STORY CONTINUES BELOW THESE SALTWIRE VIDEOS

Despite a letter from Premier Tim Houston asking that he not, it appears likely federal Environment and Climate Change Minister Steven Guilbeault will impose a carbon levy on Nova Scotia next year.

That means an added 14 cents a litre to the price of gas at the pumps and an increased cost to the consumer for pretty well all forms of fuel or energy that involve burning carbon.

It also means a quarterly rebate cheque for middle and low income Nova Scotians from the feds that is meant to offset the added cost of the carbon levy.

“It’s a safe bet to say (the letter) was to show Nova Scotians that the premier is concerned and is doing something,” said Larry Hughes, a Dalhousie University professor who studies this province’s energy issues.

That is to say that the letter touting a “Nova Scotian-Born Approach” to hitting carbon reduction targets over the federal backstop of pricing carbon to consumers may have been addressed to voters as much as it was to Minister Guilbeault.

Houston’s Tory government was elected on a platform that included strong promises on the environment including:

Eighty per cent renewable electricity generation by 2030, protect 20 per cent of land and water by 2030, have 30 per cent of cars sold be zero-emission by 2030, new provincial government buildings required to be net-zero and to enshrine these goals in legislation.

Within months of being elected the Tories passed Bill 57, the Environmental Goals and Climate Change Reduction Act, enshrining the above mentioned commitments.

A year into power, Houston is facing the inevitable conflict between environmental promises and the voters’ pocketbook.

Nova Scotians are struggling with inflation and gas prices already at historic highs and a federal carbon tax scheduled to take effect in the new year that will add to both.

The tax is based on the polluter pays principle and aims to raise the price of producing carbon dioxide emissions to consumers in an effort to promote better behavior.

Currently, the price is set at $50 per tonne of carbon dioxide.

It will grow steadily to reach $170 per tonne in 2030.

According to the province’s modelling, quoted by Houston in his letter to Guilbeault, by 2025 the tax would cost the average Nova Scotian household $2,036 annually ($658 of which is directly through the increased cost for fuel and $1,378 indirectly by it making everything else more expensive).

The flipside of the revenue neutral carbon tax are rebate checks sent to middle and lower income people.

 “In provinces where the federal system applies, eight out of ten Canadians get more money back than they paid,” reads a written response to Saltwire questions from Environment and Climate Change spokesman Samuel Lafontaine.

“Should the federal system apply in the province, Nova Scotians should know that this will mean they will get quarterly checks totalling hundreds of dollars per year. The federal system also adds an extra 10% in money back for rural Canadians and special provisions for farmers.”

The exact amount is determined based upon each person’s tax returns and a rough estimate of how much someone in a particular area spends on heat and fuel. This year the average New Brunswick household, which has a modified version of the tax, will receive $583.

“This payment is in the form of a reimbursement, which is not helpful for many Nova Scotians who cannot afford to pay up-front costs, such as to fuel their car to attend work or school,” contends Houston in his letter.

“It is our understanding that only a portion of the direct costs associated with a carbon tax are reimbursed, while indirect costs are not. The most significant impact of a carbon tax is indirect which is why we believe that there will be a large cost to households.”

The “indirect costs” are when everything else gets more expensive because those businesses have to recoup the added cost to fuel their vehicles, heat their buisinesses etc.

In order to avoid having the carbon levy imposed, a province needs to have an alternative system to price carbon that will meet or exceed the federal backstop.

Former Premier Stephen MacNeil managed this with a cap and trade system on large polluters, but this system couldn’t keep up with the steadily increasing price the federal plan requires to be placed on carbon because the Nova Scotia large-emitter market is too small.

In his 13 page letter Houston doesn’t pitch a carbon pricing scheme directed at the transportation and housing sectors, as the carbon tax is, but claims Nova Scotia will beat national targets of a 40-45 per cent reduction of greenhouse gases from 2005 levels by 2030 almost entirely by transforming our electrical sector to run on 80 per cent renewals in the same time period.

Houston points to this province having been 36.4 per cent below its 2005 emission levels in 2020 and pledges to be 53 per cent below them by 2030.

“It includes constructing over 600MW of new wind energy (over $1 billion investment), an investment of $1.7 billion in the Maritime Link to access hydroelectricity from Newfoundland and between $30-40 million annually in energy efficiency programs,” writes Houston.

“The majority of our reductions come from our actions on electricity (our 80% renewable target, coal closures and energy efficiency programs). Nova Scotians are paying for these reductions already through their electricity rate.”

Hughes finds fault with Houston’s claims both around Nova Scotia’s past successes reducing carbon emissions and his predictions for the future.

Houston attributes the nation leading greenhouse gas emissions over 2005 levels to “proactive policy development and investments by Nova Scotians in renewable energy and energy efficiency.

But this province saw two and a half pulp and paper mills (Bowater Mersey, Northern Pulp and Paper Machine 1 in Port Hawkesbury), an oil refinery, a coal mine and offshore natural gas production shutdown over the same period.

A look at the province’s own graphs of the sources of the emission reductions show the vast majority came from the declining industrial sector.

Meanwhile our population and GDP growth have all lagged far behind national averages.

Houston’s modelling shows five of Nova Scotia’s eight coal power plants (which this year are predicted to produce over 40 per cent of our electricity) being replaced by 350 megawatts of new wind generation, increased electrical flow from the maritime link and some solar.

The remaining three coal plants would be replaced by “firm capacity” in the form of the “Atlantic Loop (a proposal to connect Atlantic Canada’s Power grid to Quebec), off-shore wind that powers the production hydrogen, new gas turbines, more Smart Demand Response and Green Button systems as well as longer-duration Batteries and Storage.”

Hughes notes that many of these latter technologies are fairly unproven and the Atlantic Loop has yet to receive the required federal backing. After a meeting of the Atlantic Premiers this summer in Pictou, they jointly held a press conference warning that federal emission reductions targets for 2030 couldn’t be met without the access to consistent hydro-power a tie-in to Quebec’s electrical grid would allow.

To make the tie-in financially feasible – i.e. not entirely born by ratepayers – the premiers are asking that Ottawa chip in on the estimated $5 billion project.

New Brunswick Premier Blaine Higgs went as far as to warn after the June meeting that even if funding were announced immediately, the Atlantic Loop couldn’t be designed, permitted, built and commissioned in time to meet 2030 emission reduction targets.

The federal funding commitment still hasn’t come and isn’t visible on the horizon.

In a written response to Saltwire, Privy Council office spokesperson Stephane Shank said the federal government is working with New Brunswick, Quebec and Nova Scotia on engineering studies for the Atlantic Loop and that the Canada Infrastructure Bank is “participating in discussions and working with partners to explore financing options.”

In 2019 Ontario, Manitoba and Saskatchewan challenged the carbon tax as an unconstitutional imposition of the federal government in the Supreme Court of Canada and lost.

Their residents have been paying the tax since it began at $20 a tonne in 2019.

Its incremental nature have meant next year’s raise in carbon price (to $65 a tonne) will come as less of a shock than it will in Nova Scotia where consumers haven’t been paying the tax.

The federal legislation does allow provinces to come up with their own carbon pricing schemes and avoid the federal scheme, so long as they put the same amount of a price on carbon emissions.

Considering Prime Minister Justin Trudeau’s government was willing to push against the political headwinds against enacting carbon pricing, then fight provinces in court to defend it, Hughes believes Nova Scotia isn’t about to get a pass.

“It is undoubtedly unpalatable to be responsible for an increase in the cost of energy; however, the federal carbon pricing system has been reworked so that it reduces the impact to those on low-income by issuing quarterly rebates and encourages behavioural change in those who can afford to make the changes,” said Hughes.

“The province should look carefully at the federal carbon pricing system, note its faults, and develop a made-in-Nova-Scotia program using evidence-based data.  Ideally, the province can develop a carbon pricing system that meets both Nova Scotia’s and the federal government’s commitments to reducing greenhouse gas emissions.”

Whether voters remember the Premier’s letter next year when the price of gas jumps, remains to be seen.

A spokesperson for Guilbeault’s office assured Saltwire that the Minister is “reviewing it thoroughly.”

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