Mark Cameron: Premier Pallister's climate plan a solid start
Premier Brian Pallister has released his government’s long-awaited "made in Manitoba" climate and green plan. While there is room for improvement, it is a solid start for Manitoba on climate policy, and one with important implications across the country.
Pallister’s plan is the first time that a Conservative government has introduced a broad-based carbon price in Canada. While B.C. and Quebec brought in carbon pricing under the centre-right governments of Gordon Campbell and Jean Charest, their parties were labelled "Liberal," and Alberta’s former PC government had only a limited carbon price regime for large emitters.
The politics of carbon pricing have become more polarized across the country since then, with most Conservatives lining up against it. But here we have a Progressive Conservative government, led by a former Stephen Harper MP, bringing in a carbon tax. This shows that you can be a Conservative and still care about climate change and the environment.
That tax will start at $25 per tonne, which is the highest initial rate of any carbon price in Canada. True, the plan does not anticipate any increase in prices over the first five years, but by starting at a relatively high price Manitoba has indicated that it is serious about pricing carbon and reducing emissions.
Manitoba has shown that it wants to be master of its own fate. The government has announced it will consult widely on the potential use of carbon revenues — expected to be around $260 million per year — while putting the priority on easing the burden on low- and middle-income households.
Manitoba is charting its own course rather than waiting for Ottawa to impose a federal carbon tax. Manitoba’s own legal opinion, by respected University of Manitoba law professor Bryan Schwartz, concluded that the province would have no legal ability to withstand a federal carbon price. If Manitoba waited for Ottawa to act, it would be up to the Trudeau government to decide how to spend any carbon-tax revenues.
This is something that Manitoba’s neighbours in Saskatchewan and other provinces should keep in mind — failure to bring in their own carbon price will lead to a unilateral imposition of the federal plan, and a loss of control over where the money goes.
Manitoba was also wise to adopt output-based pricing for its large industrial emitters. This will allow large emitters, many in export-oriented sectors such as fertilizer or minerals, to be rewarded for reducing their emissions but also maintain their competitiveness internationally.
The climate plan contains other worthy ideas, from waste diversion to greater use of biofuels to electrifying buses, that will result in more emissions reductions. Where possible, Manitoba should use carbon pricing as its main method of reducing emissions, using additional measures only where they can achieve greater reductions at lower cost.
Manitoba’s plan isn’t perfect, and many details remain to be worked out. In our view, while a $25-per-tonne carbon price is a good starting point, the plan would have been stronger if it had indicated planned increases. Businesses and consumers will react more strongly to a carbon price signal if they believe that the price is likely to rise in future years.
A higher carbon price will only be acceptable to citizens if they don’t believe the money will simply be swallowed up by other government programs. The Pallister government should commit to making their plan revenue-neutral and returning 100 per cent of carbon revenues to taxpayers. In particular, Manitoba should ensure that lower- and middle-income households will not face a higher cost of living, perhaps through a direct rebate to households.
Some have criticized the plan for not committing to the federal target of reducing greenhouse gases by 30 per cent below 2005 levels by 2030. But that is a national target, and it is hard to imagine how Manitoba, acting alone, could achieve that level of reductions internally. Manitoba has 99 per cent clean electricity already, thanks to its abundant hydro resources, and has much higher levels of agricultural emissions than most provinces, which are not covered by carbon-pricing systems.
Achieving a 30 per cent reduction from the remaining emissions in such areas as transportation and buildings would be a very difficult goal indeed. What Manitoba should be measured against is whether its efforts are comparable with the efforts of other jurisdictions. On that level, Manitoba’s plan lines up well with the plans of other provinces.
With his "made in Manitoba" climate plan, Brian Pallister has shown that one can be a solid fiscal conservative but still respect climate science and care about the environment. It reminds us, as the late American conservative thinker Russell Kirk put it, that "nothing is more conservative than conservation."
Mark Cameron is executive director of Canadians for Clean Prosperity.