PCs defend their provincial carbon levy

Ford criticizes Ottawa while Ontario program aimed at industrial emitters set to go up next year

This article was written by Robert Benzie and was published in the Toronto Star on March 26, 2024.

As Premier Doug Ford rails against the “federal carbon tax,” he is quietly collecting more than $146 million annually from his provincial levy on industrial greenhouse gas emitters.

The Progressive Conservative government’s Emissions Performance Standards (EPS) program charges big polluters $65 per tonne of carbon they emit, rising to $80 a tonne on Jan. 1.

All companies who have spewed emissions of more than 50,000 tonnes of carbon annually since 2014 must register with Queen’s Park. Those with lower emissions have the option of enrolling with registered participants exempted from federal fuel charges.

Smelters, refineries, cement makers, grain ethanol producers, generators of hydrogen and other gases and mining companies are covered under the provincial scheme.

Mindful that Prime Minister Justin Trudeau’s carbon levy, which will jump from $65 to $80 next Monday, is so controversial, Ford’s government maintains all of the proceeds of its fee go toward reducing greenhouse gas emissions by helping polluters wean off of fossil fuels.

“The reason we work with industry is so that the money goes back to them to use on technological upgrades, which will help reduce greenhouse gas emissions,” Environment Minister Andrea Khanjin told the Star on Monday.

Khanjin said “the best example we have today is the electric arc furnace by Dofasco” in Hamilton that replaces coal-fed coke ovens and blast furnaces with low-emission electricity.

Subsidizing steel companies in order to get them to tap into the electricity grid instead of using coal is reducing carbon emissions by about three million tonnes annually.

That’s the equivalent of taking about one million gasoline-powered cars off of Ontario roads.

It has also helped the province, which worked closely with Ottawa on the “green steel” incentive program, to attract electric vehicle battery manufacturers, including Volkswagen in St. Thomas and Stellantis in Windsor.

Launched to little fanfare in 2022 — due to Ford’s public antipathy toward carbon pricing — the EPS brought in $146 million in “excess emissions units,” or credits, from 218 industrial polluters in its first year.

Revenue from 2023 has not yet been tallied, but it should be higher since the carbon price went up.

The province insists its program is more effective than Ottawa’s “output-based pricing system” for industrial emissions.

“It’s something we worked on with … polluters. A lot of industry and companies have said that this is something that … they want to see. It’s our version of a backstop,” said Khanjin, a rising star in Ford’s cabinet.

When it was pointed out the EPS undermines the Tories’ argument that carbon levies are bad, the minister stressed “this is a successful program because we actually work with industry.”

“It’s not punitive. It’s actually looking toward the future in the sense of it’s helping people invest in green technology,” she said.

Asked if it is in effect a “carbon tax,” Khanjin countered, “It’s an emission performance standard, so it’s a very different version that we’ve worked with industry on.”

‘‘ This is a successful program because we actually work with industry. It’s not punitive.

The minister said the provincial initiative differs significantly from the federal program, which includes quarterly rebate cheques to Canadians to offset higher fuel prices.

“What it does show is that, when you work with industry on things like an emission performance standard, it helps them reduce greenhouse gas emissions. That’s a good thing,” she said.

“However … when you introduce a carbon tax, which actually … hikes up the price of doing business, that’s not great because a lot of these manufacturers will leave the province,” said Khanjin.

“Luckily for us, we’ve got a lot of manufacturers who are going to stay here because of great programs like that,” she said.

“It doesn’t hurt our middle class. It really goes after the industrial polluters.”

Revelations about the little-publicized program come as Ford’s Tories are spending millions of dollars attacking recently elected Liberal Leader Bonnie Crombie as “the queen of the carbon tax,” even though she has pledged to not have a provincial levy for consumers if she wins the 2026 election.

ANDREA KHANJIN ONTARIO ENVIRONMENT MINISTER

Author: Ray Nakano

Ray is a retired, third generation Japanese Canadian born and raised in Hamilton, Ontario. He resides in Toronto where he worked for the Ontario Government for 28 years. Ray was ordained by Thich Nhat Hanh in 2011 and practises in the Plum Village tradition, supporting sanghas in their mindfulness practice. Ray is very concerned about our climate crisis. He has been actively involved with the ClimateFast group (https://climatefast.ca) for the past 5 years. He works to bring awareness of our climate crisis to others and motivate them to take action. He has created the myclimatechange.home.blog website, for tracking climate-related news articles, reports, and organizations. He has created mobilizecanada.ca to focus on what you can do to address the climate crisis. He is always looking for opportunities to reach out to communities, politicians, and governments to communicate about our climate crisis and what we need to do. He says: “Our world is in dire straits. We have to bend the curve on our heat-trapping pollutants in the next few years if we hope to avoid the most serious impacts of human-caused global warming. Doing nothing is not an option. We must do everything we can to create a livable future for our children, our grandchildren, and all future generations.”