Premier Tim Houston unveiled Nova Scotia’s alternative to a federal carbon tax this morning. In January, Ottawa will beginning raising the price of carbon by $15 a tonne each year from the current $50 a tonne until the price reaches $170 a tonne by 2030. The province has argued that move would be “punitive” in a province where people already pay the highest power bills in the country. The goal of the federal carbon tax is to reduce pollution and bring down GHG emissions to slow down the pace of climate change.
“Nova Scotians should not be punished with a carbon tax especially when Nova Scotia has a proven record of success and has put forward a better plan,” Houston said at a news conference this morning. “This proven track record is the reason Nova Scotia should be respected when we lay out our plan to forge a path to 2030, rather than be punished by a 14 cent litre increase in the price of gas.”
In a letter from the premier’s office to federal Environment and Climate Change Minister Stephen Guilbeault, Houston claims the province’s plan is “better” because it will reduce GHG emissions by a larger amount than the federal tax and it will cost Nova Scotian families less money. Read the letter here.
Nova Scotia claims the federal carbon tax that applies to the building and transportation sector will reduce carbon emissions by only 2% in Nova Scotia whereas the made-in-Nova Scotia plan will result in a 17% reduction. This new-and-improved plan effectively ends cap-and-trade that for the past four years allowed large polluters such as Nova Scotia Power to buy credits if they exceeded their carbon “cap” or limit.
The thrust of the province’s plan is to allow the province to continue to bring down GHG emissions using a combination of hydroelectricity from Muskrat Falls and a big new chunk of wind power that would come online by 2025. (This week the province quietly approved five new wind farms with First Nations participation. Those wind farms are supposed to generate an additional 370 MW of renewable energy each year).
In its letter to Ottawa, the province argues that it should be exempted from charging the carbon tax because it can meet — or possibly exceed — the federal 2030 target of reducing GHG emissions by 40-45% below 2005 levels. Since 2005, Nova Scotia has spent money on renewable energy to reduce GHG emissions by 36% — the second best record among the provinces. According to Nova Scotia Department of Environment officials, the province is on track toward meeting a legislated goal of 53% below 2005 in 2030.
The premier said making good on these promises would be much easier if the Atlantic Loop project were to proceed but it is not essential. The $5.5 billion megaproject would deliver hydro from Quebec over a subsea cable or overhead transmission lines to the Maritimes that could back up or “balance” increasing reliance on intermittent sources of power such as wind and solar.
Scott Balfour, the chair of Nova Scotia Power, is on record as saying the only way coal-fired generating stations in this province could close by 2030 is if the Atlantic Loop proceeds. But Quebec has no shortage of customers that will pay top dollar for its energy and no long-term power purchase agreement with Hydro Quebec has materialized. And Ottawa will also undoubtedly scrutinize how reliable Nova Scotia’s power supply will be from Muskrat Falls given that the technical problems are still being worked out.
Houston said if by 2025 Nova Scotia fails to show continuing progress toward meeting the federal 40-45% GHG reduction targets, then Nova Scotia and Ottawa should reconsider whether Nova Scotians should pay the federal carbon tax. Meanwhile, he said he “hopes Minister Guilbeault will review Nova Scotia’s submission with an open mind.”
Houston estimates that by 2030, Nova Scotia’s plan would cost households less than $500 a year. Nova Scotia estimates households would spend about $3,000 a year if a federal carbon tax is imposed. But that $3,000 estimate from the province does not include rebate cheques that Ottawa would mail directly to households. Ottawa claims eight out of 10 households receive more money than they paid out in provinces that already have the federal tax, including Manitoba, Saskatchewan, Alberta, and Ontario.
The federal government said if Nova Scotia signs on, the province stands to collect $1 billion by 2030 that it could then re-distribute to homeowners and businesses through rebates.
Houston said he simply doesn’t accept the federal math because it doesn’t include “indirect costs,” such as what businesses would pay for fuel, which would then be passed on to Nova Scotian consumers. Small- and-medium-size businesses are not eligible for tax rebates from Ottawa.
Liberal and NDP critics of environmental policy were both unimpressed by the government’s proposed carbon reduction plan.
” I wouldn’t dignify it by saying it’s even a plan,” Iain Rankin told reporters. Liberal MLA Rankin is a former Environment Minister and served briefly as premier. “This is nothing more than a Power Point that goes over the same targets that have been set for some time.”
Rankin predicts the Trudeau government will reject the made-in-Nova-Scotia alternative. NDP environment spokesperson Susan LeBlanc was also disappointed with the plan.
“There are ways to address affordability and the climate crisis and Tim Houston has the responsibility to figure it out,” said Leblanc who’s the NDP MLA for Dartmouth North. “What the premier has announced won’t do this and fails to deal with the biggest polluters.”
“We can make sure that people live in warm and efficient homes with low power bills and windows that don’t leak. That is how we can tackle the climate crisis. There are any number of ideas for how to do this, from tackling the profits of Nova Scotia Power to expanding the home warming program and more, but with the end of the Green Fund and no real vision on how he’s going to deliver this for everyday people, we’re stuck playing Houston’s politics.”
You can expect to hear much more discussion about Nova Scotia’s position — from Opposition leaders and other provinces as well — over the next several weeks while Ottawa reviews Nova Scotia’s submission. If Ottawa rejects Houston’s plea to be given a few years to prove its emissions are declining quickly enough, Nova Scotians will see the introduction of the federal carbon tax on gasoline and home heating oil in January.
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It doesn’t seem credible that the Houston gov’t expects this plan to be accepted, which is to say they are choosing to default to the Federal pricing system.