Ottawa rejects Atlantic Canada's request for extension to submit climate plan

HALIFAX -

The federal environment minister on Thursday rejected a request from the premiers of Atlantic Canada for an extension to the deadline to submit their plans to tackle carbon emissions.

In a statement to The Canadian Press, Steven Guilbeault said his deadlines "were clearly and repeatedly communicated," adding that provinces have until Friday to provide their strategies to price carbon pollution. Provinces without climate plans deemed acceptable by Ottawa are subject to the federal government's carbon tax.

"Atlantic provinces, like all other provinces and territories, have had a year to prepare their submissions .... I want to be very clear about the importance of pollution pricing in making life more affordable for families," Guilbeault said.

The minister was responding to a letter sent to him earlier on Thursday by Nova Scotia Premier Tim Houston -- on behalf of the region's four premiers -- requesting a short-term extension and a meeting with him to identify "practical solutions to this issue."

Houston said the premiers are deeply concerned about the price increases that would result from a federal carbon tax, adding that the costs would amplify inflationary pressures in Atlantic Canada.

"This (extension) would allow us to resolve any remaining issues, engage in meaningful conversations on solutions for heating fuels and to discuss options for the federal government to support energy affordability in the region," Houston wrote.

Nova Scotia, because of its cap-and-trade system for industrial emitters, is currently exempted from the federal carbon tax; however, that system, which was set up in 2019, is scheduled to expire at the end of this year. Cap and trade has allowed Nova Scotia to avoid major price increases to gasoline.

Carbon pollution-pricing systems in New Brunswick and Newfoundland and Labrador also currently meet federal benchmarks and are not subject to the carbon tax. Prince Edward Island, meanwhile, imposes a fuel charge, but certain industrial facilities not covered by its plan are subject to the federal carbon-pricing system.

Earlier on Thursday, Prime Minister Justin Trudeau told reporters in Winnipeg that instead of asking for deadline extensions, Canada should be accelerating its decarbonization given the global situation and the need for alternative forms of energy.

Trudeau was asked about Manitoba Premier Heather Stefanson's recent request that Ottawa suspend the carbon tax. Saskatchewan Premier Scott Moe and Alberta Premier Jason Kenney have also criticized the tax.

"What the premier and others across the country don't seem to be honest about with Canadians is in the places like Manitoba, where the federal price on pollution applies, average families get more money back from the price on pollution than the extra price on pollution costs them," Trudeau said.

"We found a way of fighting climate change while supporting families who need that support and that's something we are going to continue to do."

The price of carbon under the federal tax will increase by $15 per tonne in 2023, and then rise again every year until it reaches $170 per tonne in 2030. Houston has said the tax could add 14.4 cents per litre to the cost of gasoline in Nova Scotia by April 2023.

But in a letter issued Monday, Guilbeault said the province can decide how it handles the revenue from a carbon tax. "Provinces can use the proceeds from their carbon pollution pricing systems to support a range of goals and priorities," Guilbeault said. The federal minister also said he was rejecting Nova Scotia's plan submitted in mid-August because it didn't put a price on carbon pollution. His department, he added, is open to "alternate proposals" that meet the federal government's approach.

Nova Scotia's emissions plan consisted of a list of 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 car sales, also by that year.

Nova Scotia Environment Minister Tim Halman issued a statement Thursday lamenting the federal government's rejection of his province's climate plan.

"We had hoped that the federal government would be open to our plan -- a plan that is better than a carbon tax for Nova Scotia. They were not," Halman said. "Our daily consumption of energy is not something we can quickly reduce as prices spike."

When it tabled its budget in March, the New Brunswick government promised some income tax cuts worth $40 million to offset higher gas prices resulting from federal carbon pricing rules.

Meanwhile, Newfoundland and Labrador Premier Andrew Furey also weighed in Thursday, saying his province, like Nova Scotia, does not support additional increases to carbon pricing.

"We support an Atlantic Canadian approach to this issue," Furey said in a statement. "The market has increased fuel prices so much that the desired effect of carbon price increases has already been realized, and it is putting considerable strain on Newfoundlanders and Labradorians."

Furey added that his province is doing its part to fight climate change through the development of hydroelectricity and green hydrogen as well as through performance standards for its offshore oil industry.

This report by The Canadian Press was first published Sept. 1, 2022.