Weaker industrial emissions pricing undermines climate targets, future competitive positionPembina Institute reacts to federal approval of Ontario, New Brunswick output-based pricing systems

Sept. 21, 2020

Smoke from stack

OTTAWA — ISABELLE TURCOTTE, federal policy director at the Pembina Institute, made the following statement in response to news the federal government is accepting Ontario and New Brunswick’s output-based pricing systems:

“The federal benchmark for an industrial carbon pricing system was written to give a lot of flexibility in how provinces develop their own systems, which is unfortunately leading to the uneven application of this powerful tool across the country.  Moving forward, the federal government should articulate clear minimum requirements to ensure provinces are incentivizing innovation so Canadian industry is poised to compete globally, while achieving meaningful carbon emissions reductions that will help Canada reach climate targets in a timely way.

“The Ontario and New Brunswick systems are weaker than Alberta’s, B.C.’s, and the federal carbon pricing system for heavy emitters which is currently in application in Ontario and New Brunswick. It’s also important to note that the federal system provides more relief through more generous limits (or emission intensity standards -- the point over which the price would begin to apply) to industrial sectors than warranted by their own international competitiveness analysis.

“The bigger concern is that Ontario, which is responsible for 22 per cent of Canada’s emissions, has yet to show how it will meet its 2030 target: If the province applies a weaker carbon pricing policy for heavy emitters, how will it compensate elsewhere? What’s the trade-off?

“Because the price under the systems in Ontario and New Brunswick is applied to such a small percentage of emissions, both the climate benefit and the incentive to innovate to decarbonize are minimized. This is unfortunate because this delay in timing and ambition won’t help position the provinces’ industries to compete in a low-carbon global economy.

“New Brunswick’s system in particular lacks ambition, stringency and incentive to shift toward cleaner sources of electricity. We are disappointed these weak pricing systems were granted approval.”



Report: Carbon Emissions: Who makes big emitters pay?
Media release: B.C. makes industrial polluters pay, while Alberta, Ontario, and New Brunswick lag


Sarah MacWhirter, Communications director, Pembina Institute

About the Pembina Institute

The Pembina Institute is a non-profit think-tank that advocates for strong, effective policies to support Canada’s clean energy transition. We have offices in Vancouver, Calgary, Edmonton, Ottawa and Toronto. Learn more: www.pembina.org


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