By Canadian Press

Feds looking to protect carbon price with legislation or compensation

Mar 30, 2022 | 12:53 PM

OTTAWA — Environment Minister Steven Guilbeault says the government wants to “future proof” the carbon price against political decisions to cancel or lower it down the road.

The new emissions reduction plan Guilbeault tabled Tuesday calls the federal carbon pricing system the “cornerstone” of Canada’s climate plan.

But Guilbeault warns that investors are still wary of the risk that a future government might lower the price or eliminate it altogether.

He says the government is in the midst of debating ways to calm those jitters, such as enshrining the price and its annual increase into law, or establishing a program to ensure investors are compensated if the price goes off course.

Carbon pricing encourages investors to put money into projects that cut greenhouse gas emissions by making the alternatives cost more but the incentive changes if the carbon price is not guaranteed.

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Clean Prosperity executive director Michael Bernstein says investors aren’t moving their money to climate action as quickly as needed, adding that legislating confidence in the carbon price is one of the most important things in the new emissions plan.

This report by The Canadian Press was first published March 30, 2022.

The Canadian Press