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Canada divided by carbon conundrum

Canada’s plans for raising carbon tax face mounting political and popular opposition

Four years ago, Canadian Prime Minister Justin Trudeau enjoyed broad political support for implementing a pan-national carbon pricing strategy to make meaningful reductions to Canada’s stubbornly high greenhouse gas emissions.

But, where Trudeau once enjoyed the support of likeminded political leaders, the changing political landscape—following recent elections—is undermining plans to more than double carbon levies to C$50/t CO2e ($37.85/t CO2e) by 2020.

When Trudeau was elected in 2015, 80pc of the country was already under some sort of carbon regime. Ontario, home to the country's industrial manufacturing heartland, and Quebec—bestowed with abundant hydroelectric resources—had joined a cap-and-trade plan with California and vowed to eliminate coal-fired power. British Columbia imposed a fuel tax surcharge aimed at making motorists drive less. Even recalcitrant Alberta, which accounts for 80pc of the country's oil production (but barely 7pc of its population), capped emissions from oil sands and imposed a C$30/t CO2e levy on everything from home heating bills and petrol to large industrial polluters.

There were holdouts, notably Saskatchewan—home to much of the remaining 20pc of Canadian oil output. In late October, the federal government moved to impose its own tax on those provinces and territories without adequate pricing plans, to force them on board. Of course, nobody likes taxes. But few expected the backlash that has ensued.

Populists to the fore

It started in Ontario, where voters this summer turfed out a climate-friendly Liberal government and elected a Donald Trump-style populist, Doug Ford, who promptly rescinded the province’s carbon pricing scheme. This was a huge blow for Trudeau—who faces presidential elections himself in 2019. Ontario is home to two-thirds of Canada’s population and the lion’s share of the country’s manufacturing, automotive and steel production—all energy-intensive industries.

Ontario has traditionally aligned with Ottawa and Quebec on environmental policy. But it promptly signed with Saskatchewan in a legal challenge that will almost undoubtedly trigger a constitutional crisis. Appearing with Ford at a press conference in Toronto, Saskatchewan premier Scott Moe brazenly stated he would rather cheer for the Toronto Maple Leafs hockey team than accept a carbon tax. “I am historically not a Leafs fan but let me say this: I’d gladly cheer for the blue and white before I accept a federal Liberal carbon tax,” Moe said.

Even in Alberta, where oil sands accounts for roughly a third of Canada’s GHGs (and rising), erstwhile Trudeau ally Rachel Notley tied her province's participation in the national carbon plan to approvals for new export pipelines to the west coast. Notley says that a national climate change policy without Alberta “is not worth the paper it is written on”. She too is facing re-election in spring 2019 and trails her United Conservative opposition by some 25 points in the latest polls.

All of it is complicated by the United States—by far Canada's largest trading partner with respect to energy—where president Donald Trump is removing environmental protections at a furious pace. Canadian appeals to have climate policy entrenched in a renegotiated North American trade pact fell on deaf ears. In fact, it was the US unwillingness to ratify the Kyoto Accord under the George W Bush administration which prompted then Canadian prime minister Stephen Harper to withdraw Canada from the treaty altogether.

The result is a confusing and inconsistent patchwork of localised policies, made even more complicated by Canada's notoriously fragile confederation. Already, fringe groups are tossing about words like secession if Ottawa makes good on its vow to implement a unified strategy. And unity of purpose, it seems, is what is sorely lacking in the debate.

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