Government to approve ad-hoc carbon prices for big emitters

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Government is to approve ad-hoc carbon prices in Ontario and New Brunswick for big emitters

The federal government will approve new carbon prices for big industrial emitters in Ontario and New Brunswick. The two provinces will therefore use their own carbon-pricing system, rather than the federal one. Meanwhile, the Supreme Court of Canada will soon decree whether the government can impose federal carbon-pricing at all to the Provinces and Territories.

The new carbon-pricing system of Ontario and New Brunswick does meet federal standards. Environment Minister Jonathan Wilkins said: ‘Today we have recognised that technically Ontario and New Brunswick’s systems have met the benchmark’. However, he made clear that the government was not happy about the situation. ‘They produce significantly less in the way of emissions reductions than the federal backstop that is currently in place, and that is an issue’.

The federal carbon-pricing system identifies two specific requirements: the price, and the source of emissions that price impacts. In short, even the federal carbon-pricing does not require to reduce emissions at all. One of the contentious points is the way the federal system and the new system in Ontario and New Brunswick set thresholds. The federal system sets thresholds to emissions by industry (hence one specific limit for steel, one for cement, etc). On the contrary, the new Ontario and New Brunswick system sets threshold by facility. This means, most of the time, that the threshold is higher than the federal one.

Still Ontario Envinroment Minister Jeff Yurek stated: ‘Ontario’s regulation covers the very same polluters as the federal system’. ‘There are no free passes, and no one is off the hook’. Ontario and New Brunswick are effectively making advantage of loopholes in the legislation. The government is expected to close such loophole by 2022, when they will review the legislation.