P.E.I. carbon tax won't be given back in tax breaks

P.E.I.'s minister of communities, land and environment says revenue collected through an Island carbon tax will not be returned in the form of tax breaks, as it is in British Columbia.

Robert Mitchell said he wants to help low income Islanders with the costs, but otherwise the money collected on P.E.I. will go to climate change adaptation and mitigation. 

"We're probably one of the most impacted provinces in Canada from what occurs in the climate change, so we certainly have to do some work towards mitigation. We certainly have to do work towards adaptation," said Mitchell.

Low income Islanders will be protected

But he assured Islanders who don't earn large sums of money will be protected. 

"We do have a vulnerable community that we do have to work with to protect."  

Many advocates of a carbon tax emphasize it should be revenue neutral, as it is in B.C., with all money collected returned to taxpayers in the form of income tax and corporate tax breaks.

But Mitchell said P.E.I. has different priorities.

"Whether it's sea level rise or soil erosion from our coastal shorelines, we have to prepare for preventing those things, so all of those dollars will be used towards all of that," he said.

Federally mandated

During a presentation to the communities, land and environment standing committee Wednesday, Mitchell said P.E.I. has no choice but to move forward with either a cap and trade system or a carbon tax, after the federal government mandated it.

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Trudeau has said the federal government will impose a carbon tax on any province that doesn't have some form of carbon pricing in place by 2018. Any money collected through this would be returned to the province, but Mitchell said he prefers designing a 'made in P.E.I.' solution. 

Mitchell knows the tax will be a tough sell, but he said, eventually, the tax will generate savings for Islanders. 

"Over time the theory would be that you will use less fuels, therefore you will save more money and use programs to insulate and heat your house more efficient," said Mitchell.

"All of those at the end of the day will bring the cost down and will be good over time, but it takes time to get there."

Likely will start at $10 a tonne 

Mitchell says P.E.I.'s carbon price will likely start at $10 a tonne, the minimum price set by the federal government, but four departments will hold discussions over the next year to decide the best approach. 

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Given that only seven per cent of the Island's emissions come from industry, a cap and trade program would not get P.E.I. to where it needs to be in terms of emissions reduction.

The province has set a target along with the other eastern provinces of 35 to 45 per cent below 1990 emissions levels by 2030. That's a more aggressive target than the one set federally at the UN climate change meeting in Paris.

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