Ottawa rejects Higgs's request to delay carbon plan for industry

The federal government is rejecting New Brunswick Premier Blaine Higgs's request that it delay imposing its carbon-pricing system on large industrial emitters next month.

Ottawa says New Brunswick missed a key deadline for filing an acceptable climate plan and that means its industrial levy will kick in on Jan. 1.

"New Brunswick's proposed system does not meet the federal benchmark stringency requirements," said Vincent Hughes, a spokesperson for federal Intergovernmental Affairs Minister Dominic LeBlanc. 

"Therefore, the federal carbon pollution pricing system will apply in the province. For larger industrial facilities, an output-based pricing system will start applying in January 2019."

The rejection comes just as Higgs prepares for his first first ministers' meeting with Prime Minister Justin Trudeau and other provincial and territorial premiers.

On Wednesday, Higgs unveiled what he called his new government's climate plan, though the three-page document had no details on how the Progressive Conservatives will regulate industrial emissions.

The previous Liberal government of Brian Gallant planned to allow Ottawa to apply its pricing system on industry in the province.

That regime will measure industrial emissions sector-by-sector and will require plants that emit carbon dioxide above the average to pay a levy.

Higgs asked for Ottawa to postpone application of the levy to give him time to come up with an alternative model. He didn't say how he'd regulate emissions, but he did promise to meet reduction targets that match Canada's commitments under the Paris climate agreement.

The provinces had until Sept. 1 to submit plans that comply with the federal requirement for a higher cost on emissions for both consumers and industry.

Liberal plan rejected

New Brunswick's submission was filed by the Liberals and included adoption of the federal levy for industry.

But Ottawa officially rejected it Oct. 23 because the consumer part of the plan was a shift of existing gas tax revenue into a climate fund with no higher cost at the pump.

The federal carbon tax on consumers will be applied in New Brunswick next April. Federal estimates say it will cost an average New Brunswick family $207 more in 2019.

But Ottawa has pledged to rebate 90 per cent of what it collects in the recalcitrant provinces. It estimates an average New Brunswick family will get a rebate of $256.

Higgs said his government will challenge the federal government's jurisdiction, arguing it doesn't have the legal authority to impose a carbon tax on the province.