Double whammy of new climate policies in Atlantic Canada fuel political battle

OTTAWA — There is a clash of wills growing in Atlantic Canada over two new climate policies that take effect this weekend, with premiers demanding Ottawa put the brakes on the plan and the federal government accusing them of playing politics with the planet.

“Climate change won’t wait,” Environment Minister Steven Guilbeault said in an interview.

New regulations that come into force everywhere in Canada on Saturday will require gasoline and diesel refineries and importers to start cutting down the amount of greenhouse-gas emissions that come from their products.

The situation is particularly heated on Canada’s East Coast, because on the same day, the four Atlantic provinces will move from their own provincial carbon-pricing systems to the national carbon levy.

That is creating a double cost whammy for consumers at the gas pump, particularly in Nova Scotia where the outgoing provincial cap-and-trade system wasn’t adding to gas prices anywhere near the amount required by the federal system.

Gas prices in that province will go up about 20 cents a litre as the carbon price adds about 14 cents July 1, and the provincial energy board approved another increase of 3.74 cents on July 7 for the clean fuel regulations.

However, families in those provinces will start to receive the federal carbon price rebate in July, a quarterly payment designed to make up for the cost of the carbon price.

Every three months, a family of four will receive $184 in New Brunswick, $240 in Prince Edward Island, $248 in Nova Scotia and $328 in Newfoundland and Labrador. Rural residents get another 10 per cent.

New Brunswick prices will go up about three cents for the carbon price, but another eight cents a week later for the regulations. New Brunswick passed a law last year to allow the cost of the regulations to be passed on to consumers.

Federal officials say those increases are not in line with the initial costs, which are very low because most companies are already doing what’s needed to comply in the first few years. Their analysis forecasts the costs could range from about six to 13 cents per litre of gasoline in 2030, when the full regulations are in place.

Guilbeault said there was no need for this increase right now. He also argued to the New Brunswick Energy and Utilities Board in late May that refineries had seen a big increase in profits in recent years, and can afford to absorb some of the costs.

The federal government also says the variation between Nova Scotia and New Brunswick when it comes to the price increase they’re attributing to the regulations is proof the number is not based on the actual costs.

But the four Atlantic premiers are accusing the federal government of ignoring the fact the regulations and the carbon price will hurt their people the most. Refineries in those provinces have fewer options to comply with the regulations, which could make doing so more expensive.

The carbon price will also apply to home heating oil, which almost one-third of Atlantic homes still use. The price is higher on heating oil than natural gas, which is more commonly used in other provinces.

Newfoundland and Labrador, which had been the only province exempt from regulations requiring gas to be blended with biofuels, is threatening to go to the courts.

“We’ve talked about, within the Department of Justice and within government, on the possibilities of constitutional challenge here, based on this,” the province’s Energy Minister Andrew Parsons said Wednesday.

“It’s gotten to that point where we have to look at all of our options to protect Newfoundlanders and Labradorians.”

Federal Conservative Leader Pierre Poilievre was touring the Atlantic region all week, accusing the Liberals of doing everything they can to make life less affordable. 

“How will our seniors manage to stay in their homes when they have to choose between eating and heating?” he said.

All of it has Atlantic Liberal MPs growing more nervous about blowback from their constituents. They are asking their government to explain what’s going on.

“We have not done a good job communicating it,” said Wayne Long, Liberal MP for Saint John — Rothesay, N.B.

“People are very, very anxious about what’s happening and how it’s going to affect them.”

Long wants Prime Minister Justin Trudeau to accept the meeting Atlantic premiers asked for, and with Irving Oil, and find a way to be more flexible and acknowledge the situation in the four Eastern provinces is not the same as elsewhere.

“I think we can help soften this for people and help people adjust,” he said.

He said he’s not in favour of delaying the policies, but said increasing the carbon rebate supplement for rural residents would be a start. So would reducing or delaying the application of the carbon price to home heating oil, he added.

Long said if the Liberal government does not adjust its plans, it will bleed support to the Conservatives. He said Poilievre needs seats in Atlantic Canada “if he has any hope of forming a minority or majority government.”

“I just don’t like to see us sit back, see a guy like him do this tour, really not offer any solutions, not be held to account and we don’t really respond,” said Long. “I think we just need to be a lot more aggressive in our messaging.”

This report by The Canadian Press was first published June 29, 2023.

Mia Rabson, The Canadian Press