A new series of reports on Canada’s climate policies from the Office of the Auditor-General can be summarized in a few words: There is (a lot of) work to do.
Serious climate policy in Canada is still in the teething stage. The current federal carbon price of $50 a tonne – 11 cents on a litre on gasoline – is a good example. Carbon pricing is Canada’s main tool for slashing emissions, which is why the price is going to steadily rise in the years to come. But for now, it’s low enough to not make much of a difference.
A lot of policies have been rushed together over a short period. Some measures, such as a new clean fuel standard, are still works in progress. And since Ottawa’s 2018 Greenhouse Gas Pollution Pricing Act, there have been two federal elections, two minority governments, considerable provincial pushback and a long fight over carbon pricing that went all the way to the Supreme Court.
It’s been a challenging environment in which to try to make sound, sensible, cost-effective environmental policies.
That may explain some of the many problems cited by the Auditor General’s commissioner of the environment. The reports detailed (ample) room for improvement in five areas: helping fossil fuel workers as the economy shifts (not nearly enough help); making government operations greener (inadequate); hydrogen’s role in cutting emissions (possibly overstated); climate projects through Infrastructure Canada (oversight lacking); and carbon pricing (an array of issues).
Carbon pricing merits particular attention. In 2030, it will be $170 a tonne, or 38 cents a litre on gas. That’s a big impact on consumer and business decisions. But before we get there, there are some defects in the system that have to be fixed.
First, carbon pricing hits some harder than others. While the average household in Ontario (one of the provinces subject to the federal consumer carbon tax, since it has no carbon pricing of its own) will pay an estimated $578 in 2022-23, it will receive a federal refund of $712, for a net gain of $134. But the audit concludes that groups such as Indigenous people, often living in remote areas, with no other options than fossil fuels, are being disproportionately impacted.
The taxing of industry is also a question. Many industries have been largely insulated from the carbon tax. They are charged on only a fraction of their emissions, to discourage them from moving production to a jurisdiction with lower standards. If an industrial operation leaves Canada, moves somewhere with no carbon tax, and then exports products back to Canada, the net result is a loss of Canadian jobs, and zero environmental benefit. To prevent that lose-lose outcome, a bunch of industries (mining, oil, cement, steel and others) get a carbon tax break.
The principle is sound but the audit pointed to a number of provinces with weaker standards than necessary. Ottawa in the early going was overly generous in signing off on weak provincial plans. The federal government is trying to create a level playing field, but more rigorous rules aren’t set to start until next year.
Common standards within Canada are necessary, but not always in place. For example, in a recent update on industrial emissions, Ontario said it was aiming for a 30-per-cent cut by 2030, compared with 2005. That’s less than the 40-per-cent cut that is Canada’s overall goal.
While the federal Liberals have at times fallen short on their promises, consider the Official Opposition. On Tuesday, Jean Charest, a top candidate for the Conservative leadership, released his climate plan. He would end the consumer carbon tax and “implement” one on industry (there already is one). He would reduce Canada’s promised emissions cut. He would give provinces more say. The plan is not ambitious – but at least it’s kind of a plan. Pierre Poilievre, virulent opponent of the carbon tax, suggested he won’t put out a green plan while running for leader.
The audit is rightly critical of the many holes in Canada’s climate framework, but it underscored one fact: Carbon pricing is “essential if Canada is to finally succeed in significantly reducing its greenhouse gas emissions.” Under that umbrella, there is still a lot of work ahead for Ottawa and the provinces, to get the details right.
Getting the details right means significantly lowering Canada’s emissions – and choosing policies that do so as fairly as possible, as efficiently as possible, and at the lowest cost possible.
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