New Brunswick's new carbon price plan faces Friday deadline

Premier Blaine Higgs is promising to meet a federal deadline Friday for a new carbon pricing plan.

The province must tell the federal government by the end of the day how it plans to extend its carbon tax to comply with stricter national standards that will come into effect in 2023.

On Thursday, the four Atlantic premiers wrote to federal Environment Minister Stephen Guilbeault asking for an extension of the deadline. 

But Higgs told reporters New Brunswick's proposal is ready.

"We will submit and meet the deadline if the minister doesn't extend it," he said.

"If we don't get that extension and further discussion, we will be submitting as a province because we're able to do that. And we're ready. But I do think we need to pull back and have a sober second thought."

Late Thursday, Guilbeault said he would not extend the deadline. 

"Atlantic provinces, like all other provinces and territories, have had a year to prepare their submissions," he said in a statement.

"The deadlines were clearly and repeatedly communicated and are based on the legal requirements to update the national pollution pricing system at regular, predictable intervals."

Guilbeault said, however, he was prepared to work with the four Atlantic provinces over the next two weeks to come up with "practical programming solutions" to issues the premiers have raised over home heating costs.

Atlantic premiers united

In the letter Thursday letter, Nova Scotia Premier Tim Houston wrote on behalf of his three Atlantic counterparts that higher energy prices due to carbon taxes "will amplify the inflationary pressures currently being felt in Atlantic Canada."

Houston asked for a "short-term extension" of the deadline so that the four provinces can talk to Ottawa about "mitigating" the impacts of carbon pricing. 

The letter did not acknowledge that the national climate plan gives provincial governments the latitude to rebate all the carbon tax revenue they collect directly to consumers, if they choose to do so.

Guilbeault pointed that out in his statement.

"Provinces have every opportunity to design systems that support families by returning revenues back to people," he said.

He also noted that the federal carbon price in place in provinces that refuse to implement their own involves annual rebate cheques worth a total of $800 to $1100 for the average family of four.

Higgs has returned some of the revenue to New Brunswickers through tax cuts but has also used some of the money for programs.

On Thursday, he again questioned the merits of carbon taxes as a way to give consumers an incentive to reduce their use of fossil fuels, including gasoline.

"What has that changed, other than the increased cost of living for a lot of people? Is it achieving the result?" he said. 

"Have we seen consumption changes as a result of that?"

Increases

New Brunswick's consumer carbon tax is 11 cents per litre of gasoline this year and will increase to 14 cents next April 1. Those rates are required under the federal standard.

The province adopted the tax in 2020 but reduced its provincial gas tax by four cents to offset the impact of what was then a 6.6-cent-per-litre charge.

Ottawa has warned other provinces that under the new, more stringent pricing standards starting in 2023, they won't be allowed to imitate New Brunswick's offsetting gas-tax cut.

But it hasn't forced New Brunswick to eliminate the four-cent offset either and has given no indication it will under the new standards.

In 2021 and 2022 as the carbon tax increased, the Higgs government didn't cut gas taxes further. Instead it reduced income taxes to blunt the higher cost at the pump, something the federal plan allows.

Another key element of New Brunswick's new plan for 2023 and beyond is whether it will try to keep rebating the carbon tax on natural gas for home heating.

The federal rules require that the tax apply to gas sales, but the province is using the revenue it collects to pay gas distributor Liberty Gas to rebate customers directly on their bills, eliminating the additional cost.

Ottawa allowed that when it approved the initial Higgs carbon tax model in 2020 but says the new more stringent standard won't allow any rebates that interfere with the "price signal" the carbon tax is supposed to send to consumers.