Laser Talk: The Environmental Commissioner’s Report on Carbon Pricing

Laser Talk: The Environmental Commissioner’s Report on Carbon Pricing

In April, 2022, the federal Environmental Commissioner released a series of reports on the federal government’s efforts to combat climate change. Included in these audits were findings on the current federal and provincial carbon pricing schemes which highlighted the fact that more work still needs to be done to ensure the fairness, effectiveness, and stringency of carbon pricing within Canada.

Three areas within which the commissioner found issues were as follows:

1. In order to avoid carbon leakage (industry leaving Canada for countries with lower carbon pricing), Ottawa approved weak emission standards for ‘trade exposed’ large emitters in the patchwork of provincial carbon pricing systems across the country. The federal audit found that these allowances were likely too lenient, undermining the “polluters pay” principle. 
2. Despite implementing measures to mitigate the burden of the federal backstop on disproportionately impacted groups (such as low‑income households and remote communities), it was found that Indigenous groups and small businesses were still disproportionately affected. 
3. Lack of federal and provincial reporting on benchmark assessments, the measures to support industry, and the modelling of the expected emission reductions means that carbon pricing systems lack the necessary transparency to guide future policy changes.

The Environmental Commissioner specified the need for Environment and Climate Change Canada to work alongside provinces and territories to address all these issues, stating that: “Emission reductions (…) depend strongly on ensuring that the pan-Canadian approach to carbon pricing is implemented effectively (…) Weak or non-existent carbon pricing systems in some provinces or territories could contribute to significant harmful effects on the environment, on human health and safety, and on economic prosperity. Establishing minimum national standards for pricing carbon pollution is of concern for Canada as whole.”

The climate change clock never stops ticking. It is important that we use these audits to keep our government accountable and our policies on the right track to enact meaningful change before time runs out.