In the final hours before Ottawa’s Sept. 2 deadline for provinces to submit proposals around the implementation of a rising federal carbon tax, the Houston government has changed the proposal it submitted two weeks ago.
As the Halifax Examiner reported earlier this week, the federal government rejected Premier Tim Houston’s plan to meet federal requirements without a tax.
The new version still does not include a carbon tax; what it does is ask Ottawa to allow Nova Scotia to establish performance standards or limits on how much carbon large polluters like Nova Scotia Power and LaFarge Cement can emit.
According to Jason Hollett, associate deputy minister of Environment and Climate Change in Nova Scotia, the current federal standards regulate emissions from each power plant based on the fuel type. The proposed provincial standards would regulate Nova Scotia Power’s emissions as a whole or in total, offering the utility more flexibility about how they cut GHG emissions as well as lowering the company’s compliance costs.
An analysis by the province suggests power rates could rise as much as 7% over the next few years if Ottawa does the regulating. Under Nova Scotia’s model, known as an “output-based pricing system,” the government said power rates would rise only 1%.
“Rate impacts for consumers are minimized while leading to similar emissions reductions,” Hollett told reporters at a Friday afternoon briefing.
Environment Minister Tim Halman denied Nova Scotia Power was the reason for the last-minute change in the province’s proposal.
“It wasn’t NS Power coming to us,” Halman said. The minister said the change was one of many options the province has to ensure the government “has Nova Scotians’ back.”
Companies that emit between 10,000 and 50,000 tonnes of carbon a year would have the choice of paying the carbon tax directly or submitting to a performance standard to be established by the province that would limit their carbon emissions. If a company exceeds the limit, they would pay the tax — $65 a tonne in January, climbing to $170 a tonne by 2030.
This type of “output regulation” is used by New Brunswick, Newfoundland, Ontario and Saskatchewan but those provinces also have a carbon tax.
Halman continues to reject a carbon tax. He said now is not an appropriate time and that Nova Scotia is on track to cut emissions using legislated targets that will accomplish deeper cuts than Ottawa’s benchmarks.
No to carbon tax, yes to the money
In its updated submission to Ottawa, the Nova Scotia government said that while it disagrees with a carbon tax, it wants Ottawa to give it control of the $1 billion the tax it’s expected to generate by 2030 if it is put in place. What will the government do with that new money?
“I can tell you we will be assisting Nova Scotians,” Halman said. “Affordability is top of mind. In all likelihood, there will be rebates.”
If the federal government keeps the tax, Ottawa guarantees low and middle income households receive rebates four times a year. They say 80% of four-person families actually receive more in rebates than they pay for home heating oil, gasoline, and natural gas.
NDP Energy spokesperson Susan Leblanc supports rebates for people who will be hard hit by a combination of inflation and now, a near-certain carbon tax. But she is not supportive of the provincial government controlling the purse strings.
“Frankly, it scares me”, said Leblanc, the Dartmouth North NDP MLA. “Because when we see how the government has handled this file for the last year — ie they have done nothing — and now that the province decides to take control of that money, the minister did not commit to rebates. He said affordability was top of mind, what does that mean?
“If he had said, ‘Yes, we are definitely going to do a rebate,’ then I would feel more hopeful. Right now, I feel it has been mishandled and we are going to pay the cost of that.”