Federal environment minister rejects Nova Scotia's plan to avoid carbon tax

HALIFAX -

The federal government's decision to reject Nova Scotia's proposal to avoid a carbon tax is a "missed opportunity," the province's environment minister said Tuesday.

Tim Halman told reporters he was disappointed by the decision expressed in a letter to Premier Tim Houston by federal Environment Minister Steven Guilbeault. "There is no doubt that a carbon tax will increase prices in our province," Halman said. "The federal tax will hit low- to middle-income Nova Scotians the hardest."

Halman wasn't specific about the province's next step, but he said the government would respond to Guilbeault by Friday, which is Ottawa's deadline for receiving Nova Scotia's plan to reduce greenhouse gases.

The minister said Nova Scotia has already legislated the most aggressive climate change targets in the country. "It was hoped that Ottawa would be amenable to that," Halman said. "What a missed opportunity here on the part of the federal government to work with the province."

In his letter to Houston dated Aug. 29, Guilbeault noted that Nova Scotia's plan doesn't put a price on carbon pollution, adding that his department remains open to "alternate proposals" that meet the federal government's approach.

"As it does not mention to put a price on carbon pollution, I can confirm that it does not meet the Pan-Canadian Approach to Carbon Pollution Pricing for 2023--2030," Guilbeault wrote. "You are proposing to end Nova Scotia's cap-and-trade system, with no replacement that would put a price on pollution."

Guilbeault said the federal government is committed to ensuring that the same carbon pricing incentives to reduce emissions are in place in Nova Scotia and across Canada.

"The federal carbon pollution pricing system will be applied in provinces and territories that request it or that do not implement a system that aligns with the common minimum national stringency criteria," the minister said.

The new federal carbon tax will increase the price of carbon by $15 per tonne in 2023, and then rise again every year until it reaches $170 per tonne in 2030.

Houston has said that with the rising cost of living, the time isn't right for a carbon tax that could add 14.4 cents per litre to the cost of gasoline in Nova Scotia starting April 1, 2023.

But Guilbeault maintained that the province does have a choice in how it handles the revenue from a carbon tax, which he said is one of the most cost-effective ways to reduce emissions. "Provinces can use the proceeds from their carbon pollution pricing systems to support a range of goals and priorities," he said in the letter.

Earlier this month, the province released its own plan to reduce emissions, which was a list of the government's existing environmental goals that were set out in legislation last fall. They include phasing out coal-fired electricity generation by 2030, having 80 per cent of the province's energy supplied by renewable sources by 2030, and having zero-emission vehicles comprise 30 per cent of vehicle sales also by that year.

Houston said following the plan's release that if his province doesn't meet its emission-reduction targets, then Ottawa could institute a carbon tax.

Nova Scotia currently has its own cap-and-trade program for large industrial emitters that has been in place since 2019. The program, which has allowed the province to avoid major price increases to gasoline, is set to expire at the end of this year.

Opposition Liberal Leader Zach Churchill said in a statement Tuesday that Guilbeault indicated in the letter that a carbon tax is coming to Nova Scotia. Churchill accused the Progressive Conservative government of "sitting on its hands for over a year" before coming up with a plan he called a "cobbled-up document."

"He (Houston) knew what was at stake and he chose not to act," Churchill said. "The Houston government won't take responsibility for the carbon tax coming to Nova Scotia, but make no mistake, it's their neglect that got us here."

This report by The Canadian Press was first published Aug. 30, 2022.