Canada ready to impose pollution caps, fuel tax on provinces

Thu May 18, 2017 5:12pm EDT
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By David Ljunggren

OTTAWA (Reuters) - Canada said on Thursday it planned to impose a cap on pollution in provinces that refuse to adopt a national price on carbon, setting up a potential fight with the country's powerful energy-rich west.

Last December the Liberal government of Prime Minister Justin Trudeau reached a deal with eight of the 10 provinces to introduce a carbon price as part of a push to curb emissions of greenhouse gases.

Trudeau said at the time he would impose carbon pricing on holdout provinces.

The federal environment ministry on Thursday proposed a levy on fossil fuels that would increase annually and also said it wanted to set limits on pollution. The more a facility exceeded its target, the more it would pay.

"Making polluters pay is a critical part of any climate plan," Environment Minister Catherine McKenna told reporters, saying every penny raised would be returned to the provinces.

Canada has the world's third-largest proven crude reserves, much of which lies in Alberta and Saskatchewan in the west.

Saskatchewan premier Brad Wall says a national carbon price would boost firms' costs at a time when U.S. President Donald Trump wants to cut corporate taxes. Wall is threatening a lawsuit against the federal government.

The central province of Manitoba has not yet decided what it plans to do.   Continued...

Canada's Environment Minister Catherine McKenna speaks to journalists on Parliament Hill in Ottawa, Ontario, Canada May 18, 2017. REUTERS/Chris Wattie