The federal government has reluctantly given the green light to Ontario and New Brunswick to use their own carbon-pricing systems for big industrial emitters, rather than use a federal program. The decision was made before the Supreme Court of Canada hearing that will determine if Ottawa has the jurisdiction to set a national standard for carbon pricing and apply federal programs in any provinces that don’t comply.
The carbon price system for big emitters sets two specific requirements: the price, and the source of emissions the price must impact. It does not, however, lay out that any equivalent system must show equivalent emissions reductions to the federal backstop.
The federal government set thresholds for emissions by industry. Each company pays the carbon price only on emissions over that threshold for its specific industry, and that threshold gets more strict over time. Ontario and New Brunswick have designed systems that set that threshold by facility, not by industry, which means in many cases that threshold is higher than it would have been under the federal system. As well, the portion of emissions on which the price is applied is smaller.
Details Courtesy of The Canadian Press.