Gallant predicts Ottawa will approve his carbon-pricing plan

Premier Brian Gallant insists he can persuade the federal government to approve of his carbon-pricing plan and not impose new taxes on New Brunswick a year from now.

And he says he doesn't regret signing on to a pan-Canadian climate plan that could see voters go to the polls next year without knowing what kind of carbon price they'll end up with.

"We believe that the carbon pricing mechanism that we put in place is the right approach for our province," Gallant said in a year-end interview with CBC News.

• Despite federal doubts, Brian Gallant unwavering for now on subtle 'carbon tax'

"And it's one which we suspect the federal government will see is complying with what we need to have happen here in this country."

Earlier this month, the Liberal government announced a carbon-pricing plan that will see a growing share of the 15.5-cent-per-litre gas tax diverted into a climate fund over the next five years.

The province argues this creates a price on carbon, even though there'll be no net tax increase on NewBrunswickersat the gas pumps.

Federal environment minister Catherine McKenna responded that the system doesn't meet Ottawa's requirement for "a new incentive to cut carbon pollution." She said New Brunswick must create a new "price signal" that "makes pollution more expensive."

Plans reviewed in Sept. 2018

The goal is to reduce emissions to 30 per cent of 2005 levels by 2030 to comply with the Paris climate treaty.

McKenna announced this week that the federal government will formally review all provincial plans after Sept. 1, 2018. On Jan. 1, 2019, it will impose its own carbon tax on provinces that don't meet its standard.

That means New Brunswickers will vote in the Sept. 24, 2018 provincial election without knowing whether Gallant's plan will get McKenna's approval--or whether they'll be paying the existing, diverted gas tax, or a new federal tax, a few months later.

• Liberals make surplus disappear with new carbon-pricing plan

PC opposition leader Blaine Higgs says it's "not necessarily a coincidence" that the federal timeline will leave what he calls "the unknown tax" unresolved when voters go to the polls.

"It'll be an election issue because we will want to know the facts," Higgs said. "Will we get them? Facts are hard to come by, so it's unlikely."

In the year-end interview, Gallant repeated his argument that New Brunswickers should not pay an additional carbon tax because the province has promised to phase out coal by 2030, has already hit emissions-reduction targets for that year, and taxes gas higher than Alberta.

"No other province can say all of these things," he said.

A strong case

University of New Brunswick economist Herb Emery said Gallant has a strong case.

He said New Brunswick has already done its part in reaching the overall Canadian emissions goal for 2030, while heavy-emitting provinces like Ontario and Alberta are unlikely to do so.

Forcing new carbon pricing on New Brunswick to reduce emissions further in effect gives Alberta more room to increase emissions within the overall federal target.

"If Alberta continues to grow its carbon emissions and those are basically being purchased by cratering New Brunswick's economy, we then have to ask if this federal scheme actually a detriment to regions that are ahead of the game in terms of carbon reduction?" Emery said.

He said rather than require all provinces to impose a similar carbon price, Ottawa could have taken New Brunswick's existing emissions decline and counted it toward the Canadian goal.

"New Brunswick's getting zero credit for having reduced emissions under the current federal scheme, which requires everyone to have the same price of carbon," he said."If you've achieved your target, what's the logic for imposing more harm on the local population?"

Gallant was one of eight premiers who endorsed Ottawa's climate plan in a December2016 agreement that included new carbon pricing and emissions reductions.

• Federal environment minister questions province's carbon price plan

Emery said it was curious Gallant is now arguing New Brunswick doesn't need either and is insisting he can persuade Ottawa of that.

"A principled premier might say to the federal government, 'we've done our bit, we've imposed higher taxes already so if you really want this, it's going to be you that levies the tax and returns the funds, so that it's clear to New Brunswickers who's pushing for this."

Step up game

Gallant said the idea of heavy-emitting provinces doing more did come up at the December 2016 first ministers' meeting.

"During discussions, it certainly was raised. But the idea is as a country we are doing things to combat climate change, [so] we all agreed we had to step up our game. So that's what we're doing."

He refused to say whether a re-elected Liberal government would modify its carbon price after the 2018 election if Ottawa rules the New Brunswick plan doesn't measure up.

The other option would be to do nothing and have the federal government impose its tax in the province.

Gallant dismissed the question as hypothetical.

"We really think we are going to be able to demonstrate we are hitting our emissions targets for 2030," he said.

"It's quite possible that the premier's right," Emery said. "They will come to a resolution that allows New Brunswick to carry on with its plan and that also allows Ottawa to save face and make a case that they haven't set a precedent."