Environmental think-tank critical of P.E.I. carbon pricing approach

An environmental think-tank doesn't believe the federal government will be able to turn down New Brunswick's approach to a fuel carbon tax because it mimics what's already been approved on P.E.I.

New Brunswick is offering a decrease in provincial gas taxes to soften the impact of the federal carbon tax at the pumps. 

That's similar to what P.E.I. did in 2019, reducing the federal carbon tax to one cent.

Another one cent levy will be added April 1, 2020 — but the P.E.I. government is once again reducing its own gas taxes January 1st to make sure it is just a one cent increase.

However, members with the Pembina Institute don't think this should have been allowed.

Isabelle Turcotte is director of federal policy with the group and said what P.E.I. has done with carbon pricing does not meet the federal benchmark for a levy.

She said the point of the levy is to implement a price on pollution of $20 a tonne in 2019 and to increase that levy annually by $10.

"What happened is that there was an inconsistent application of that requirement which led to approval of a system in P.E.I. where essentially the province is reducing its excise tax. So, at the end of the day you are weakening the signal to reduce your emissions," Turcotte said.

Turcotte said Canada put forward benchmark requirements to make sure each jurisdiction was stepping up to fight carbon.

"We should all level-up and meet those minimum benchmark requirements," Turcotte said.

Advantage or disadvantage?

Putting a price on carbon is the best way to reach the goals of maintaining a safe climate and building a competitive economy to draw investments in low carbon technology, Turcotte said.

"Different jurisdictions should all strive to put forward ambitious climate plans which include an ambitious approach to putting a price on pollution," she said.

Turcotte said she understands how people could think carbon pricing puts Canada at an economic disadvantage. The United Statues does not have federal carbon pricing. However, Turcotte said some states are doing work to curb pollution.

"While the United States does not yet have a price on pollution across every state, numerous states have one and 70 jurisdictions across the globe are also pricing pollution," she said.

Mid-term review

Turcotte said there is a mid-term review of Canada's carbon pricing in 2020 and she would like to see carbon pricing more consistently applied across the country.

"That means, let's make sure effectively there is a signal at the pump, at the point of consumption that is equal across the country," she said.

The province estimates the additional one cent levy added April 1, 2020 will generate more than $5 million next year, which will be spent on active transportation networks, and giving electric and hybrid vehicle owners a break on their registration fees.

Officials with the province said in an email it's too early in the process of negotiating a new agreement with Ottawa to comment. The current agreement doesn't expire until March 31, 2021, and they will be working to formalize a process in the new year.

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