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

Wet’suwet’en supporters and Coastal GasLink opponents continue to protest outside the B.C. Legislature in Victoria, B.C., on Thursday, February 27, 2020. THE CANADIAN PRESS/Chad Hipolito
‘We’re still in it’: Wet’suwet’en push forward on rights recognition

The 670-km Coastal GasLink pipeline was approved by B.C. and 20 elected First Nations councils on its path

A health-care worker prepares a dose of the Pfizer-BioNTech COVID-19 vaccine at a UHN COVID-19 vaccine clinic January 7, 2021. THE CANADIAN PRESS/Nathan Denette
Employers might be able to require COVID-19 vaccination from employees: B.C. lawyer

‘An employer must make the case’ using expert science, explains lawyer David Mardiros

The COVID-19 outbreak at the two Coastal GasLink workforce lodges has officially been declared over. (Lakes District News file photo)
COVID-19 outbreak at Coastal GasLink worksites declared over

In total, 56 cases were associated with the outbreak in the Burns Lake and Nechako LHAs

The Nisga’a Valley Health Authority reported an isolated cluster of COVID-19 cases among non-direct care staff at the New Aiyansh Health Centre. (Gary Fiegehen/Nisga’a Lisims Government)
New Aiyansh Health Centre experiencing COVID-19 cluster among non-direct care staff

Nisga’a Valley Health Authority asking residents to cancel appointments outside the Nass Valley

A photo of the CervixCheck at-home test kit, developed by Eve Medical. (Submitted Photo/Katina Pollard, Métis Nation British Columbia)
Pilot project puts cancer screening into the hands of northwest B.C. women

Métis women experience barriers to cervical cancer screening

Terrance Josephson of the Princeton Posse, at left, and Tyson Conroy of the Summerland Steam clash during a Junior B hockey game at the Summerland Arena in the early spring of 2020. (John Arendt - Summerland Review)
QUIZ: How much do you know about hockey?

Test your knowledge of Canada’s national winter sport

A woman injects herself with crack cocaine at a supervised consumption site Friday, Jan. 22, 2021 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Drug users at greater risk of dying as services scale back in second wave of COVID-19

It pins the blame largely on a lack of supports, a corrupted drug supply

Jennifer Cochrane, a Public Health Nurse with Prairie Mountain Health in Virden, administers the COVID-19 vaccine to Robert Farquhar with Westman Regional Laboratory, during the first day of immunizations at the Brandon COVID-19 vaccination supersite in Brandon, Man., on Monday, January 18, 2021. THE CANADIAN PRESS/Tim Smith - POOL
Top doctor urges Canadians to keep up with COVID measures, even as vaccines roll out

More than 776,606 vaccines have been administered so far

From the left: Midway RCMP Csts. Jonathan Stermscheg and Chris Hansen, Public Servant Leanne Mclaren and Cpl. Phil Peters. Pictured in the front are Mclaren’s dog, Lincoln and Peters’ dog, Angel. Photo courtesy of BC RCMP
B.C. Mounties commended for bringing firewood to elderly woman

Cpl. Phil Peters said he and detachment members acted after the woman’s husband went to hospital

Dr. Jerome Leis and Dr. Lynfa Stroud are pictured at Sunnybrook Hospital in Toronto on Thursday, January 21, 2021.THE CANADIAN PRESS/Frank Gunn
‘It wasn’t called COVID at the time:’ One year since Canada’s first COVID-19 case

The 56-year-old man was admitted to Toronto’s Sunnybrook Health Sciences Centre

An Uber driver’s vehicle is seen after the company launched service, in Vancouver, Friday, Jan. 24, 2020. Several taxi companies have lost a court bid to run Uber and Lyft off the road in British Columbia. THE CANADIAN PRESS/Darryl Dyck
Taxi companies lose court bid to quash Uber, Lyft approvals in British Columbia

Uber said in a statement that the ruling of the justice is clear and speaks for itself

A 75-year-old aircraft has been languishing in a parking lot on the campus of the University of the Fraser Valley, but will soon be moved to the B.C. Aviation Museum. (Paul Henderson/ Chilliwack Progress)
Vintage military aircraft moving from Chilliwack to new home at B.C. Aviation Museum

The challenging move to Vancouver Island will be documented by Discovery Channel film crews

A video posted to social media by Chilliwack resident Rob Iezzi shows a teenager getting kicked in the face after being approached by three suspects on Friday, Jan. 22, 2021. (YouTube/Rob i)
VIDEO: Security cameras capture ‘just one more assault’ near B.C. high school

Third high-school related assault captured by Chilliwack resident’s cameras since beginning of 2021

FILE - In this Feb. 14, 2017, file photo, Oklahoma State Rep. Justin Humphrey prepares to speak at the State Capitol in Oklahoma City. A mythical, ape-like creature that has captured the imagination of adventurers for decades has now become the target of Rep. Justin Humphrey. Humphrey, a Republican House member has introduced a bill that would create a Bigfoot hunting season, He says issuing a state hunting license and tag could help boost tourism. (Steve Gooch/The Oklahoman via AP, File)
Oklahoma lawmaker proposes ‘Bigfoot’ hunting season

A Republican House member has introduced a bill that would create a Bigfoot hunting season

Most Read