Prime Minister Justin Trudeau has announced that Canada would introduce nationwide carbon pricing in 2018 after meeting with the premiers of Canada’s 10 provinces and three territories.
“We have a pan-Canadian price on carbon pollution because we know it is the best way to ensure better clean jobs,” Mr. Trudeau said at a news conference. “This is a way for Canada to show leadership.”
Under the plan, all Canadian provinces must have an initial minimum carbon price of about $7.60 per metric ton. Over the next five years, the price would rise to about $38.
The government in Saskatchewan has refused to sign the agreement citing threats to Canada’s industrial competitiveness, especially given the new U.S. administration. During a visit, Vice President Biden tried to play down such concerns by emphasizing that U.S. carbon policies are largely state or business decisions and unlikely to change drastically.
The other holdout province, Manitoba, appeared to be withholding approval as leverage in a health care funding disagreement. Mr. Trudeau said earlier that the federal government would return money raised by any federally imposed carbon taxes to the provinces.
Excluding the two holdout provinces, the carbon pricing agreement covers 93% of Canada’s population. Mr. Trudeau said that 90% of Canada’s energy needs could be met by “clean” sources by 2030 while also expanding Canada’s energy sector, which is a significant part of its economy. Should the provinces not agree to the framework Trudeau has threatened to impose a minimum carbon price for the nation.
As part of Trudeau’s efforts to limit climate change, Canada will jointly develop a clean-fuel standard, build electrical transmission lines to support a coal phase-out and retrofit buildings. The previous infrastructure budget, as well as a promised Canada Infrastructure Bank, will be used to the fund efforts.
Carbon taxes have gained popularity in recent years as an efficient means of limiting emissions, but Canada’s policy would be an especially ambitious push to assuage environmental concerns.