On Wednesday, Aug. 1, Environment Minister Catherine McKenna announced modifications to the federal government’s carbon tax plan, which will come into effect next year.
While the changes will not impact the plan to put a $20 per tonne price on emissions, a penalty which will gradually rise to $50 in 2022, the threshold is increasing for emissions that businesses can produce before they will have to face these penalties.
Most businesses producing 50 megatons of carbon dioxide or similar levels of pollution each year won’t face any penalties until their emissions reach 80 per cent of the average within their specific industry. The previous limit was 70 per cent, according to a framework published July 27 by Canada’s ministry of environment and climate change.
The limit will rise to 90 per cent in four industries facing “high” competitive risks — cement, iron and steel, lime and nitrogen fertilizers.
The federal government will begin putting a price on emissions in 2019 in all provinces that have not already adopted an alternative federally approved plan.
As of now, Alberta, British Columbia and Manitoba have their own carbon pricing plans in place. Quebec is part of a cap-and-trade system, linked with California — as is Ontario, but the province’s new Progressive Conservative government has joined Saskatchewan in a court case challenging the federal government’s jurisdiction to impose a carbon price on provinces. Nova Scotia has a cap-and-trade system planned for next year that will likely gain federal approval. Prince Edward Island and New Brunswick have put forward plans that are unlikely to meet the federal requirements. Newfoundland has not yet disclosed its plan.
While Restaurants Canada appreciates the federal government’s mandate to incentivize environmental stewardship, the impact that carbon pricing has on the foodservice sector must be mitigated wherever possible. Penalties on high-emitting manufacturers and food producers will trickle down to foodservice operators, who depend on a multitude of products from across Canada to run their businesses. These businesses, and small business operators in particular, face difficult decisions in the wake of increases to production costs, which can have market-wide consequences for workers and consumers.
While further action is still needed to alleviate these challenges for foodservice operators, the latest update to the federal government’s carbon pricing plan is a step in the right direction. Restaurants Canada commends the ministry of environment and climate change for taking the concerns of foodservice businesses into account with this change and is looking forward to making sure their experiences continue to be represented as discussions around carbon pricing continue.
For more information, check out the following articles:
Ottawa eases carbon tax thresholds to help Canada’s big industries compete (Financial Post)
Trudeau Government Scaling Back Carbon Tax Amid Competitive Threats From U.S. (HuffPost)