A Brief History of the Canadian Carbon Tax

Carbon taxes have more sources than our current politics would have you believe

December 16, 2016

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Canada, under successive federal and provincial governments, has become a continental leader in carbon pricing. Some see it as a green gateway to getting a new pipeline built, while others see it as the industry’s death by a thousand cuts or, at very least, a giant tax grab.

Canada’s carbon-tax history began in March 2007, when Alberta became North America’s first jurisdiction to legislate greenhouse gas reductions from large industrial emitters via a carbon levy. The following month, B.C. joined forces with five U.S. states in the Western Climate Initiative—a market-based group aiming to tackle climate change. Ontario and Quebec have since signed on too. In May 2008, Conservative federal environment minister John Baird called carbon trading a “key part” of the government’s emissions plan targeting oil and gas producers and coal-fired power plants. In July of that year, B.C. became the first province to implement a carbon tax—with proceeds going back to taxpayers.

In the 2008 federal election, Conservative and Liberal leaders both included carbon pricing in their platforms. The Conservative government of Stephen Harper won a minority mandate with a campaign that pledged to “develop and implement a North America-wide cap-and-trade system for greenhouse gases and air pollution, with implementation to occur between 2012 and 2015.” Following the election, Conservative environment minister Jim Prentice began to explore a national carbon market, “something that has never been done before in this country,” he said. That plan was dropped when the Conservatives won a majority government in 2011.

Fast-forward to 2016 and by the time Liberal Prime Minister Justin Trudeau announced plans for a national carbon pricing plan, several provinces—excluding, most notably, Saskatchewan—already had one in the works.

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