Liberals plan on softening carbon tax because of competitiveness

Environment Minister Catherine Mc Kenna speaks during the Canada 2020 Conference in Ottawa on Tuesday

Justin Tang CP Environment Minister Catherine Mc Kenna speaks during the Canada 2020 Conference in Ottawa on Tuesday

Canada's Prime Minister Justin Trudeau looks on at the start of the Climate Action Special Executive Session at the Commonwealth Heads of Government Meeting (CHOGM) in Valletta, Malta, November 27, 2015.

Canada's Ministry of Environment and Climate Change updated its carbon tax policy framework this week and revealed that subsidy rates for industrial emitters were up across the board, but that cement, steel-making, lime and nitrogen fertiliser companies would be entitled to the highest subsidies.

Canada's Environment Minister, Catherine McKenna, said the decision to soften the proposed plan was made after discussions with experts who pointed out that competitiveness could be hurt.

Firms complained this would make them less competitive, given the United States has no such carbon tax. The tax is set for $20 a tonne in 2019 and will rise to $50 in 2022.

The first iteration of the federal carbon tax would have taxed all industries for around 30 per cent of their emissions, with the benchmark being set at 70 per cent of each industry's average emissions. The federal system goes into effect in January and will affect provinces, such as Ontario and Saskatchewan, that don't meet its standards for carbon pricing.

Contending Ottawa is acting like "big brother", the Saskatchewan government has put forward its written legal argument against a federally-imposed carbon tax.

"But it's already on trial among the families who will be forced to pay more for gas, home heating and everything else if the federal government gets its way", said Mulroney, who previously supported a plan to tax carbon emissions under former Progressive Conservative leader Patrick Brown.

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The CAD20/t carbon tax is expected to come into force in January and will apply to all emitters, but is created to target companies that emit more than two-thirds of their direct competitors.

"We consulted broadly with industry", Caroline Theriault said in a statement.

"Cancel your carbon tax", he said.

Official data shows Canada now has no chance of meeting its 2030 emissions reductions targets. While Mr. Ford has said he is committed to reducing greenhouse gas emissions, the Premier and his environment minister have ruled out any use of taxes to do so.

"These are ... costs that we would incur in Canada but our competing plants in the United States would not", he said by phone, noting that 93 percent of Canadian auto production was exported to the United States.

"We are certainly in favour of putting a price on carbon, we favour that, we think it's the right direction, we think it does on the long term bring the right behaviour to try to reduce GHG emissions", he said.

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