Varcoe: Consumer carbon tax under fire from provincial premiers

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What do wind turbines as tall as the Calgary Tower, Alberta withdrawing from the Canada Pension Plan and LNG have to do with increasing the carbon tax in the country?

Very little.

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Yet, they all surfaced at a parliamentary committee on Thursday, as Premier Danielle Smith appeared to discuss the incoming increase to the national carbon price.

The levy will go up by $15 to $80 a tonne on Monday.

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For motorists, it will add about three cents a litre to the price of gasoline.

The provincial fuel tax will also increase by four cents a litre on the same day as Alberta’s fuel rebate disappears — something the provincial NDP called on the province to cancel on Thursday.

During her hour-long virtual appearance, Smith made the point the federal carbon tax is hitting the pocketbooks of Albertans struggling with inflation.

“This isn’t just reckless. It’s immoral,” she told the committee.

Smith was the third premier to make the case against the carbon tax in the past two days before a parliamentary committee.

But it didn’t take long during questioning by MPs from various parties to veer to other issues and agendas: the UCP government’s pause on approving new renewable projects, the Alberta sovereignty act, the debate over the province pulling out of CPP, and the potential for growing Canadian LNG exports.

“What I would make of it is that the MPs don’t really know very much at all about what any of the provinces are doing to reduce emissions,” Smith said after the appearance.

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“They have a number of preconceived notions, thinking that the only solution is to put a retail carbon tax on people, which is, in our view, a punishing tax…

“They’d be far better partnering with us on the things that we know will achieve outcomes, like building out the hydrogen infrastructure, like helping us with (developing) small modular reactors, like supporting us in carbon capture and net-zero projects.”

The appearances by Smith, Saskatchewan’s Scott Moe and New Brunswick’s Blaine Higgs were a partisan effort by the Conservative premiers to put an intense spotlight on an unpopular federal tax — just like it was when Liberal MPs tried to shift the spotlight on to Alberta’s controversial pause on renewable projects or the CPP.

Fair enough.

Yet, Smith’s point still holds: the provinces have taken steps to reduce emissions and need more federal backing.

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Alberta was the first province to introduce a carbon price on heavy industrial emitters, a policy adopted by Progressive Conservative premier Ed Stelmach in 2007.

Under NDP premier Rachel Notley, Alberta agreed to phase out coal-fired electricity generation by 2030. Coal use will completely disappear in the coming months, six years ahead of schedule.

Last year, Alberta finally adopted a net-zero target by 2050, although specific details are still under development.

“There is no single approach to reducing emissions that works for every part of the country,” said Marla Orenstein, director of the Natural Resources Centre at the Canada West Foundation.

“That being said, we need to make sure that those differences aren’t used as an excuse for either inaction or less movement towards net zero than is needed.”

However, the carbon tax is deeply unpopular. As housing costs and food bills continue to escalate, the tax will dangle overhead like a pinata, waiting to be struck.

Prime Minister Justin Trudeau has accused the Conservative premiers of “misleading Canadians.”

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Earlier in the week, he released a letter to the premiers, defending the carbon price and pointing to rebates returned to most Canadians.

“Putting a price on pollution is the foundation of any serious plan to fight climate change,” Trudeau wrote. “It is the most efficient way to reduce emissions across the country.”

Many economists agree.

More than 340 signed an open letter this week, saying the carbon levy reduces emissions at a lower cost than other measures, and that it has a negligible effect on overall inflation.

“If you put 100 economists in a room, they’re not going to agree on very much,” said University of Alberta energy economist Andrew Leach, who signed the letter.

“If you ask them what’s the most cost-effective way to attack greenhouse gas emissions, almost all of them will say carbon pricing.”

In his appearance at the parliamentary committee on government operations and estimates, New Brunswick’s premier talked about reducing emissions globally and displacing coal by exporting liquified natural gas (LNG).

“We could ship to Europe and shut down coal plants,” Higgs said. “That’s the plan. Simple.”

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Smith also spoke about exporting LNG and hydrogen to Asia to cut emissions in other countries. She pointed to new decarbonization projects advancing in Alberta.

Those include Dow building the world’s first net-zero integrated ethylene cracker and derivatives complex in Fort Saskatchewan — costing $8.9 billion — and Air Product’s new net-zero hydrogen production and liquefaction facility in northeast Edmonton.

Both projects tapped into federal and provincial incentives.

Yet, other proposed carbon capture and storage projects are waiting for final approval of a federal investment tax credit and promises of carbon contracts for difference.

Liberal MP Yasir Naqvi, who represents Ottawa Centre, pressed Smith about her government’s pause on approving renewable projects, and why it won’t allow wind turbines near pristine “viewscapes,” while drilling rigs can operate in the areas.

“They’re not the same size as the Calgary Tower,” she replied.

Leach would like to see provinces take the lead, driving innovation and policies to lower emissions, but said the three premiers aren’t making that case for more stringent action to address climate change.

However, it’s the consumer carbon tax squarely under fire today.

“This is no longer a single party issue … because affordability, cost of living, inflation — and the government’s roles to play in that — have become a ballot box question,” said Michael Solberg, a political strategist and partner with New West Public Affairs.

“There’s plenty of blood in the water here.”

Chris Varcoe is a Calgary Herald columnist.

cvarcoe@postmedia.com

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