Page 4 - NorthAmOil Week 13 2021

NorthAmOil COMMENTARY NorthAmOil

Canada’s Supreme Court

upholds federal carbon tax

The Supreme Court of Canada has ruled that the federal government

can impose a country-wide carbon tax despite legal challenges from

three provinces

CANADA THE Supreme Court of Canada ruled last among other measures. The tax was CAD30
week that the federal government can impose ($24) per tonne at the time, and goes up to
WHAT: a country-wide carbon tax. The ruling came CAD40 ($32) per tonne on April 1 this year. By
Canada’s Supreme Court after Alberta, Saskatchewan and Ontario had 2030, it is set to increase to CAD170 ($135) per
has upheld the federal mounted a legal challenge against the carbon tax, tonne.
carbon tax despite legal arguing that it infringed on their jurisdiction. The tax hike is expected to result in increased
challenges from three However, the court ruled that climate change costs for consumers of gasoline, though Ottawa
provinces. “causes harm beyond provincial boundaries and has said it will compensate for this by offering
that it is a matter of national concern”. most of the money collected via the carbon tax
WHY: The 6-3 decision marks a victory for Canadian back to households through rebates. It is also
The court ruled that Prime Minister Justin Trudeau and his Liberal expected to encourage major emitters – such as
climate change causes Party, which made climate change a key issue in the oil and gas industry – to put more effort into
harm beyond provincial its 2019 re-election bid. Having narrowly been reducing their emissions.
boundaries and is re-elected, Trudeau then unveiled a long-term
therefore a matter of net zero greenhouse gas (GHG) emissions goal Acceleration
national concern. for the country in December 2020, setting a Trudeau is keen to accelerate Canada’s decar-
deadline of 2050 for achieving this target. bonisation efforts after the country failed to
WHAT NEXT: A federal carbon tax is seen as an important meet all of its previous environmental targets.
The carbon tax is one of tool in helping to achieve long-term emissions It missed its 2012 emissions target under the
the tools that Canada reduction goals. Indeed, the court said there was Kyoto accord by more than 100mn tonnes and
is expected to use as it “broad consensus among expert international was projected to be on course to miss its target
pursues its long-term bodies that carbon pricing is a critical measure for 2020 by around 99.2% – though this esti-
emissions reduction plan. for the reduction of [GHG] emissions”. mate came before the coronavirus (COVID-19)
When it set its net-zero goal in December, the pandemic’s impact on emissions-generating
Canadian government also said it would achieve activity.
this target by gradually hiking the carbon tax, Nonetheless, without accounting for the

The ruling represents
a victory for Canadian
Prime Minister Justin
Trudeau and his Liberal
Party.

P4 www. NEWSBASE .com Week 13 01•April•2021