Canada’s regional governments press on with carbon pricing

Alberta is moving into phase two of its carbon levy and Ontario has expanded its cap and trade market. The moves mirror similarly anti-emissions sentiments in Federal governments.

Introduced in 2017, Alberta's carbon tax is being raised from CA$20 to CA$30 per tonne of CO₂. In a statement, the Alberta government said that the funds raised would go into improving infrastructure and creating green jobs. They also highlighted other parts of their green agenda, including tax rebates on technology like solar panels and more efficient water heating systems.

Ontario also implemented new carbon-reducing legislation. Their cap-and-trade system sets emissions allowances for companies. Those who produce less than their allowance can sell the rest to a company who has exceeded theirs. In the November 2017 auction, the province raised CA$422 million (€279 million), which will be invested in anti-emissions programmes.

Canada and Quebec have introduced similar programmes, allowing companies to trade and buy surplus carbon allowance in a joint market. Following the success of internal auctions in 2017, Ontario has joined this market as of 1 January 2018 in order to make the system more cost-effective.

But these programmes have seen criticism. Despite claims that 60% of citizens will receive a rebate for the tax, Alberta’s increased carbon levy has not been received well, after it impacted heating and fuel costs for consumers. And in Ontario, in the Auditor General’s 2016 report, she pointed to a potential loss of capital in the joint market if carbon allowances are cheaper in California or Quebec.

However, the Pan-Canadian Framework on Clean Growth and Climate Change, introduced in 2016, states that all provinces must have some kind of incentive for carbon reduction by 2018 or have a federal plan imposed on them.