Trudeau to Higgs: Don’t like the carbon tax? Propose an alternative

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OTTAWA • Prime Minister Justin Trudeau is calling on premiers opposed to increasing the carbon tax to propose credible alternatives.

Trudeau has now written to seven premiers, including Premier Blaine Higgs, who have been calling on Ottawa to pause or scrap altogether an imminent April 1 hike to the federal price on carbon.

It’s part of a back and forth that will also see four Conservative premiers, including Higgs, appear in front of a House of Commons committee over the next two days.

In his publicly released letter, the prime minister states the provinces haven’t put forward suitable replacements to the federal backstop, but could.

But Trudeau also makes a small mention that New Brunswick – the only one of the seven critical provinces – had its own carbon tax alternative that met federal standards just last year, while adding that Ottawa “remains open” to proposals for credible alternatives.

“When we last engaged with provinces and territories on this in 2022, all of your governments either did not propose alternative systems or (with the exception of New Brunswick) proposed systems that did not meet the minimum standard for emissions reductions,” the letter reads.

“However, we continue to remain open to proposals for credible systems that price pollution that reflect the unique realities of your regions and meet the national benchmark.”

Higgs scrapped his own made-in-New Brunswick carbon tax last year.

That was because Higgs said he wanted New Brunswickers to at least get the carbon tax rebate cheques Ottawa is handing out.

Ottawa’s climate plan requires provinces to implement a carbon price that matches national standards. If a province does, it then decides what to do with the revenue.

That’s unless a province refuses to do so, resulting in the feds sending direct rebates to families.

In New Brunswick, the Higgs government had designed a provincial system deciding what to do with the revenue, giving some of the money back to New Brunswickers, but not all of it.

The system included a modest income tax cut, while the government also previously lowered the provincial gas tax to help offset the federal tax.

But it is also spending some of the revenue to fund climate projects.

Then amid the increasing pressures of inflation last year, Higgs decided to repeal the provincial tax and accept the federal backstop.

“What this does right now is provide relief,” Higgs said last February. “I would rather see no carbon tax at all. … But I don’t have a choice.

“So given that, how do we get relief to people who want it right now, in their homes, at a time when inflation is higher than they’ve experienced, maybe in their lifetime? This will do that.”

Trudeau’s letter defends, at length, those rebate payments.

“Our government is acutely aware of the increasing financial pressure facing Canadians, we know that they want us to help make life more affordable,” it reads. “That is exactly why we designed the federal carbon pricing backstop to be revenue neutral to the federal government.

“As the price on pollution increases, so does the Canada carbon rebate, which means Canadian families can expect more money in their bank accounts on a quarterly basis.

“Rebates are about to go up.”

The carbon tax currently adds an extra 14.3 cents a litre to the price of gasoline, while also impacting the cost of other carbon emitting fuels, including natural gas.

The tax will increase to 17.6 cents a litre on Monday.

But offsetting that are cheques that New Brunswickers will soon get, as early as April 15.

It means $190 quarterly for a family of four and $95 for individuals in New Brunswick.

That’s $760 for a family of four over the next year, and $380 for individuals.

It’s a figure that increases to $912 for families and $456 for individuals who live in rural areas.

The four Conservative premiers are expected to tell a House of Commons committee this week why Trudeau should ditch the planned increase in the federal carbon tax.

Saskatchewan Premier Scott Moe appeared on Wednesday where he touted how inflation in the province dropped to 1.9 per cent in January compared to 2.7 per cent in December, after his government’s decision to stop collecting carbon tax.

Statistics Canada did highlight in its report that Saskatchewan’s decision to stop collecting the carbon levy contributed to a 26.6 per cent price decrease in the cost of natural gas year-over-year in the province.

But Moe also faced questions as to why he hasn’t cut taxes, such as the provincial sales tax on home heating, if he is so concerned about the cost of living.

Meanwhile, Higgs is scheduled to appear on Thursday at 11 a.m. AT via videoconference.

Alberta Premier Danielle Smith and Nova Scotia Tim Houston have also asked to appear.

Higgs has shared a copy of a letter he sent in an attempt to appear to “make the case as to why the federal government must – at a minimum – cancel the planned increase.”

Meanwhile, Trudeau also cites how rural rebates are about to double, and that 97 per cent of farm emissions are exempt from carbon pricing, while maintaining that the country must fight climate change.

“Our government also knows that Canadians care about fighting climate change,” reads the letter. “The devastating effects of floods, wildfires, and droughts are escalating costs annually, destroying homes, ravaging communities, and inflating the prices of food and consumer goods.

“Putting a price on pollution is the foundation of any serious plan to fight climate change.”