Halifax Chamber Warns Of More Inflation Due To Carbon Tax
HALIFAX — For Nova Scotians worried about inflation, the federal government’s carbon tax decision will only add to their concerns.
On Monday, federal environment minister Stephen Guilbeault rejected Premier Tim Houston’s so-called “Better Than a Carbon Tax” plan. That means the federal carbon tax will soon take effect in Nova Scotia.
Guilbault stated Nova Scotia’s carbon plan does not meet guidelines or mention putting a price on carbon pollution.
“You are proposing to end Nova Scotia’s cap and trade system, with no replacement that would put a price on pollution,” Guilbault wrote in a letter.
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The federal carbon tax is expected to increase prices at the fuel pumps by 14 cents a litre. Halifax Chamber of Commerce President Patrick Sullivan says businesses will, once again, have to pass on those inflationary costs to consumers.
“Every business and every consumer, ultimately, in Canada, relies on energy to get around and relies on energy to heat their homes or their business. This will have an impact right across the board,” said Sullivan.
“This is an additional cost [and] ultimately those costs will get passed onto consumers.”
Sullivan also noted that the decision will likely cause the food inflation crisis to worsen, given the fact that Nova Scotia relies on most of its produce to be transported from hundreds and thousands of miles away.
“I think food will go up. Nova Scotia is not self-sufficient in foodstuffs, so when we’re getting avocados and when we’re getting peaches, those costs are going to go higher. If the Bank of Canada wants inflation to be reduced, this is a strange way to do it.”
Sullivan said the carbon tax isn’t a shock to Halifax business owners since the Trudeau government has been working on it for years. But he expressed disappointment that the provincial government seemed to procrastinate on making a deal with the feds.
“The federal government hasn’t really made any secret [about] their intention to implement a carbon tax and what that carbon tax would look like.”
“I don’t think we’re surprised by the response from the federal government to the Novia Scotia proposal. We’re surprised that Nova Scotia waited until mid-august before they started to have conversations or write letters to the federal minister.”
Nova Scotia has so far been able to avoid a federal carbon tax by implementing a cap and trade program on big polluters. The plan was created by the previous Liberal government but a new plan is required and each province has until September 2 to come up with one that meets federal standards.
Nova Scotia’s Minister of Environment and Climate Change, Timothy Halman, says he feels the federal government has missed an opportunity to work with Nova Scotia to reduce greenhouse gas emissions.
“This is very disappointing for all Nova Scotians, there is no doubt that a carbon tax will increase prices in our province. The federal tax will hit low to middle income Nova Scotians the hardest,” he says.
Halman says Nova Scotia will now look at their next steps and asks the federal government to take another look at the plan.
“We had hoped the federal government would be open to a made-in-Nova Scotia solution, they’re choosing to add a tax to address climate change rather than accept a plan that does more for the environment and costs Nova Scotians less,” he says.
Provinces like Alberta, Saskatchewan, Manitoba, and Ontario have been working with a carbon tax since 2019. It appears Guilbault has left the door open for further negotiations with Nova Scotia, but if it goes forward the tax will come into effect next year.
Derek Montague is a Huddle reporter in Halifax. Send him your feedback and story ideas: [email protected]. With files from Steve MacArthur and Jakob Postlewaite.