NB now in queue for federal carbon tax rebates as Higgs scraps provincial price
New Brunswickers join Canada’s Carbon Tax Refund Club.
Province residents will begin receiving federal rebate checks later this year after the federal government’s carbon pricing system goes into effect on July 1.
Premier Blaine Higgs announced Thursday that he would scrap his own provincial-set price on carbon effective Canada Day, triggering the implementation of Ottawa’s so-called backstop plan.
That means quarterly federal rebate checks add up to more than $900 a year for a family of four, Higgs said.
“What this is doing right now is relief,” Higgs said. “I would prefer not to see a CO2 tax at all. … But I have no choice.
“In light of this, how can we give relief to people who want it in their homes now, at a time when inflation is higher than they’ve experienced, perhaps in their lives?” That will do that.”
Ottawa’s climate plan requires provinces to introduce a carbon price that meets national standards.
Provinces that refuse are subject to the federal government’s pricing system.
The price per liter of regular petrol is 11 cents this year and will rise to 14.3 cents on April 1st.
Higgs reluctantly adhered to the federal standard
But with the gear shift in New Brunswick, the 11-cent provincial rate will remain in place until July 1, when the higher federal rate goes into effect, the prime minister said.
It’s not clear when the first rebate checks for New Brunswickers will arrive.
Nova Scotia, Prince Edward Island and Newfoundland and Labrador will also be subject to the federal backstop from July 1 for refusing to align their provincial carbon pricing to the stricter federal standards now in place.
Ottawa said last fall the first checks for those provinces would be mailed in July.
Higgs reluctantly introduced a provincial pricing system that matched federal standards in 2020 after a federal election in which the Trudeau Liberals won a second term with six out of 10 provincial seats.
Rather than reimburse the province’s carbon revenues directly to consumers, Higgs lowered the province’s gas tax and reduced personal income taxes during the three years that his system was in place.
Those tax cuts will not be reversed, although the province is forgoing the revenue they enabled, the prime minister said.
He has used the remaining revenue from the CO2 tax to finance climate projects.
These included mitigation projects such as raising roads and strengthening shorelines against erosion from more frequent extreme weather conditions. The money was also used to finance a subsidy program for heat pumps.
Higgs says the end of the provincial carbon tax will have “impacts” on these programs.
“We will continue to have to deal with a climate fund. It may not be as resilient as it would have been,” he said, although adding that his government remains committed to climate action.
comparison with public opinion
Higgs said his decision stemmed from a perception that New Brunswickers “have this perception of having cash on hand. … Our neighbors all around us are doing this now because they have accepted the backstop.”
Federal Environment Secretary Steven Guilbeault tweeted earlier this year that eight out of 10 people receiving carbon tax refunds in backstop provinces “are getting more than they paid for, and those on low incomes will benefit the most.”
Guilbeault told CBC News on Thursday that he was “very pleased” with Higgs’ announcement.
“I agree with him that the federal system is a very good system and will allow the people of New Brunswick to be assisted in the transition from fossil fuels to cleaner energy sources.”
Heather Millar, a political scientist at the University of New Brunswick who studies climate and energy policy, said Higgs’ move is consistent with where public opinion seems to be.
“The return of funds directly to individuals through the carbon tax appears to have a positive impact on people’s perceptions,” she said.
She believes Higgs would likely do the same if the other Atlantic provinces opted not to change their provincial carbon pricing to meet federal requirements.
She also said that the prime ministers may be making a political calculation that the federal Conservatives, who have promised to overturn the federal price system, will win the next election.
“There still seems to be an element of wait-and-see across the country as to how far carbon pricing in the country is a federal decision should the party in power change.”
Last year, when gasoline was $1.70 a liter, Southwest Conservative New Brunswick Assemblyman John Williamson urged Higgs to repeal the provincial tax and accept the federal backstop.
“Right now, it’s the working Canadians on modest and low incomes who need help the most and this will provide help immediately,” he said at the time.
Williamson issued a statement Thursday saying Higgs had tried to work “in good faith” with the Trudeau government in Ottawa but the cost to New Brunswick families was too high.
“This is a major political issue for Trudeau Liberals as more provinces force the federal government to go it alone on the carbon tax,” he said.
In a statement, Miramichi-Grand Lake Conservative MP Jake Stewart said the Trudeau administration “forced” its tax on Higgs and promised a Conservative government led by Pierre Poilievre would repeal it.
“Justin Trudeau pushed through his Ottawa-knows-best approach and left no room for negotiation,” said Stewart, who was a minister in Higgs’ cabinet when the provincial tax was passed.
Stewart’s statement on behalf of the Conservative opposition in Ottawa made no reference to the federal rebate or Higgs’ 2020 decision not to offer one.
New Brunswick becomes the eighth province to be subject to the federal backstop. British Columbia and Quebec will be the only two to have their own provincial pricing systems.
The separate carbon pricing system designed by the province for large industry will remain in place, Higgs said.