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Don’t price carbon: regulate it, says economist

During CTV’s “Question Period” yesterday, Canada’s Environment Minister, Catherine McKenna, announced that the government will impose a so-called carbon price if the country’s provinces fail to tackle greenhouse gas emissions.

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From October the national government will require provinces to adopt a carbon tax or cap-and-trade system.

She only said the government will have a “backstop” for provinces that do not comply, but did not address questions on penalties for defiance.

“It’s mandatory that everyone will have to have a price on carbon”, she said.

She said the carbon taxes would be a “backstop” for provinces that do not put their own prices on carbon through taxes or cap-and-trade programs.

Four of Canada’s largest provinces – British Columbia, Alberta, Ontario or Quebec – now either have a carbon taxation or cap-and-trade system or plan to introduce one in the near future.

Currently, British Columbia and Alberta operate a carbon tax and carbon levy, respectively.

McKenna acknowledged the complexities caused by the existence of these two separate carbon pricing mechanisms, as well as the federal Government’s relationship to them.

Just before the Paris climate talks past year, McKenna had alleged that the previous government’s carbon emission targets were floor and “not the ceiling” of what Canada should be doing.

Despite the government’s reticence to reconsider nationwide emissions targets, Canada has seen a modest shift in climate priorities and policies since the election of the Liberal party with Prime Minister Stephen Trudeau.

Still, without deepening the reduction targets set by the previous administration, environmentalists worry Canada remains on a path to climate failure.

“It allows governments, it allows businesses to make decisions about how they’re going to reduce their emissions”. However, official figures suggest this target is out of reach without radical new measures to curb emissions.

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“It prices what we don’t want – which is we don’t want pollution”, McKenna said.

Minister of Environment and Climate Change Catherine Mc Kenna speaks during a news conference