Competitiveness threatened by carbon tax
- 22 Dec 2016
- Saskatoon StarPhoenix
- GEOFFREY MORGAN Financial Post
Climate change policies key for ‘economic growth’
Environment linked to Canada’s long-term well-being, Trudeau says
CALGARY U.S. president-elect Donald Trump’s policies may make drilling and investing in the U.S. more competitive in the short term, but climate change policies are still necessary long term, given both global trends and state level legislation in the U.S., Prime Minister Justin Trudeau said Wednesday.
“We know that this is the way the world is going, and maybe there’s potential for short-term benefit by not engaging in the environment as strongly, but we also know that in the medium term and long term, economic growth and the wellbeing of our citizens is going to be linked to figuring out better ways to do things,” Trudeau told the Calgary Chamber of Commerce.
It was Trudeau’s first appearance in Calgary since he approved Enbridge Inc.’s Line 3 pipeline replacement project and Kinder Morgan Canada’s Trans Mountain pipelines expansion project late last month. He called those approvals “a major win for Canadian workers, Canadian families and the Canadian economy,” and said that he supported the construction of TransCanada Corp.’s Keystone XL pipeline to the U.S.
While the audience applauded his comments on those pipeline projects, the prime minister was challenged on whether his policies and plan for a national carbon tax would make Canada’s and Alberta’s economies less competitive relative to the U.S. given Trump’s statements on climate change.
“Regardless of what might or might not happen at the federal level in the coming years, at the state level, at the municipal level, at the business level across the United States there’s been tremendous investments, initiatives and forward movement on fighting climate change and being more responsible,” Trudeau said.
Still, attendees expressed their concerns about competitiveness following the speech.
Calgary Chamber of Commerce president and CEO Adam Legge said the federal government needs to be wary of investment flowing to the U.S. if costs are significantly lower than in Canada.
“The reality is that if the United States doesn’t move forward with a climate change agenda or some of the carbon taxations, we have to be careful with our agenda,” Legge said. “We’re not saying ‘Don’t move forward,’ but be very careful of our competitiveness.”
Canadian Association of Petroleum Producers president and CEO Tim McMillan said he was encouraged that the government included competitiveness as one of its eight principles it would consider when developing a framework for a national carbon price.
“In Canada, we’re looking at a global marketplace and we don’t just need to be competitive with the U.S., we need to be competitive with Saudi Arabia and Nigeria and Venezuela and we have to do that in a way that balances environmental performance and the economy,” McMillan said.
Calgary Mayor Naheed Nenshi questioned whether the carbon levy in 2017 will make the country uncompetitive. “It’s probably not at a level where that will happen,” he said. “As this continues with the federal government’s mandate to go to a $50 per tonne price on carbon, how are we going to figure that out in a way that makes us most competitive.”
Nenshi and Legge also echoed comments by Trudeau and said Canada could attract clean tech investment and talent if the United States “takes a step back” on pollution legislation.
“We know that this is the way the world is going and if the United States wants to take a step back from them, then quite frankly I think we should look at that as an opportunity to draw in investors where jobs and opportunities are going to be 10 years from now and 20 years from now,” Trudeau said.