Federal Carbon Policy Lacks Border Adjustments to Safeguard Canadian Jobs

May 18th,  2017

The carbon tax announced today for Saskatchewan by the federal government fails to use federal jurisdiction over international trade to ensure a level playing field between industry here and abroad.

“Ottawa has set out the carbon price it would apply in Saskatchewan, although it would prefer the province to do so itself,” observed Regina–Lewvan MP Erin Weir. “But the Liberal government is not acting within its own jurisdiction to extend that levy to the carbon content of imports from countries that do not price carbon and rebate this cost on Canadian exports.”  

Instead, the federal government’s discussion paper proposes output-based allocations for carbon-intensive, trade-exposed facilities. Weir is releasing a discussion paper comparing this approach to federal border adjustments. It outlines several advantages of border adjustments: they could be applied comprehensively, increase federal revenues rather than reducing provincial revenues, and comply with international trade agreements.

Federal NDP leadership candidate Peter Julian has endorsed this approach to ensure that carbon pricing applies consistently across the Canadian market, wherever the seller is located.

“Premier Brad Wall’s main objection to carbon pricing has been that it could eliminate jobs by encouraging industry to move to countries without carbon pricing,” noted Weir. “By omitting border adjustments, the federal government missed a chance to address this concern and ensure that carbon pricing in Canada reduces global emissions, rather than providing an incentive for industry to relocate.”

MP Weir’s discussion paper is available in English and French.