PC leader promises refund of carbon tax revenue to New Brunswickers

Progressive Conservative Leader Blaine Higgs says he'll refund any carbon-tax revenue to New Brunswickers if he is premier and if Ottawa ends up imposing its own pricing regime on the province.

Campaigning in Moncton on Monday, Higgs repeated his promise to join a legal challenge by the Ontario and Saskatchewan governments aimed at killing the federal plan.

But he said if that doesn't work, he'll make sure New Brunswickers aren't taxed more. 

Premier Brian Gallant's Liberal government originally promised a revenue-neutral carbon tax system — a phrase that usually means other taxes are reduced to offset the tax consumers would pay on fossil-fuel consumption. 

Gallant later abandoned that promise and is now using carbon-tax revenue to fund environmental programs.

"The original concept — we're sticking with it," Higgs said. "Taxpayers were told it would not add to their bottom line. Gallant and Trudeau have drifted away from that. Well, we're bringing it back.

"If we're not successful [in the legal challenge], we will indeed make it revenue neutral. Which means taxpayers of this province will not have increased taxes as a result of the federal government imposing it."

Since April, 2.3 cents of New Brunswick's 15.5-cent-per-litre gas tax has been shifted into a climate fund to be spent on environmental initiatives.

That share will increase every year over five years to 11.64 cents, but with no net increase to what consumers pay at the gas pumps.

Higgs said Monday that Gallant designed his tax that way "to avoid talking about it during the election cycle."

Gallant claims shifting a portion of the gas tax meets the federal requirement for a provincial carbon price.

But federal environment minister Catherine McKenna, a fellow Liberal, has hinted that it does not. She said her national plan requires putting an additional cost on carbon dioxide.

Ottawa has vowed to impose its own more onerous regime on provinces that don't meet its requirements, though it won't say until later this year whether it considers New Brunswick offside.

Higgs estimated a 12-cent-a-litre carbon tax on top of the existing gas tax would cost a New Brunswick family $1,200 a year.

Saskatchewan has already launched a constitutional challenge to Ottawa's power to impose its system. Ontario announced last month it will join the case, and Higgs said he will too if he becomes premier.

Ottawa plans to impose its system on recalcitrant provinces at the start of 2019. If the legal challenge fails, Higgs said, the federal government will collect the money "but Ottawa has an obligation to refund it," he said Monday. "That's part of the federal plan."

Higgs said if the money is returned to the New Brunswick government, "we will disburse that in the way of reduced taxes in other areas."

But McKenna has hinted she will not return the money to dissenting provincial governments and will instead bypass them by sending rebates directly to taxpayers in those provinces.

Higgs's rebate promise is "not within his control and it's a gamble," said Liberal campaign spokesperson Greg Byrne. "There is no guarantee that the federal government will provide the province with that money."

Byrne said if Higgs scraps Gallant's system, it'll be more likely that Ottawa will impose its regime — with no guarantee the rebates will be possible.

Byrne said the Liberals are confident McKenna will accept Gallant's system and not bring in its own tax on New Brunswick.

He also pointed out Manitoba has opted not to challenge the federal plan because of a legal opinion that it won't succeed.

"Right out of the gate, [Higgs is] going to spend taxpayers' money on a multi-million dollar lawsuit with little chance of success."

Higgs could avoid the long and expensive legal battle by simply adopting his own version of a carbon tax with offsetting tax cuts in other areas. 

But he said he opposes that on principle.

"Why set up something just for the sake of setting it up? That's more bureaucracy to collect money and then refund it. Why collect it to begin with?"

Jason Kenney, leader of Alberta's United Conservative Party, joined Higgs at the morning announcement in Moncton and said the New Brunswick PC leader should try to turn the election into a referendum on the carbon tax. 

"Everywhere the carbon tax is put to the voters, they say no," said Kenney, who hopes to win next spring's Alberta election. He's also promising to join Saskatchewan's legal fight. 

Higgs said his promise to fight the tax will be "a main pillar" of his campaign leading to the Sept. 24 election.

He was less clear on how a PC government would tackle climate change in the absence of a carbon tax.

He said he would ensure the province continues to meet or exceed emissions reduction targets, including those in the Paris climate treaty, and would also increase New Brunswick's green-energy capabilities.

"We will do our part on climate change," he said.

But he also said his tax cuts to offset a federal carbon price might include a reduction to the gas tax or to other energy consumption taxes — measures that would make it even less expensive to burn carbon dioxide.

Green Party Leader David Coon, launching his campaign platform in Fredericton, condemned Higgs and the Liberals for "squabbling" about carbon pricing rather than taking real action.

"The Tories have no plan whatsoever," he said. "We need an actual real plan that is going to help propel the green energy transition in New Brunswick and that protects the people of this province  from the effects of climate change. I don't see a plan."

The deadline for New Brunswick to submit its pricing plan to Ottawa for approval is Sept. 1. Byrne would not say Monday whether that has happened.

"We'll probably have more to say about that in the near future," he said