(Bloomberg) -- Canada’s Conservative leader pledged to scrap the country’s industrial carbon price if elected, but the extent of the impact on businesses will depend on whether provinces follow suit.
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Pierre Poilievre said Monday he will repeal the carbon tax law introduced by the previous Trudeau government if he wins an election that’s expected within weeks. That would cancel not only the consumer price but also the tax faced by heavy industry.
It’s the first time Poilievre has been explicit about canceling the industrial tax. He has long promised to kill the consumer price, but new Prime Minister Mark Carney essentially neutralized that election issue on Friday by signing an order to reduce that price to zero.
Poilievre is instead promising to offer tax credits to big businesses with lower emissions than the global average. The tax cut will help bring jobs and investment to Canada as President Donald Trump ramps up his economic threats on the US’s northern neighbor, Poilievre argued.
A Conservative government “will use technology, not taxes, to protect our environment,” Poilievre said in a video. “While Liberals tax businesses for using energy, Conservatives will cut taxes and boost incentives for those who bring down emissions. Carrot, not stick.”
The plan raises questions about how Poilievre would achieve Canada’s climate goals and injects more policy uncertainty for businesses. Carney has promised to “tighten and improve” the industrial carbon price and introduce new incentives for consumers to make green choices.
Poilievre’s announcement also means that provinces may now grapple with their own industrial carbon prices. The current system requires provinces and territories to impose one or rely on the federal tax – and only Manitoba, Nunavut, Prince Edward Island and Yukon have opted for the latter.
Canada’s main oil-producing province of Alberta indicated on Monday that it would likely maintain the price on heavy polluters that it’s had since 2007. Premier Danielle Smith said in a joint statement with her environment minister that they support the commitment to “return jurisdictional authority back to the provinces to regulate their own industrial emissions.”
Ontario, the country’s most populous province and its manufacturing epicenter, didn’t directly answer when asked about its industrial price. Premier Doug Ford’s office said in a statement that “in light of President Trump’s tariffs, all levels of government need to look for ways to lower costs, support people and businesses, and make us more economically competitive.”