How would federal parties handle the industrial carbon tax? Climate-focused voters in Hamilton want to know

The Liberal government has already cancelled the consumer carbon tax, but the issue of carbon pricing for industrial pollution is still on the table in the current federal election campaign.

The system, which varies slightly by province, makes large emitters pay into a fund that subsidizes projects to reduce industrial emissions. The Conservatives say that, if elected, they'd get rid of it.

That would mean an end to a source of funds that helps pay for projects like the green steel plans at ArcelorMittal Dofasco, says Ian Borsuk, executive director of Environment Hamilton. He says that with no financial incentive to reduce pollution, it's likely that many businesses would abandon plans to improve their emissions, further escalating global warming.

Borsuk says the issue is particularly salient in Hamilton, where residents are faced with industrial emissions that contain known chemicals that negatively impact human health. These include sulfur dioxide, nitrogen dioxide, and benzo(a)pyrene, a carcinogen found in levels higher than provincial guidelines in all urban areas of Hamilton.

"I find it hard to believe the average Canadian is wanting a local employer and business not to improve their environmental practices, and not reduce emissions, that in turn, helps their own health," says Borsuk. 

"If we want to have clean air, that is a direct benefit" of the carbon tax for industry, he says. "Without an industrial carbon tax … there's no incentive for those companies to make these changes that really benefit all of us."

How does the industrial carbon tax work?

An industrial carbon price has been a key part of the Liberal government's plan to tackle climate change, giving economic incentives to reduce emissions — by both carrot and stick. Large-scale emitters have thresholds for how carbon-intensive their operations can be. Those that exceed it have to pay. Those that produce less carbon pollution than allowed can profit by having surplus credits to sell.

Currently, the federal government directly administers the pricing system in Manitoba, Prince Edward Island, Nunavut and Yukon. All other provinces, including Ontario, run their own programs, but they need to comply with federal standards on the price put on companies and how the money is used.

An independent analysis last year found it the most effective part of the government's policies to lower emissions in Canada, and industrial voices were publicly supporting it — until recently.

The Conservatives say they would remove the federal requirement, leaving it to provinces to run their own pricing systems if they choose, and expand federal tax credits aimed at clean technology and manufacturing.

Hamilton area voters say more tools needed, not fewer

For some voters who identify climate change and the environment as among their top concerns, cancelling the carbon tax for industry is a non-starter.

"An industrial tax has the potential [to] play a much larger role than the consumer carbon tax ever could" when it comes to creating a more sustainable country, said Dundas resident Kris Gadjanski, 58. "For me, voting for a person who promises to eliminate the industrial carbon tax would be foolish and short-sighted, and is simply not an option."

St. Catharines resident Andrew Stewart says he would have preferred to keep the consumer carbon tax as well. 

"We need more tools to combat climate change, not fewer," said Stewart, 35. "While imperfect, I think the Liberals did a very bad job communicating the purpose and value of the tax-rebate system, and the Conservatives did a very good job vilifying it."

"I think we can both invest in Canadian industry and manufacturing, have good jobs and a strong economy, and also make strong intentional moves to decarbonize our systems," he added. "They are not mutually exclusive." 

Here's what the parties are promising.

Conservatives

Conservative Leader Pierre Poilievre has spent years making opposition to the carbon tax a central part of his brand. His vow to "axe the tax" would remove it from steel, aluminum, natural gas, food production, concrete and all other major industries, "lowering prices and bringing home powerful paycheques for Canadians," his party said in a press release earlier this week.

"Provinces will continue to have the freedom to address the issue as they like," says the party's website, which has also criticized the Liberal government for not repealing the carbon tax law, suggesting the removal of the consumer tax may not be permanent. 

The Conservatives say they will instead create tax credits for companies that invest in clean technology. "Heavy industries who make products with lower emissions than the world average will be rewarded, bringing jobs and production home and bringing global emissions down," states the party's website.

Greens

Green Party press secretary Fabrice Lachance Nové says removing the industrial tax would allow "big polluters [to] get richer, and everyone else faces the consequences. Removing the carbon tax means continued or even increased levels of air and water pollution in surrounding areas, negatively impacting the health of residents. Pollution leads to extreme weather, making life more expensive for everyone."

Lachance Nové says the Greens would gradually increase the carbon price after 2030 while making sure low-income and rural Canadians are not unfairly affected. "We support tariffs on imports from countries with weaker environmental laws to protect Canadian industries from unfair competition," he told CBC Hamilton in an email. 

The party's website also says it would "stop giving public money to oil and gas companies and invest it in clean energy instead, "create strict, science-based limits on Canada's total pollution." and "make companies prove they have real plans to deal with climate risks."

Liberals

The Liberal party has pledged to keep and strengthen the industrial carbon price, and is also promising programs to help households lower their emissions, using money from polluters to pay citizens who reduce their footprints. It is pledging to make it easier for industrial businesses to access and plan for funding that helps them green their operations.

"The current approach provides industrial emitters with price certainty for their emissions but price uncertainty for carbon abatement," states a press release on MarkCarney.ca, shared with CBC Hamilton by Liberal spokesperson Carolyn Svonkin. 

The party is also promising a "carbon border adjustment program," adding a fee to carbon-intensive products coming into the country. It says its measures to make Canadian businesses more green will make them more competitive in international markets, allowing them to "leapfrog" the United States.

New Democrats (NDP)

The NDP is promising to keep the industrial carbon price and the emissions cap, as well as introducing a border carbon adjustment "so overseas polluters don't undercut Canadian workers, and clean industries like Canadian steel and cement stay competitive," according to a statement on the party's website.

Hamilton Centre NDP candidate Matthew Green says the party will end tax breaks for oil and gas companies, and use the money to better support ordinary people and families in efforts to use less oil and gas. "This will free up billions to help people retrofit their homes to save them money on their heating bills, and to help them lower their carbon footprint," Green told CBC Hamilton in a statement emailed by his party. 

Party Leader Jagmeet Singh said the NDP's goal is "a country where no one is priced out of heat, out of safety, or out of their home," according to the party's website, which says more climate measures will be announced in the coming weeks.

• Why industrial carbon pricing may survive in Canada despite 'axe-the-tax' sentiment