Opposition attempts to hit reset on N.S. carbon pricing bill

Opposition members say amendments to the Environment Act that would price pollution for the two largest emitters in Nova Scotia is a half measure that will lead to a carbon tax on gas, diesel and home heating oil being imposed on consumers.

But the environment minister says efforts by opposition MLAs to send the bill back to the department for further evaluation risks having the carbon tax apply to everyone.

The bill is stalled as members debate a hoist motion by the Liberals. If successful, that motion would send the amendments back to the Environment Department for three months for further consideration.

In an interview Friday at Province House, Environment Minister Tim Halman said he welcomes "robust debate," but said his government would not support the hoist motion because it would delay passage of the bill beyond the federal deadline for provinces to have an approved plan in place for pricing carbon.

"If we don't have our regulations in place to hold large emitters accountable by Jan. 1, the federal backstop on large emitters could be imposed," he said. "And that's dangerous because that would result in an eight per cent increase in power rates for Nova Scotians."

Halman has said the provincial program would limit power rate increases to two per cent.

Cap-and-trade program to expire next year 

Since 2019, Nova Scotia has priced carbon using a provincially designed cap-and-trade program. That's prevented the province from seeing the same spikes in gas prices experienced in other provinces that have a carbon tax.

But the program is set to expire next year as new federal pricing standards kick in. The price per tonne of emissions will increase to $65 from $50 next year, and will go up by $15 annually until reaching $170 per tonne in 2030.

Provinces have the option of accepting the federal carbon tax as a plan, coming up with their own — which would need to be approved by Ottawa — or using a hybrid model that would combine the two options.

Initially, Premier Tim Houston's government opted for none of the above, arguing that Nova Scotia should be exempt from pricing carbon because of its legislated targets for greenhouse gas emission reductions and plans to expand the use of green energy by 2030.

The federal government swiftly rejected that proposal, and that led to Halman's announcement last week of an output-based pricing system for the province's two largest emitters — Nova Scotia Power and Lafarge — with the program being voluntary for other industrial emitters.

Environment Department officials believe other companies will sign on to the plan because the alternative to the provincial program would be the federal carbon tax, which would be more expensive.

But while opposition members have welcomed the plan for large emitters, they say that by not presenting an option for how to tackle pricing consumer fuels, such as gas, diesel and furnace oil, the provincial government is abdicating its responsibility and inviting the federal carbon tax.

Province risks losing control of money

Outright opposition to the carbon tax means the province also risks losing control of the money it would generate and how it would be used within Nova Scotia. Federal officials have said they would use the money to send cheques to residents to help offset the impacts of the tax.

"They're giving up a way for Nova Scotia to control the funds to do what's right for Nova Scotia by just sitting back after a year and saying, 'Here's half of the option, you guys go ahead and do a carbon tax,'" said Liberal environment and climate change critic Iain Rankin.

"They're putting politics ahead of doing what's right for Nova Scotians. It's easier for them to blame the federal government that a carbon tax is coming, when they're actually bringing legislation forward that makes that happen."

NDP environment and climate change critic Susan Leblanc said the provincial government has opted to play politics with the issue of pricing carbon for consumers, rather than do the work required to come up with a credible plan that would satisfy federal regulations while also dampening the blow for consumers.

"What is the result is that Tim Houston and this bill is essentially going to impose a carbon tax on Nova Scotia," she said. "This idea that, you know, the feds are imposing this carbon tax on us, it's just not true. It's smoke and mirrors."

A year to come up with plan

Leblanc said the Tories have had a year since coming to power to formulate a plan, and they would have known even before that that it would be a requirement for whatever party formed government after the last election.

Rankin said the government should have argued for a short-term extension of the cap-and-trade system to allow the province to continue to meet federally required targets while negotiating a better long-term deal for Nova Scotia.

But Halman said that and other options were considered. Ultimately, his government landed where it did with the legislation that's before the House, the "only viable option" for Nova Scotia to protect the environment and ratepayers, he said.

"The feds are very strict and I'd say dogmatic when it comes to the pricing of carbon on the commercial and the industrial side."

The Tories are hoping to persuade the federal government that their mutual goals can be achieved using methods other than a carbon tax, such as increased investments in efficiency and green energy programs.

Halman will find out within the next month or so just how persuasive that argument is.