NDP cap-and-trade plan would hike gas prices: Pembina
The NDP's proposal for a cap-and-trade system may not hike gas prices up to 10 cents a litre as being warned by the Conservatives, but consumers would still have to pay extra at the pumps, according to a national think tank on sustainable energy.
Clare Demerse, acting director, climate change, at the Pembina Institute said Conservative Leader Stephen Harper and economist Jack Mintz have been overstating the effect a cap-and-trade system might have on gas prices.
Harper has quoted figures by Mintz who has speculated that the NDP's carbon price of $45 per tonne would translate to a 10 cent gas tax.
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But Demerse said Mintz incorrectly bases his figures on a system that covers the greenhouse gas pollution caused by using gasoline.
She said the NDP plan includes only the emissions from those producing a barrel of oil in Canada, not the emissions from cars.
Under that scenario, energy companies would absorb some of the cost. she said. But there would be some cost to the consumer, she said, estimating it would be around an extra four cents a litre.
"Four cents a litre is less than Stephen Harper's estimate — and well below the fluctuations we see, sometimes daily, in the price of gas — but it's also more than zero," Demerse said. "So it's disappointing to see NDP leader Jack Layton assert that we can have a cap-and-trade system without Canadians facing any increase at all in gasoline prices."
As questions were raised on Thursday about Mintz's calculations, Mintz released a statement standing by his assessment.
He said since the plan would apply to large emitters of carbon, including utilities and refiners, much of the carbon price "would be shifted forward to higher home heating and gasoline prices."
"The current federal excise tax on gasoline of 10 cents is equivalent to a $42 carbon charge," he said. "So, a cap and trade system applying to refiners would have a similar impact since it increases the cost of refined oil."