“Someone explained to me recently that using the atmosphere as a sewer is not a long-term prospect.”

Bruce Carson
Canada School of Energy and the Environment 
Evidence April 13, 2010

Putting a price on emissions internalizes the environmental costs and financially motivates businesses and individuals to make choices that reduce carbon emissions. By so doing, it increases energy conservation and the competiveness of non or low emitting technologies. 

Generally, witnesses have stated to the committee that a carbon tax would be more economically efficient and less complex to administer than a cap-and-trade system. For either method, it was stressed that carbon pricing should be applied broadly and uniformly throughout the economy and across Canada.¹ 

In most carbon pricing schemes, the revenue generated is recycled into the economy by reducing income or payroll taxes or by funding technology research or other incentives that promote sustainable energy technologies.

Because each province and territory’s energy circumstances are different, national carbon pricing would have uneven impacts across Canada. These differences would have to be accounted for, perhaps, by ensuring that revenues are returned to the provinces/territories or by applying different rules for high growth regions.

The federal government’s position is that it will adopt a cap-and-trade system if the US government proceeds with cap-and-trade legislation. There is a concern with proceeding unilaterally with carbon pricing because it would place trade exposed energy intensive industries at a competitive disadvantage. 

Some witnesses agreed that Canada should align with the US so as to not harm Canada’s competiveness. However, there was concern that 1) the United States due to the nature of its legislative process may be slow in introducing emission reduction legislation²; 2) if or when the United States does introduce legislation it would be tailored to fit their energy and political circumstances and not those of Canada.

[2] On 26 June 2009 the US House of Representative s passed a bill, the American Clean Energy and Security Act commonly referred to as the Waxman Markey Bill, which would require reductions in greenhouse gas (GHG) emissions through a cap and trade mechanisms. On May 12 2010 Senators John Kerry and Joseph Lieberman introduced a corresponding bill, the American Power Act, in the US Senate but most observers predict that the passage of the Senate bill will not occur rapidly.