Carbon tax coming to Nova Scotia next summer, federal minister ‘baffled’ by Houston’s pleading

Nova Scotians will begin paying a price for carbon contained in fuels used to heat homes and operate their vehicles starting July 1, 2023.

Federal Environment and Climate Change Minister Steven Guilbeault made the announcement about the Climate Action Incentive Tuesday afternoon.

Nova Scotians will receive their first quarterly rebate cheques the same month the tax comes into effect. That amount will vary based on the number of people in the household. Residents of rural communities will receive an additional 10%.

Until recently, the expectation was that Ottawa would implement the carbon tax in Nova Scotia and increase the price per tonne from $50 to $65 in other provinces starting on Jan. 1, 2023.

At a news conference held in Ottawa via Zoom Tuesday afternoon, Seamus O’Regan, the federal labour minister and the Newfoundland representative in Prime Minister Justin Trudeau’s cabinet, offered an explanation for the change in the timing.

“Two things are clear right now: first, inflation is tough, and households are feeling the pinch and everything we do has to take that into consideration,” O’Regan said. “Second, climate change is real, and it is not taking a break because of inflation. This is about making life more affordable while lowering emissions.”

Guilbeault said eight out of 10 Canadian families will receive more money from Ottawa than they pay in carbon tax every year. Cheques will be sent out automatically based on information contained on income tax returns describing the size of a household, number of vehicles, and estimated annual heating costs. 

Guilbeault said an “average” family of four in Nova Scotia could expect to receive $248 every three months, beginning July 1. That compares to $244 for a family of four in Ontario, $240 in PEI, $328 in Newfoundland and Labrador, and $386 in Alberta. Guilbeault said 90% of the billions of dollars collected by the pollution levy will be returned to consumers. The remaining 10% will be shared among farmers, Indigenous people, and businesses. 

The federal government has accepted a last-minute output-based pricing system proposed by Premier Tim Houston’s government that establishes emission reduction targets and penalties for large polluters such as Nova Scotia Power and Lafarge, a cement manufacturer. Guilbeault said in August that Houston had indicated such a plan was not feasible.

Houston disappointed with decision

By October, the province had changed its mind — primarily to avoid a federal carbon tax being levied on Nova Scotia Power, which would have been charged back to consumers just as power rates are about to increase. That’s a big relief for Nova Scotians, but it didn’t get so much as a mention in a news release issued by Houston Tuesday afternoon. It reads in part: 

I want to express my profound disappointment in the decision by the Government of Canada to impose a carbon tax on Nova Scotians at a time when fuel and heating costs are at an all-time high and many Nova Scotians are struggling.   

Let me be clear: Nova Scotia supports action on climate change but doesn’t support a carbon tax of any amount on home heating oil at this time. It’s incomprehensible to me that the federal government doesn’t agree.

Guilbeault countered that argument by saying prices triggered by the federal carbon tax have risen “on average about three cents a litre across the country. Meanwhile, refining margins in Canada have gone up 100% in the past two years. The fact it is costing people more to heat their home and fuel their vehicles, it’s not because of pricing pollution in Canada; its because of oil companies making a lot of money out of this and because of international issues such as the illegal invasion of the Ukraine by Russia.” 

Houston’s letter continued the war of words between the two levels of government: 

Our government is working to expand the Heating Assistance Rebate Program and looking at long-term solutions to increase energy efficiency and make life more affordable. We fought this carbon tax to the end, including reaching out to the federal Minister of Environment and Climate Change last night to ask him to reconsider. We still implore the federal government to reverse this poorly timed decision.

Environment minister ‘baffled’ by premier’s position

Guilbeault was not impressed by Houston’s pleading.

“I’m extremely disappointed by this reaction. I’m not super popular in Alberta or Saskatchewan [both Conservative provinces], and yet we were able to quickly come to agreement with these provinces. There was no drama in the media,” Guilbeault told reporters, who asked him for his take on Houston’s letter.

“I find it unconscionable, really, that Premier Houston would have this type of attitude after what we’ve seen in Atlantic Canada with the passage of the most severe hurricane in the history of Canada. Lives were lost and this is because of climate change.  

“I’ve just come back from COP27 in Egypt and all the experts who have studied climate change say putting a price on carbon is one of the most effective ways to fight this. Frankly, I’m baffled by Premier Houston’s position.”