Politics

Conservatives announce plan to replace Liberal carbon tax with a lower levy of their own

After years of criticizing the Liberal carbon tax, the Conservative party is proposing a climate plan that also puts a price on carbon for consumers, according to a copy of the party's climate change plan obtained by CBC News.

Proposal would see levy from fuel purchases go into personal savings accounts

Leader of the Opposition Erin O'Toole speaks during a policy announcement in Ottawa on April 15, 2021. (Adrian Wyld/The Canadian Press)

Conservative Party leader Erin O'Toole unveiled a climate plan today which will put a price on carbon for consumers.

But instead of the Liberal carbon-tax-and-rebate system, O'Toole is proposing to charge a levy on fuel purchases and use the money to fund personalized savings accounts which Canadians can use for environmentally friendly purchases.

Under O'Toole's plan — which CBC News obtained a copy of Wednesday — Canadians would pay a carbon levy, initially amounting to $20 per tonne of greenhouse gas emissions, every time they buy hydrocarbon-based fuels, such as gasoline.

But instead of channeling that money into direct rebates to Canadian households, as is the case currently, the Conservatives would divert it to "personal low carbon savings accounts."

Consumers could then draw on those accounts for "things that help them live a greener life," the document says. "That could mean buying a transit pass or a bicycle, or saving up and putting the money towards a new efficient furnace, energy efficient windows or even an electric vehicle."

At today's press conference announcing the new plan, O'Toole compared it favourably to the current system.

WATCH: Conservative climate plan includes lower carbon levy:

Conservative climate plan includes price on carbon

The National

30 days ago
2:03
Conservative Party Leader Erin O'Toole unveiled his party's climate plan, which includes a price on carbon. Though he says it’s not a tax, his critics say otherwise. 2:03

"We recognize that the most efficient way to reduce our emissions is to use pricing mechanisms," he said.

"However, having a market-based approach means that we cannot ignore the fact that our largest and most integrated trading partner — the United States — does not yet have a national carbon pricing system.

"And the present state of global trade allows some of the world's worst polluters to become free riders to the detriment of Canadian workers. Any serious plan must recognize these realities."

Under O'Toole's plan, Canadians would pay a carbon tax, initially amounting to $20 per tonne of greenhouse gas emissions, every time they buy hydrocarbon fuels, such as gasoline. (Michelle Siu/The Canadian Press)

The Conservative Party's carbon price would increase over time to a maximum of $50 per tonne. But it would go no higher than that, according to the plan.

O'Toole declined to call his proposal a "tax," instead referring to it as a "pricing mechanism."

"Not a cent goes to Ottawa," O'Toole said.

O'Toole added that he believes Conservative voters who are opposed to carbon pricing will see the benefits of his plan. He also said that he would work closely with the provinces on implementing the plan.

Private sector consortium to manage accounts

The current Liberal policy — which applies only in provinces that have not set up their own carbon pricing — is now set at $40 per tonne, rising each year until it reaches $170 per tonne by 2030.

Under the Liberal policy, which was passed into law in 2018, 90 per cent of the revenue is returned to consumers in those provinces via rebates. The remaining 10 per cent is directed toward businesses, schools, hospitals and municipalities.

The Conservative proposal says the personalized accounts could be managed by a private sector consortium in a manner similar to Interac, Canada's debit card system.

The proposal states that a personalized savings account is preferable to the government controlling the money because Canadians can't be sure the prime minister "won't be tempted to use the carbon tax revenue to fund his big government plans."

Tories say their plan meets emissions reductions target

The plan also specifies that Conservatives are prepared to maintain the current output-based pricing system on larger industrial emitters that the Liberal government has put in place, though they will assess what Canada's trading partners are prepared to do.

Currently, large emitters are charged a levy at the same rate as the consumer fuel charge. To provide an incentive to reduce emissions while also addressing competitiveness concerns, companies are then given a subsidy tied to the average emissions intensity across their sector.

The rest of the Conservatives' 15-page plan document covers a number of other promises, including a zero-emissions vehicle mandate, investments in technology and a promise to develop a "national clean energy strategy."

WATCH: Conservative environment critic defends party's new climate plan

'This is an approach that will work': Conservative Environment Critic

Power and Politics

1 month ago
3:45
Conservative Environment Critic Dan Albas joined Power & Politics Thursday to discuss the Conservative climate plan that includes a carbon tax on consumers. 3:45

At today's announcement, O'Toole pointed to a proposal to charge a tariff on products from countries with lower emissions and environmental standards than Canada — singling out China in particular.

O'Toole refered to it as a "carbon border adjustment tariff" on "bad actor countries."

He said the measure would protect Canadian jobs.

"I think most Canadians don't want to see Canadian jobs being shifted to China, where they don't respect the climate change commitments democratic countries are meeting " he said. "So I think Canadians know that that tariff will price out some of these bad actor country products in a way that other countries are looking at as well."

The Conservatives also say their plan has been independently analyzed to ensure it meets Canada's emissions reductions target for 2030, though no details of that analysis are included in the copy of the plan obtained by the CBC.

Environment minister responds

Jonathan Wilkinson, the minister of environment and climate change, criticized the plan at a news conference today. He was joined by Minister of Canadian Heritage Steven Guilbeault.

Wilkinson called the plan unserious, repeatedly referring to it as a carbon tax and comparing it to "Petro-Points," a redeemable points loyalty program from the oil and gas company PetroCanada. 

"If you think about, you now have to create these separate accounts for every Canadian, you have to track their use of gasoline and natural gas and propane … and find a way to flow back into these accounts the money that is associated with a price on pollution that will be different in different jurisdictions," Wilkinson said, calling the proposal "incredibly complicated."

WATCH: Environment minister responds to Conservative party's climate plan

Environment minister responds to Conservative Party's climate plan

Politics News

1 month ago
0:45
Jonanthan Wilkinson reacts to Conservative Leader Erin O'Toole's climate plan announcement. 0:45

He also said the $50 per tonne cap isn't high enough to make a difference.

"It's capped at $50 …  And you can talk to any economist, if you really want carbon pricing to be effective at reducing pollution, it needs to go beyond $50," he said. "This is just not serious."

Laurel Collins, the New Democratic Party environment and climate change critic, attacked both the Liberal and Conservative policies in a media statement.

"What the Conservatives announced today is no plan at all — it's even weaker than Liberal commitments when it comes to reducing emissions and does even less to reimburse families for the costs of carbon," she said.

"Instead of trusting families to make choices that work for them, the Conservatives want to sign you up for a savings account you can't even use as you need on emergencies or on essentials."

Corrections

  • This story had been updated from an earlier version which stated the Liberal's' carbon tax is $30 per tonne and will rise by $10 every year until 2070. In fact, the price went up to $40 per tonne April 1and it will rise $15 per tonne after 2022.
    Apr 15, 2021 9:08 AM ET

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