Sunday, 20 October, 2019

Sask. argues carbon tax fight is 'fundamentally' about the nature of federalism

Sask. argues carbon tax fight is 'fundamentally' about the nature of federalism Sask. argues carbon tax fight is 'fundamentally' about the nature of federalism
Russell Knight | 04 August, 2018, 14:39

But after consulting with industry and reviewing the competitiveness factor for industries that have to go toe-to-toe with companies in jurisdictions like the United States, where there is no national carbon price, Ottawa is now proposing raising the cap to 90 per cent for lime, cement, nitrogen fertilizer, iron and steel producers and 80 per cent for most others.

The federal carbon pricing system for heavy emitters, softened last week to ease the impact on Canadian industry, could be amended even further this fall as Ottawa looks to address competitiveness fears in corporate Canada fuelled by USA tax cuts, tariffs and environmental policy roll backs.

The Liberal government said the changed guidelines were aimed at addressing concerns among industries that are at a high risk of suffering from foreign competition.

"For two years now the federal government has been saying that this made-in-Ottawa carbon-tax scheme does not have nay effect on the economy, and it turns out it does, and there's an admission of that today with the watering down of this flawed policy of carbon taxation".

The revisions come as big industries face competitive threats from south of the border in the form of corporate tax cuts and protectionist tariffs, and as Ottawa prepares to replace Ontario's cap-and-trade system with its own carbon levy.

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Saskatchewan's government filed its latest court challenge against the federal carbon tax on Monday, before reports of the carbon tax scale back first surfaced.

"A watered down poison is still poison", Saskatchewan Premier Scott Moe said in an interview on Wednesday.

Mark Nantais, president of the Canadian Vehicle Manufacturers' Association, said if the carbon tax was too high, firms would relocate their production to places without rules on emissions - a phenomenon known as carbon leakage. The federal government would only impose its levy as a backstop to those that fall short of the federal carbon price. We want to have the most energy efficient, smart industries here that create good jobs, at the same time do what we need to do to tackle emissions.

Firms complained this would make them less competitive, given the United States has no such carbon tax. The previous limit was 70 per cent, according to a framework published July 27 by Canada's environment ministry. He says taxing 10 or 20 per cent of carbon emissions will likely lower emissions at the same rate while lowering the costs for businesses. With the case possibly headed from there to the Supreme Court, Moe said it was unlikely there would be a decision ahead of the January implementation date for the carbon tax.

Many industries in Canada are facing competitive pressure from the tariff war started by the United States, major to USA corporate taxes and a scaling back of US environmental policies.

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