Nova Scotia environment minister says now is not the time for a carbon tax

Nova Scotia Environment Minister Tim Halman says he's concerned if a federal carbon tax is imposed on the province during this time of high inflation.

"Philosophically, I don't have an issue with it. I get it. It's about changing patterns of behaviour," Halman told reporters at Province House on Thursday.

"As an environment minister I understand that. I think, however, though, we've got to be realistic and recognize the times that we're in and, as a government, we don't feel it's appropriate."

Halman made the comments after revealing that he wrote to his federal counterpart earlier this month asking if there was any flexibility on federal regulations pricing carbon, in hopes that Ottawa will not impose a tax if the Nova Scotia government fails to show another way it can price carbon to meet new regulations.

Fears of more energy poverty

In a July 5 letter to Canada's environment minister, Steven Guilbeault, which the province released Thursday, Halman writes that imposing a federal carbon tax would add 14.4 cents per litre to the price of gas beginning next year.

"...[T]his type of an increase on the price of gas alone, in a province like Nova Scotia, would lead to more energy poverty across the board," Halman writes.

"The extremely negative impact of such an increase would be felt disproportionately by middle and lower income families and those living in the vast rural areas of our province who, on average, consume a higher proportion of their income on transportation just to get to work and appointments."

Since 2019, the province has used an in-house designed cap and trade program to price carbon, which focuses on Nova Scotia's largest emitters. To meet updated targets, the province must decide if it will go with the federal carbon tax, stick with cap and trade or use a hybrid.

No exceptions

Despite his letter to Ottawa, Halman insisted on Thursday that he and department officials have not made a final decision about any of the options. He said that in a followup conversation with Guilbeault it was made clear there would be no exception to the carbon pricing requirements.

Halman's letter to Guilbeault makes the case that the provincial and federal government should work together on the expanded use of renewable green energy, such as offshore wind, and greening the province's electricity grid.

Nova Scotia has been lobbying Ottawa to financially support the Atlantic Loop, a multi-billion dollar project that would upgrade transmission lines between here and New Brunswick to help bring in more hydroelectricity from Quebec and Labrador. The province is also exploring the use of green hydrogen.

Carbon pricing is "one tool in the toolbox" to deal with climate change, said Halman.

"There are many ways to reduce greenhouse gas emissions, but it's the position of the Government of Nova Scotia that a federal carbon tax, we don't believe, is appropriate given, you know, the most inflationary times we're seeing since the late 1970s."

NDP Leader Claudia Chender called Halman's letter "political posturing."

"This government is looking more and more like their Conservative brethren across the country," she said in an interview.

"You can't just write a letter to Ottawa without a plan."

Chender said the government has been tightlipped about its plans, even with a looming deadline to make a decision. She said whatever option the province chooses is going to be a challenge because fuel and energy sources in Nova Scotia remain dirty compared to other parts of the country.

"It's a difficult task but it's one that we've had a lot of warning about."

Chender said Halman, as environment minister, should be making the environment his first priority and leaving concerns about inflation to other colleagues.

Liberal Leader Zach Churchill said the government is showing itself to be "more flash and no substance."

"They're just trying to cover their backs on this issue as opposed to actually developing a Plan B that's going to protect people that are spending money at the pumps," he said.

Churchill noted that the cap-and-trade system developed by the former Liberal government was able to save about 10 cents per litre on the price of gas compared to other provinces forced to use different approaches to pricing carbon.

He said the public deserves more details about what's being considered and what it could mean.

Leak investigation continues

The only concrete information the public has received about what's being considered and its potential impacts for Nova Scotians has come via documents leaked to CBC News and AllNovaScotia.com.

Those documents show that of the three options, the federal carbon tax could cause major spikes in the price of gas and electricity by 2030, but also generate as much as $1.1 billion per year that could be used to help offset the impacts of the program.

At the time the two outlets reported on the documents, Halman and Premier Tim Houston said they were instructing government officials to investigate the source of the leak.

Halman said on Thursday that work was ongoing and he could provide no other comment.

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