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

Premier Brian Gallant is rejecting criticism from his federal Liberal allies that his plan for a New Brunswick carbon tax doesn't go far enough.

And Gallant sayshe will challenge that criticism when Ottawa launches its formal assessment of the system next year an assessment that could lead to a federally imposed carbon tax in the province.

"We're standing by this mechanism and we will stand up to somebody that would say that we're not fulfilling our requirements," Gallant told reporters Friday.

Rather than create a new carbon tax on consumers, the Liberal government plans to shift money from the existing gas tax into a fund for climate projects, meaning no net increase for drivers at the pumps.

• No 'direct' carbon tax planned for consumers, environment minister says

Under legislation introduced Thursday, 2.3 cents of the 15.5-per-litre provincial gas tax would move into the fund next year, rising each year to reach 11.6 cents in 2022.

But late Thursday,FederalEnvironment Minister Catherine McKennasaid the New Brunswick legislation "does not create a new incentive to cut carbon pollution."

"Investing in climate action is great but a carbon price does more than that," McKenna wrote on Facebook. "It also changes economic decisions by sending a price signal that wasn't there before. That price signal makes pollution more expensive and rewards clean innovation."

Unfair addition

Gallant said it would be unfair to add a carbon tax on top of existing taxes at the gas pumps because the Liberals already raised the provincial gas tax in their 2015 budget before the federal Liberals were elected and began pushing for a national climate plan.

"I don't think New Brunswickers should have to see yet another increase just because we did it just a few months before we all started talking about this," he said.

The 2015 increase was 1.9 cents per litre, and Gallant said "one of the reasons" was to encourage people to use less fuel.

"It's good for the efforts we're going to put forward to combat climate change," he said.

Contradictions

But that is contradicted by the 2015 budget speech by then-Finance Minister Roger Melanson, which did not cite carbon dioxide emissions as a reason for the tax hike. That speech said low gas prices made it possible for consumers to absorb the increase.

It's also contradicted by officials from the Environment Department who told reporters Thursday an additional tax on gasoline would not change consumer behaviour because many New Brunswickers lack transportation options other than their cars.

• Liberals' sleight-of-hand carbon tax formally proposed in climate bill

"Not all officials would be around the cabinet table when discussions are being made," Gallant said, "and I can tell you it was discussed indeed."

Flout federal plan

The premier's comments make his government the third in Canada and the first that is Liberal to explicitlyflout the federal carbon plan. Saskatchewan has refused to implement a broad carbon price, and Manitoba is refusing to increase its levy to the required level.

Asked about the three recalcitrant provinces, McKenna said Friday morning in Ottawa, "we were very clear last year as part of our climate plan that there needs to be a price on pollution, and we need to see it across the country."

• Provinces have until the end of 2018 to submit carbon price plans: McKenna
• Federal bills on carbon pricing, coal, clean fuels expected in 2018

The federal government says it will impose its own carbon-price system, or parts of it, on provinces that don't do enough themselves.

Orchestrated script

The Opposition Progressive Conservatives believe Gallant's stance is part of an orchestrated Liberal "script" to help get the party re-elected next year.

PC MLA Jeff Carr pointed out Gallant was in Ottawa on Wednesday night to attend a federal Liberal Christmas party, where he posed for a photo with McKenna.

"Catherine McKenna says, 'OK, you do it this way, I'll pretend to be mad at you, then after the 2018 election, we will impose the carbon tax or you can do it for us, and you'll already be re-elected,'" Carr said.

Green Party Leader David Coon said there are other ways to implement a broad carbon tax without hitting consumers at the pumps.

His party supports taxing fossil fuels as they enter the province, such as when crude oil is imported to the Irving Oil Refinery.

"There's many ways you can do that," Coon said. "There's all kinds of ways you can do that creatively so that people who aren't part of the problem don't pay any money.

"But instead [Gallant] has decided to sit on his hands and let the federal government impose that on us. And that's unfortunate."

Change possible

Gallant would not rule out changing his carbon-price plan, but said he would only consider it when other provinces catch up to New Brunswick's efforts to reduce emissions.

He selectively compared the province to several others to argue a new tax isn't needed here. New Brunswick taxes gas higher than Alberta, will phase out coal faster than Nova Scotia, and has hit 2030 emissions-reduction targets ahead of Manitoba, he said.

When those provinces match New Brunswick, he said, "then we'll certainly be willing to talk" about additional carbon taxes.

McKenna praised other elements of the province's carbon-pricing plan, including the decision to adopt the federal levy on large industry that will see facilities pay if they don't reduce their emissions.