Opinion: McKenna must herd cats for climate plan

On the day Alberta raised its carbon price to $30 a tonne, a message on a huge gas station sign in Spruce Grove attracted a lot of attention.

It initially used a one-word profanity to attack NDP Premier Rachel Notley and Prime Minister Justin Trudeau, before changing it to the more demure “NDP CARBON TAX HURTS ALL.”

This will be the year of the carbon tax in Canada and, for federal Environment Minister Catherine McKenna, a year of herding the cats to get all provinces and territories on board with a carbon tax of $10 a tonne on emissions by the end of this year, climbing to $50 a tonne by 2022.

She and Trudeau will have to use the big stick to bring a couple in line.

But the political future of Notley will be key to a national plan.

Right now, four provinces are on track to meet or exceed the federal benchmark – British Columbia with a $35 per tonne tax to be implemented in April, Alberta at Notley’s $30 price and Ontario and Quebec with cap-and-trade programs that will get them where Trudeau wants them.

That is 80 per cent of the country’s population already living under carbon pricing without the sky falling.

Manitoba is on track for two years, but Ottawa says it will fall short of its target by 2020 under its current plan.

New Brunswick and Nova Scotia have introduced plans that do not appear to get them to Ottawa’s threshold.

New Brunswick has merely re-purposed gas taxes for a climate change fund and McKenna has given it a failing grade. Premier Brian Gallant appears dug in.

Saskatchewan, under outgoing premier Brad Wall, refused to play nice with Ottawa. That does not appear to be changing as the Saskatchewan Party picks a new leader this month.

But critics rightly wonder why McKenna is giving other provinces until the end of this year to get their programs in order when a national plan merely had to go from 80 per cent to 100 per cent.

In late December, McKenna and Finance Minister Bill Morneau laid out the timeline for the provinces.

Draft legislation implementing the federal benchmark is expected this month.

Provinces or territories that choose to have the federal government impose its program have until March 30 to signal that intention and those who will design programs that comply with Ottawa’s pricing level have until Sept. 1 to show how they are going to get there.

Provinces that don’t make Ottawa’s grade will have the federal government do it for them on New Year’s Day 2019. The Ottawa plan will remain in effect until 2022.

A spokesperson for McKenna says the minister doesn’t foresee any battles with provinces, but says “hard things are hard.”

Erin Flanagan, the director of federal policy for the Pembina Institute, told me she believes Ottawa has “largely set itself up for success” by laying out a clear process and ensuring it has the legal right to impose its benchmark on recalcitrant provinces.

But there are major speed bumps ahead. Ottawa will return all revenue to provinces that have a price imposed on them, but will there be strings attached?

Ottawa could force provinces to spend that revenue reducing greenhouse gas emissions.

And this is where the alliance between Trudeau and Notley comes in.

Notley will need a pipeline victory to win re-election against opposition leader Jason Kenney. And Trudeau will be forced to either become more vocal about the need for the west coast Trans Mountain pipeline expansion, costing him support in British Columbia, or stand back and let Notley fend for herself, potentially costing him a key ally in the spring of 2019.

Kenney, if elected, would repeal the Notley carbon tax.

“We are not solving this problem without Alberta,” Flanagan says.

“The province has different politics and a different history.”

Alberta accounts for 38 per cent of Canadian emissions, highest in the country, but the Notley tax costs Albertans more than any of the three provinces on track to meet Trudeau’s targets.

One can easily imagine a battle with a Kenney government over where Alberta revenues are spent, and the blowback on Trudeau imposing a federal price in a province historically unfriendly to his party and the name Trudeau would be fierce.

Trudeau, reluctantly or not, is likely going to have to give Notley a boost.

Tim Harper is a national affairs writer

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