PC's Blaine Higgs 'no carbon price' promise may work against him

New Brunswick's Opposition Progressive Conservative leader may find himself caught in a carbon-price trap as he prepares for the next provincial election in 2018.

Blaine Higgs is opposed to Premier Brian Gallant's plan to introduce a price on carbon in the coming year.

But the PC leader will have a hard time campaigning on a promise to have no carbon price, or to repeal Gallant's, because Ottawa says New Brunswick must have a regime in place next year.

The federal government says it will impose its own federal carbon price, which it calls a "backstop," on any province that doesn't come up with its own version by 2018.

"The federal government was quite clear," Environment Minister Serge Rousselle said Thursday. "If we do not implement our homemade solution, at the end of the day it will be the federal backstop. So I wonder what he's talking about."

Higgs "would just wash his hands of it and wait for the federal [government] to put in the backstop?" Rousselle said. "That doesn't make sense to me."

Other provinces react

Carbon pricing is designed to raise the cost of producing and consuming fossil fuels as an incentive to use them less, leading to lower emissions.

Saskatchewan Premier Brad Wall has vowed to launch a constitutional challenge to block Ottawa from imposing a carbon price on his province.

But last week, the Manitoba government announced it has a legal opinion that the federal government does have that power. Manitoba Premier Brian Pallister said the province will now draft its own pricing system.

"If we just say no, we get Trudeau," Pallister said. "If we go to court, we lose Our alternatives are pretty clear, I would say wedevelop our made-in-Manitoba plan and we put it out there."

'No grounds' for tax

Higgs did not say clearly whether he would adopt the same logic if he became premier or team up with Saskatchewan to challenge the federal plan.

"I would argue and I would challenge it, vehemently, that if I'm meeting the standards of environmental targets, then there isn't any grounds for the federal government to say 'tax the people more,'" he said. "There'd be be no grounds for that because I'm meeting the goals.

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"That would be my argument and I would take that argument."

His office later said that he meant New Brunswick should seek a better carbon-price deal from Ottawa, such as the one Nova Scotia won.

That province is adopting a cap-and-trade system with some exemptions that letsit keep coal plants open longer in return for deeper carbon dioxide emissions reductions elsewhere.

Two main options

New Brunswick is studying two main options for carbon pricing: a carbon tax or a cap-and-trade system.

There are different cap-and-trade models, but generally they allow emitters that stay under a legislated cap to earn credits. They can then sell those credits to emitters who exceed the cap.

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Higgs wouldn't say if his proposal to impose emissions reductions and fines would amount to a cap-and-trade system that would satisfy Ottawa's requirements.

"There has to be an end game," he said. "You can't just keep paying the penalty An ongoing violation is not acceptable."

'Clear upshot'

Former Conservative MP John Williamson, now the head of an anti-carbon price lobby group, says regardless of the legal question, politically "the clearest upshot for Higgs is outright opposition."

Williamson says a carbon tax would raise gas prices by 11 or 12 cents a litre, and campaigning to get rid of that would be a political winner for the PC leader.

He said if Ottawa then tried to force its own carbon price on New Brunswick, "this becomes very messy very quickly," but Higgs would have the political upper hand in opposing a tax.

Regulate with targets: Higgs

Higgs says there's no evidence that carbon pricing reducesemissions. Some emitters may just pay the higher price and keep emitting, he said.

"We can continue down the road of a cleaner environment and put the regulations in place without causing people to pay more tax," Higgs says. "We are taxed out in this province."

He says stricter rules and deadlines for emissions reductions would suffice.

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"My fight would be, we have an environmental standard, and targets we are achieving, and that should be the goal," he said. "It shouldn't be a case of 'how much can I tax people?' That doesn't by itself cause a cleaner environment.

"Put the regulations, put the timeline in place that there is no option: you can't pay for poor performance. You have a requirement to meet targets."

Rousselle says Higgs is not being realistic.

"He has to realize the backstop is the answer if he does nothing, as he seems to imply," Rousselle said.

"If we do nothing, we end up with the federal solution, and we've always said we'd prefer to come up with a New Brunswick solution."

Liberals will spend carbon revenue

Rousselle again defended the Gallant Liberals' decision to use revenue from a carbon price to pay for environmental programs.

Other jurisdictions, including British Columbia, have used carbon revenue to cut other taxes, including income taxes, so that the consumer is not paying more tax overall.

Rousselle says the best way for New Brunswick to achieve its environmental goals is to spend the money on promoting renewable energy use and adapting to the impacts of climate change.