Boost Climate Rebates with a Carbon Tariff

October 23rd, 2018

Today, Prime Minister Trudeau announced that his government will rebate federal carbon tax revenues directly to residents of each affected province, providing $609 next year to a Saskatchewan family of four. These revenues and rebates are limited by the federal government’s previous decision to exempt most of the carbon from large industrial emitters.

Regina–Lewvan MP Erin Weir proposes to increase the climate rebates and protect Canadian jobs by extending the federal carbon levy to the carbon content of imports from countries that do not price emissions.

“The federal government is right to safeguard carbon-intensive, trade-exposed industries that must compete against the US and other countries where emissions are free,” said Weir. “But that goal should be achieved not only by exempting Canadian-made exports, but also by extending the federal carbon price to the carbon content of imports from countries that do not yet levy carbon prices – much as the GST is already refunded on exports and applied to imports.”

Even making the cautious assumption that production processes abroad are the same as in Canada, Statistics Canada estimates that the carbon content of our imports exceeds 200 megatonnes. A carbon tariff of $20 per ton next year would collect $4 billion, which could fund a rebate of $110 for each Canadian over and above what the government announced today. A carbon tariff of $50 per ton in 2022 would collect $10 billion, which could fund an additional rebate of $270 per capita.

“In reality, production is much more carbon-intensive in China and other offshore manufacturers. Developing the capacity to properly assess the carbon content of imports would boost carbon tariff revenues, funding even larger rebates to Canadians and providing an environmentally appropriate incentive to use cleaner, Canadian-made products rather than overseas imports,” noted Weir. “Enacting a carbon tariff would help to reduce emissions, increase rebates and create jobs in Canada.”