Canadian government says it will implement a nationwide carbon tax by 2018

Canadian Prime Minister Justin Trudeau says provinces and territories can either put a direct tax on carbon emissions or adopt a cap-and-trade system. (Canadian Press)

Canadian Prime Minister Justin Trudeau has given the country’s 10 provinces and three northern territories two years to begin implementing a comprehensive tax on carbon emissions as part of his government’s pledge to adopt strong new national policies to combat climate change.

Trudeau outlined a plan Monday in the House of Commons calling for an initial levy of $10 per metric ton of emissions in 2016 — about $7.60 in U.S. dollars — that would rise in annual increments to $50-per-ton by 2022.

Provinces opting out of a carbon tax would have the option of adopting a cap-and-trade system, but only if it could be shown that such a plan could achieve even bigger limits on emissions.

Either way, provinces would be required to adopt programs to help assure Canada achieves a goal of reducing greenhouse gas emissions by 30% from 2005 levels by 2030.

“There is no hiding from climate change,” Trudeau said in his announcement. “It is real and it is everywhere. We cannot undo the last 10 years of inaction. What we can do is make a real and honest effort — today and every day — to protect the health of our environment, and with it, the health of all Canadians.”

The overall emissions reductions targets are the same as those set by the previous Conservative government under Prime Minister Stephen Harper, and environmental critics have said it is not ambitious enough.

“If we persist with Harper-era greenhouse gas targets that are among the weakest in the industrialized world, we will fail to ensure Canada does its part in holding the global average temperature increase to no more than 1.5 degrees Celsius,” Canadian Green Party Leader Elizabeth May said in a statement. “This is not a theory — it’s basic math.”

But it was clear that there will be opposition, and some provincial officials already were questioning the national government’s constitutional authority to mandate such a tax.

The environment ministers of Nova Scotia, Newfoundland and Labrador, and Saskatchewan walked out of a meeting with their federal and provincial counterparts Monday in Montreal to protest the announcement.

Saskatchewan Premier Brad Wall said in a statement that “the level of disrespect shown by the prime minister and his government today is stunning.” He called Trudeau’s plan “one of the largest national tax increases in Canadian history.”

Alberta Premier Rachel Notley warned that while her oil-rich province supports a national carbon price “in principle,” it could not endorse Trudeau’s plan without the federal government’s support for building new pipelines to transport oil from Alberta to the Pacific and Atlantic coasts.

Such infrastructure improvements are a “fundamentally important economic piece that Albertans need,” she told reporters in Edmonton. “We need Canada to have our backs.”

Last fall, Notley’s left-of-center New Democrat government announced a provincial carbon tax, set to take effect on Jan. 1, that would initially be set at $20-per-metric ton of carbon emissions in 2017, rising to $30-per-ton in 2018.

Currently, Canada’s four largest provinces have some form of carbon pricing. Ontario and Quebec have cap-and-trade systems, while British Columbia has had a carbon tax since 2008.

Caitlin Workman, press secretary to Canadian Environment and Climate Change Minister Catherine McKenna, said it is not clear whether the federal government will proceed with the national carbon-pricing scheme without seeking approval from parliament.

“This was the opening of further discussion with the provinces and their opportunity to see exactly what the parameters are and what the time frame will be, and give them the opportunity to develop their own systems as needed,” she said.

Trudeau’s announcement came as members of the House of Commons began debating the global climate agreement struck at last year’s COP21 conference in Paris. But the prime minister noted his government does not need parliamentary approval to ratify the international accord.

He also made it clear that his government would impose a price on carbon for provinces and territories that do not implement a carbon tax or cap-and-trade system by 2018.

“Whatever approach is chosen, this policy will be revenue-neutral for the federal government,” he told the House. “All revenues generated under this system would stay in the province or territory where generated.”

In the United States, Congress has resisted efforts to tax carbon or put limits on emissions. The Obama administration has adopted limits on power plant emissions — a plan that is being challenged in court— but there is no U.S. equivalent to Canada’s proposed sweeping mandate.

California and states in New England have adopted policies to cap emissions. In Washington state, a proposal going before voters next month would create the nation’s first statewide tax on carbon.