The Director of the Johnson Shoyama Graduate School of Public Policy in Saskatoon says it’s still not clear who will get the money from carbon pricing.
Prime Minister Justin Trudeau announced a federal carbon levy of 10-dollars-a-tonne by 2018, increasing to 50-dollars-a-tonne by 2022, unless a province opted for a carbon tax or cap-and-trade plan.
Director Jeremy Rayner explains a carbon tax calculates how much carbon is emitted from a source and puts on the tax.
For example, the 10-dollar-a-tonne tax would lead to gas prices climbing by just over 2-cents a litre, while the 50-dollar-a-tonne tax results in an 11-cent rise at the pumps.
Rayner says in a cap-and-trade system, the government would establish a pre-determined carbon emission cap.
If a business or individual goes under the cap, they would be rewarded with a credit. Those who go over could be fined or have to pay for credits to offset the amount that they went over the cap.
Rayner says a carbon tax isn’t focused on getting money from people’s pockets. Instead, the goal of a carbon tax is to shift the public behaviour towards more energy-efficient methods, such as buying an energy efficient vehicle or taking public transit.
Therefore, he says the most affected by carbon tax are individuals and companies who are unable to change their behaviour.
Rayner says the carbon tax will be a major concern for Saskatchewan exporters because it creates a skewed playing field if the company is competing against a company in another country that doesn’t impose a carbon tax.
Premier Brad Wall has been very vocal in his opposition to a carbon tax right now, but Rayner says it is important for Saskatchewan to compromise on carbon taxes rather than fight, and work towards figuring out where the money raised from carbon taxes can be invested, such as a stronger investment in carbon capture.