Conservatives announce plan to replace Liberal carbon tax with a lower levy of their own

Conservative Party leader Erin O’Toole unveiled a climate plan today which will put a price on carbon for consumers.

But instead of the Liberal carbon-tax-and-rebate system, Conservative Leader Erin O’Toole is proposing to charge a levy on fuel purchases and use the money to fund personalized savings accounts which Canadians can use for environmentally friendly purchases.

Under O’Toole’s plan — which CBC News obtained a copy of Wednesday — Canadians would pay a carbon levy, initially amounting to $20 per tonne of greenhouse gas emissions, every time they buy hydrocarbon-based fuels, such as gasoline.

But instead of channeling that money into direct rebates to Canadian households, as is the case currently, the Conservatives would divert it to “personal low carbon savings accounts.”

Consumers could then draw on those accounts for “things that help them live a greener life,” the document says. “That could mean buying a transit pass or a bicycle, or saving up and putting the money towards a new efficient furnace, energy efficient windows or even an electric vehicle.”

At today’s press conference announcing the new plan, O’Toole compared it favourably to the current system.

WATCH: Erin O’Toole releases Conservative climate plan

Erin O’Toole releases the Conservative Party’s climate plan. 1:30

“We recognize that the most efficient way to reduce our emissions is to use pricing mechanisms,” he said.

“However, having a market-based approach means that we cannot ignore the fact that our largest and most integrated trading partner — the United States — does not yet have a national carbon pricing system.

“And the present state of global trade allows some of the world’s worst polluters to become free riders to the detriment of Canadian workers. Any serious plan must recognize these realities.”

Under O’Toole’s plan, Canadians would pay a carbon tax, initially amounting to $20 per tonne of greenhouse gas emissions, every time they buy hydrocarbon fuels, such as gasoline. (Michelle Siu/The Canadian Press)

The Conservative Party’s carbon price would increase over time to a maximum of $50 per tonne. But it would go no higher than that, according to the plan.

O’Toole declined to call his proposal a “tax,” instead referring to it as a “pricing mechanism.”

“Not a cent goes to Ottawa,” O’Toole said.

O’Toole added that he believes Conservative voters who are opposed to carbon pricing will see the benefits of his plan. He also said that he would work closely with the provinces on implementing the plan.

Private sector consortium to manage accounts

The current Liberal policy — which applies only in provinces that have not set up their own carbon pricing — sets the price at $40 per tonne, rising $10 each year to $170 per tonne by 2030.

Under the Liberal policy, which was passed into law in 2018, 90 per cent of the revenue is returned to consumers in those provinces via rebates. The remaining 10 per cent is directed toward businesses, schools, hospitals and municipalities.

The Conservative proposal says the personalized accounts could be managed by a private sector consortium in a manner similar to Interac, Canada’s debit card system.

The proposal states that a personalized savings account is preferable to the government controlling the money because Canadians can’t be sure the prime minister “won’t be tempted to use the carbon tax revenue to fund his big government plans.”

Tories say their plan meets emissions reductions target

The plan also specifies that Conservatives are prepared to maintain the current output-based pricing system on larger industrial emitters that the Liberal government has put in place, though they will assess what Canada’s trading partners are prepared to do.

Currently, large emitters are charged a levy at the same rate as the consumer fuel charge. To provide an incentive to reduce emissions while also addressing competitiveness concerns, companies are then given a subsidy tied to the average emissions intensity across their sector.

The rest of the Conservatives’ 15-page plan document covers a number of other promises, including a zero-emissions vehicle mandate, investments in technology and a promise to develop a “national clean energy strategy.”

At today’s announcement, O’Toole pointed to a proposal to charge a tariff on products from countries with lower emissions and environmental standards than Canada — singling out China in particular.

O’Toole refered to it as a “carbon border adjustment tariff” on “bad actor countries.”

He said the measure would protect Canadian jobs.

“I think most Canadians don’t want to see Canadian jobs being shifted to China, where they don’t respect the climate change commitments democratic countries are meeting ” he said. “So I think Canadians know that that tariff will price out some of these bad actor country products in a way that other countries are looking at as well.”

The Conservatives also say their plan has been independently analyzed to ensure it meets Canada’s emissions reductions target for 2030, though no details of that analysis are included in the copy of the plan obtained by the CBC.

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