Bowing to concerns about worldwide competitiveness, the Trudeau government is scaling back carbon pricing guidelines for some of the country's heaviest energy users, and signalling that more easing could come before the plan takes effect in 2019.
Somewhat surprisingly, given Saskatchewan's long-standing opposition to any form of carbon taxation, the document says the province, "Would have no constitutional objection if the federal government adopted a national carbon tax that applied uniformly all across the country". "This is what we've been saying for the last two years".
Saskatchewan's government filed its latest court challenge against the federal carbon tax on Monday, before reports of the carbon tax scale back first surfaced.
"This climb-down by the federal government is a signal that we have been right all along", Ontario Environment Minister Rod Phillips said during Question Period on Wednesday.
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Environment Canada also now has to consult on the proposed plan with more than a dozen industrial sectors specific to Ontario that weren't originally expected to be affected by the federal carbon pricing program because Ontario had its own system - now scrapped by Doug Ford's new provincial government. While Mr. Ford has said he is committed to reducing greenhouse gas emissions, the Premier and his environment minister have ruled out any use of taxes to do so. Mr. Ford has said that ending cap-and-trade will reduce electrical bills and gasoline prices. She said any plan has to be done looking at the environment and the economy together.
In May Cement Association of Canada vice-president, Adam Auer, urged a senate committee on the carbon tax framework "to be attuned to the reality that our competitors in import and export markets don't have similar pricing systems".
Conservative Finance Critic Pierre Poilievre hailed the government move as a victory in his party's anti-carbon tax campaign, arguing this is an admission from the Trudeau Liberals that carbon pricing makes Canada less competitive.
With the case possibly headed from there to the Supreme Court, Moe said it was unlikely there would be a decision ahead of the January implementation date for the carbon tax.
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Those companies that emit more than their competitors will pay the carbon tax but can deduct either 80 or 90 per cent of their carbon tax burden. He says taxing 10 or 20 per cent of carbon emissions will likely lower emissions at the same rate while lowering the costs for businesses.
Industry response on Wednesday to Ottawa's move was muted.
The oil and gas business was not included on the special treatment list. Even with the change, Saskatchewan's stance remains the same.
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