What to watch for in Thursday's carbon price announcement

New Brunswickers will get more details Thursday on how much more — if anything — they'll pay to fight climate change.

Gallant government to release more details about who will pay to help fight climate change and how much

Earlier this week, the government said there will no no new 'direct' carbon tax on consumers.

New Brunswickers will get more details Thursday on how much more — if anything — they'll pay to fight climate change.

The Liberal government will reveal details of its carbon-pricing plan when it introduces a proposed Climate Change Act in the legislature Thursday morning.

And while Environment Minister Serge Rousselle let some details trickle out earlier this week, the bill should more completely address unanswered questions about what the carbon price means for your wallet and the province's finances.

"The legislation should lay out targets right in the legislation, tell the people and the legislature whatever revenues are raised are going to be spent on, and [include] a plan to implement the climate action that we laid out over a year ago," said Lois Corbett of the New Brunswick Conservation Council.

The carbon-price system New Brunswick will adopt will include two main components: what Rousselle calls a "repurposed" gas tax, and a levy on large industrial emitters.

Gas tax becomes carbon tax

New Brunswickers pay 15.5 cents per litre in provincial gas tax, which is forecast to bring in $286 million this year. Part of that amount will, in effect, be transformed into a carbon tax — allowing the Liberals to avoid a "new" tax ahead of next year's election.

The carbon-tax revenue will fund climate change programs, and Rousselle says he's confident it will also meet the federal government's requirement for carbon pricing.

Those requirements include an escalating tax rate: Ottawa says the provinces must charge the equivalent of $10 on every tonne of carbon in 2018, growing to $50 by 2022.

If New Brunswick is to meet that standard, a larger and larger share of the 15.5-cent-per-litre gas tax will have to transformed into the carbon tax each year.

Rousselle seemed to confirm that in a scrum with reporters Wednesday.

"Your number is good," he told reporters. "I'm thinking about what the amount is after five years … Your amount is right around that when I make the calculation in my mind."

Plan could gobble up surpluses

Environment Minister Serge Rousselle has promised detailed five-year dollar projections for the gas-tax-turned-carbon tax. (CBC)

There used to be a law requiring the provincial gas tax be spent on road projects, but the Liberals repealed that in 2015.

And even then, the government spent far more on road work than what the gas tax brought in.

So redefining the money won't take funding away from road work specifically. But it will mean a larger and larger share of the $286 million will be earmarked for climate programs each year through 2022.

That means less of it will be available for non-climate spending. If spending levels stay the same, that could in turn gobble up the budget surpluses the Liberals are projecting for 2021 and beyond.

Rousselle promised detailed five-year dollar projections for the gas-tax-turned-carbon tax when he releases details of the bill Thursday.

'Minimal' impact on rates: NB Power

Meanwhile, NB Power tried to assure ratepayers that the second part of the carbon price, a new industrial levy on emissions, won't drive up their home energy bills.

The levy will require large industrial emitters of carbon dioxide to be ranked alongside similar plants in the same sector. Those that reduce emissions the most won't have to pay the levy.

NB Power CEO Gaëtan Thomas said with the climate legislation coming. 

"We know what we're going to do now, and we can work at it and have minimal impact on rates."

He said the industrial levy could add one or two per cent to bills over a decade, but it's just as possible the utility will reduce emissions, be exempt from the levy, and avoid passing on the cost to customers.

New hydrogen technology

NB Power is seeking a new fuel source for its coal-fired generating plant in Belledune, whic is one of the province's major sources of carbon emissions.

Thomas announced Wednesday the utility is exploring a new hydrogen power technology to generate power at its Belledune plant, which burns coal at the moment. It's spending $7 million to research hydrogen power, which uses water.

"This new technology could even result in lower rates," he said.

The federal plan requires a coal phase-out by 2030 and Belledune could be converted to burn natural gas, biomass, or hydrogen between now and then, Thomas said.

Green Party Leader David Coon says he's heard of hydrogen fuel cells used to power cars or small buildings, but "it's news to me that it's something that's in any way affordable to power a large power plant."

Thomas said converting Belledune would be expensive, but would allow long-term savings.

"We're talking possibly in the hundreds of millions" for conversion costs, he said. "However, what's cheaper fuel than seawater? There's plenty of it in New Brunswick."

About the Author

Jacques Poitras

Provincial Affairs reporter

Jacques Poitras has been CBC's provincial affairs reporter in New Brunswick since 2000. Raised in Moncton, he also produces the CBC political podcast Spin Reduxit.