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New climate policies in Atlantic Canada fuels political battle

There is a clash of wills growing in Atlantic Canada over two new climate policies that take effect this weekend, with premiers demanding Ottawa put the brakes on the plan and the federal government accusing them of playing politics with the planet.

“Climate change won’t wait,” Environment Minister Steven Guilbeault said in an interview.

New regulations that come into force everywhere in Canada on Jul. 1 will require gasoline and diesel refineries and importers to start cutting down the amount of greenhouse-gas emissions that come from their products.

The situation is particularly heated on Canada’s East Coast, because on the same day, the four Atlantic provinces will move from their own provincial carbon-pricing systems to the national carbon levy.

That is creating a double cost whammy for consumers at the gas pump, particularly in Nova Scotia where the outgoing provincial cap-and-trade system wasn’t adding to gas prices anywhere near the amount required by the federal system.

Gas prices in that province will go up about 20 cents a litre as the carbon price adds about 14 cents July 1, and the provincial energy board approved another increase of 3.74 cents on July 7 for the clean fuel regulations.

However, families in those provinces will start to receive the federal carbon price rebate in July, a quarterly payment designed to make up for the cost of the carbon price.

Every three months, a family of four will receive $184 in New Brunswick, $240 in Prince Edward Island, $248 in Nova Scotia and $328 in Newfoundland and Labrador. Rural residents get another 10 per cent.

New Brunswick prices will go up about three cents for the carbon price, but another eight cents a week later for the regulations. New Brunswick passed a law last year to allow the cost of the regulations to be passed on to consumers.

Federal officials say those increases are not in line with the initial costs, which are very low because most companies are already doing what’s needed to comply in the first few years. Their analysis forecasts the costs could range from about six to 13 cents per litre of gasoline in 2030, when the full regulations are in place.

Guilbeault said there was no need for this increase right now. He also argued to the New Brunswick Energy and Utilities Board in late May that refineries had seen a big increase in profits in recent years, and can afford to absorb some of the costs.

The federal government also says the variation between Nova Scotia and New Brunswick when it comes to the price increase they’re attributing to the regulations is proof the number is not based on the actual costs.

But the four Atlantic premiers are accusing the federal government of ignoring the fact the regulations and the carbon price will hurt their people the most. Refineries in those provinces have fewer options to comply with the regulations, which could make doing so more expensive.

The carbon price will also apply to home heating oil, which almost one-third of Atlantic homes still use. The price is higher on heating oil than natural gas, which is more commonly used in other provinces.

Newfoundland and Labrador, which had been the only province exempt from regulations requiring gas to be blended with biofuels, is threatening to go to the courts.

“We’ve talked about, within the Department of Justice and within government, on the possibilities of constitutional challenge here, based on this,” the province’s Energy Minister Andrew Parsons said on Jun. 28.