P.E.I. can have full carbon rebate while still funding environmental programs, say Greens

P.E.I. can return all carbon tax revenues back to Islanders while still funding important programs to reduce emissions, the leader of the Green Party told the legislature Tuesday, the third straight day of debate over the province's approach to carbon pricing.

The Greens are calling on the province to return all $31.6 million it plans to take in from the carbon tax during the next fiscal year in rebates worth (depending on whose estimate you go with) anywhere from $600 to $1,000 per year per household.

Government's plan instead is to provide rebates of up to $140 to households earning less than $70,000, and use the rest of the money to fund existing clean energy programs and offset other fuel taxes.

"You tell me how someone who is minimum wage or lower can afford a heat pump or can do something different with $800," said Finance Minister Darlene Compton.

"We are taking the money that we have and giving Islanders heat pumps. We're helping with EVs, electric vehicles."

Bevan-Baker said his party supports those programs, but that they don't have to be funded by carbon tax revenues.

"The whole debate here seems to boil down to how much government is prepared to invest in fighting climate change," he said. 

"This government is saying that we can have either full carbon rebates or robust climate programs, but we on this side of the House say you can have both."

What the Greens are calling for is something akin to the federal backstop carbon pricing program implemented in provinces including Alberta, Ontario and Saskatchewan, where at least 90 per cent of revenues from the federal carbon price on emissions — set to increase to $50 per tonne on April 1 — is returned to households.

Biggest expense for P.E.I.: reducing gas taxes

On Friday, government circulated to media a breakdown of funding for "net zero initiatives" corresponding to the amount of revenues taken in by the carbon levy.

But the biggest item on that list is not an expenditure to reduce emissions: the province is committing $13,204,000 in carbon levy revenues in the coming fiscal year to offset the province's excise tax on gasoline.

That's part of a legacy deal struck by the previous Liberal government in P.E.I. with the Trudeau Liberals, where the province was allowed to lower its own excise tax on gasoline while being required to introduce Ottawa's new carbon tax. The offset amounts to two cents per litre of gas.

But during debate, Bevan-Baker questioned why government was tying funding for programs that pre-date the carbon levy — like the rebate program for heat pumps — with the carbon tax itself.

CBC News also asked government for information explaining revenue projections on the carbon levy, but received no information in response.

The province's new budget is forecasting that revenues will increase from $29 million in the current fiscal to $31.6 million in the new fiscal year — an increase of 9 per cent.

• EDITOR'S NOTE: The province tabled a page of corrections to the budget on March 30, after this story was initially published.

But the province is being required to increase its price on carbon from the current $30 per tonne to $50 — a 67 per cent increase.

The federal government is allowing P.E.I. to continue to exempt some fuels from the carbon levy for one more year, including home heating oil and propane. It's also letting P.E.I. continue an exception on fuels used in fishing, farming and for cruise ships and interprovincial aircraft.

Minister of Environment, Energy and Climate Action Steven Myers said to do what the Green Party is asking for — continue funding environmental programs while returning all carbon tax revenues to Islanders – P.E.I. would have to give up its exemptions.

That's something he said the federal government will likely require the province to do next year.

"If we took that party's position today and took the green backstop, on Friday, furnace oil will go up 13 cents and gas will go up seven cents," Myers told the House, "because we're currently paying that down, because we worked with Ottawa and they've given us another year exemption on that deal."