Nova Scotia

N.S. unveils how cap-and-trade system will affect cost of gas, electricity

Ottawa has approved the Nova Scotia government's cap-and-trade system as a viable alternative to the federal government's plan to impose a carbon tax on the provinces.

Premier says it's the best deal for Nova Scotians but NDP not so sure

The federal Liberal government will slap a carbon tax on fuels in provinces and territories with no adequate emissions pricing plans of their own. But how will it work? The National explains. 1:31

Nova Scotians will pay slightly more for gasoline, electricity, natural gas and heating oil over the next four years as a result of the province's new cap-and-trade system. 

But the provincial government maintained Tuesday those small hikes are just a fraction of the increases that would have resulted if Ottawa had imposed a carbon price on the province.

"We believe this plan is the best possible plan that could be achieved for Nova Scotians," Premier Stephen McNeil told reporters.

The Trudeau government approved Nova Scotia's cap-and-trade system and as a result won't be imposing a carbon-tax plan on the province the way it plans to on Ontario, New Brunswick, Saskatchewan and Manitoba — provinces that don't have their own climate pricing plans that satisfy federal standards.

Avoiding a big jump at the pumps

The Nova Scotia government expects consumers to pay about a penny more a litre for gasoline and heating oil and about the same amount per cubic metre of natural gas. 

The increase per kilowatt hour for electricity is 0.19 of a cent. That's a potential increase of about one percent on Nova Scotia Power bills starting next year. 

Under the federal plan, according to the province, Nova Scotians would have faced steeper estimated increases between now and 2022, particularly for heating oil at 13.6 cents more a litre and gasoline at 11.6 cents more a litre.

Natural gas would've jumped to an estimated 9.7 cents per cubic metre while electricity would have cost consumers around 1.27 cents more per kilowatt hour, the province said.

"Nova Scotians should not be going to the pump and paying an 11-cent increase, hoping to receive that money back," said McNeil. "We believe that money is better kept in the pockets of Nova Scotians."

Rebates to other provinces

But the federal government has promised rebates to those who live in provinces covered by its plan to offset any price increase as a result of carbon pricing. Those cheques will not be going out to provinces with their own systems, including Nova Scotia.

NDP Leader Gary Burrill says he's not convinced Nova Scotia's cap-and-trade plan is the best for residents. (CBC/Craig Paisley)

The province's NDP leader, Gary Burrill, told reporters Nova Scotia's position was "misleading." The federal rebate program would leave the majority of people with more money in their pockets than the provincial plan, he said.

Nova Scotia is imposing a cap on the amount of carbon emissions that can be generated. Companies that pollute more will have to purchase credits from industries with lower emissions in order to pay for exceeding their targets.

About two dozen of the province's largest polluters are, by law, expected to report on how much they emit and come up with ways to reduce those emissions over time.

Cap and trade

Last spring, the Nova Scotia government announced Western Climate Initiative Inc., or WCI, would run the emission trading system on behalf of the province, costing taxpayers $400,000 this year and roughly $300,000 every year after that.

The non-profit corporation is currently administering the carbon credit trading programs of Quebec, Ontario and Manitoba. California is also part of the system.

On its website, WCI says it was created in 2011 to "provide administrative and technical services to support the implementation of state and provincial greenhouse gas emissions trading programs."

Unlike other jurisdictions, the credits generated in Nova Scotia can only be traded within the province. Most of those credits will be offered initially free of charge by the province.

Nova Scotia Power will get about 90 per cent of its credits for free and fuel suppliers will get about 80 per cent of their credits for free, according to the province. 

Nova Scotians weigh in

Though it's early days, the province's cap-and-trade program has already received mixed reaction from the public.

Some say it's a small price to pay to fight climate change while others worry about the impact on low-income families.

"It would be great if we didn't have to pay the extra, but any new program comes with a cost," said Charlynn Cox, who lives in North Sydney with her family.

"We still need to drive, we still need to take the kids to places, we still need to heat the house. We'll figure it out."

Murray Hannem estimates the province's plan will cost an extra few hundred dollars a year. (CBC/Holly Conners)

Murray Hannem of St. Ann's Bay said he won't be changing his driving habits though he estimated the province's plan will likely cost him a few hundred dollars per year.

"I spend 50,000 kilometres a year travelling back and forth to work in Sydney. So I'm prepared to absorb that cost," he said. "We've got to do something about global warming, and it's a good start."

Louise Smith-MacDonald, a co-ordinator with the Every Woman's Centre in Sydney, said the cost of living is already a burden for some families. She said there needs to be support for people who can't afford even a small increase.

"The people I work with now are struggling to get heat. There are families who are buying jerrycans of furnace oil in order to keep their furnace going," she said.

"It's really just putting a higher price on the necessities of life, which is really, really cruel and difficult."

About the Author

Jean Laroche

Reporter

Jean Laroche has been a CBC reporter for 32 years. He's been covering Nova Scotia politics since 1995 and has been at Province House longer than any sitting member.

With files from Holly Conners