, explains Thomas Arnason McNeil, senior energy co-ordinator with the Ecology Action Centre based in Halifax.

“They could manage carbon pricing a little differently, but still reduce emissions, still ensure that we're one of over 40 countries with carbon pricing. That we're not giving up in the fight against climate change,” he said, pointing to an analysis by Dalhousie professor Larry Hughes that suggests restructuring the tax based on income.

“But fundamentally, that's not what we saw within this proposal.”

Nova Scotia’s new plan calls for the federal government to exempt it from the carbon tax and instead, let its existing climate plans propel the province toward climate targets. The letter states that the federal carbon tax aims to increase renewable energy use and decrease planet-warming greenhouse gas emissions, ultimately leading to net-zero emissions by 2050, and the province’s current targets reflect that.

Nova Scotia’s climate plan includes targets to reduce greenhouse gas emissions by 53 per cent below 2005 levels by 2030 and reach net-zero emissions by 2050, but the opposition has been critical of the lack of emissions targets before 2030. Liberal Leader Zach Churchill referred to Houston’s recent proposition as “not a credible alternative.”

In response to Canada’s National Observer, Nova Scotia’s Department of Environment and Climate Change said this week’s proposal “reflects additional policies, successes, and actions” since Houston’s first plan. The department notes the province has “the most ambitious legislated” 2030 emissions reduction targets, and it has “historically led the country in [emissions] reductions, which was true in 2022 and remains true today.”

However, McNeil insists that the province often fails to follow through on climate commitments. Instead of coming up with a legitimately new plan after its first failed attempt, McNeil said Houston’s letter shows he isn’t trying to come up with a solution. Instead, it feeds into the political battle around the tax.

The federal pricing system that sets the bar across Canada has two parts: a federally imposed charge on gasoline, diesel and home heating fuel and a performance-based system for industries, called the output-based pricing system. However, the federal government announced in October a three-year pause on home heating oil and an increase in the rebate for rural households. The concept of the carbon tax is that by making planet-warming fossil fuels more expensive, consumption of oil and gas will decrease, making Canada’s emissions lower.

British Columbia, Quebec and the Northwest Territories all have their own carbon pricing plans that meet the federal requirements. B.C. has had a carbon tax since 2008, long before the federal government mandated a countrywide carbon tax.

In a statement to Canada’s National Observer, Environment and Climate Change Canada reiterated the federal government is “open to provincial and territorial proposals for credible systems that price pollution that reflect the unique realities of their regions and that meet the national benchmark.” This week, Manitoba Premier Wab Kinew said the province is working to submit an alternative plan.

The department noted that “all proceeds from [the carbon tax] are returned to Nova Scotia, the vast majority (over 90 per cent) goes back to households through Canada Carbon Rebates. Eight out of 10 households get more back than the costs incurred from carbon pricing. This benefits low- and middle-income households in particular.”

The letter Houston sent to the federal government lays out “the many things Nova Scotia is doing that are more effective than a carbon tax,” which includes the province’s climate, power, hydrogen and coastal action plan, he said.

The document says the federal carbon tax will lead to a 300,000-tonne reduction in greenhouse gas emissions by 2030 from the building and transportation sector, but Nova Scotia’s initiatives will lead to much greater reductions. However, McNeil points out the government has blown past its target to update building codes by the beginning of 2024 without giving a new timeline after “pushback from developers.”

“So, it's ridiculous to claim that your plan is going to reduce more emissions in the building sector when you're not implementing your plan,” he said.

To address emissions in the transportation sector, the province passed a law in 2021 that 30 per cent of new vehicle sales would be electric by 2030, but McNeil notes they haven’t implemented it.

The province’s Coastal Protection Action Plan was also watered down. The original Coastal Protection Act, passed in 2019, was set to limit where new homes and buildings could be built along the Nova Scotia shoreline, depending on erosion and flood risks.

The government dragged out enacting the plan for two years, then scrapped it for a coastal mapping tool, which shows the risk to coastal properties based on sea-level rise projections. McNeil refers to it as “basically a web page that you can read while your house is sinking into the ocean.”

“It's not just about having a plan. It's not just about passing legislation. What it's about is implementation,” he said. “This government has shown — whether it's the building sector or the transportation sector — just an utter disregard for the implementation of their own climate policies.”

In the premier’s letter, he notes that the province wants the federal government “to examine our progress leading up to and in 2025 to ensure we are meeting those targets.”

“In the unlikely event that we are not successful, we would agree with your assessment that more needs to be done and would acknowledge the need to enter into a new agreement that would likely include a carbon tax,” reads part of the letter.

However, McNeil stresses that emissions need to be cut back each year, and allowing the province to try to reduce its emissions with its current track record of missing targets is “a ridiculous idea.”

Importantly, the carbon price is far from the only tool to address climate change, and it should be used in tandem with other strong climate policies, said McNeil.

“Why can't we have carbon pricing and a plan to build out wind and solar and decarbonize the building and transportation sectors?... Why can't we have all of these things? Isn't that what the moment demands?”