Feds hike carbon tax, scale back Clean Fuel Standard
Ottawa unveiled its newest climate change measures last week, pledging to more than triple its carbon tax in under a decade and introducing what amounts to a second carbon tax on liquid fossil fuels through the Clean Fuels Standard.
In announcing the measures, Prime Minister Justin Trudeau said the carbon tax would climb to $170 a tonne by 2030, from $50 a tonne in 2022, which is expected to add more than 27 cents per-litre to the cost of gasoline by 2030, though the government said it will increase rebates to Canadians.
The announcement came as the Supreme Court of Canada has yet to rule on the constitutionality of the carbon tax, a challenge brought forward by some provinces. The latest measures depend on the high court upholding the federal government’s right to impose the tax.
With growing concern over the Clean Fuels Standard, the government scaled back the standard to cover only fuels such as gasoline, oil and diesel. More details on the fuel standard are expected to be released this week.
The Clean Fuel Standard requires energy producers, distributors, and retailers to reduce carbon fuel content in their fuels with limits becoming increasingly stringent. The introduction of the Fuel Standard came as regions across the country voiced concern, as it is viewed as overly onerous and tantamount to a new tax on carbon emissions that will trickle down to consumers.
Last week, echoing earlier fears raised by the Atlantica Centre for Energy and others, Atlantic Canadian Energy Ministers sent a joint letter to Environment Minister Jonathan Wilkinson raising issues about the disproportionate impact the standard will have on the region and how it will increase costs for businesses and citizens at a time they can least afford it, given the economic devastation wrought by COVD-19.
In the government’s climate plan, the Prime Minister aims to reduce carbon emissions in the country by 30 per cent by 2030 and includes a promise to spend $15 billion combatting the emissions.
Among the spending promises were a $1.5 billion fund to explore other fuel alternatives, including hydrogen; nearly $1 billion to modernize electrical grids and more than $6 billion on energy efficiency retrofits.