New Brunswick is still deciding where some of the projected carbon tax revenue will go, but the Treasury Secretary says it will return to consumers in some way.
“There are four options that they are currently considering,” said Ernie Steeves, Minister of the Treasury and Treasury, declining to list these options for reasons of cabinet confidentiality.
“In one form or another, it will return to the people.”
According to the budget presented on Tuesday, the province is forecasting carbon tax revenue of $ 163 million for the coming fiscal year. Of this, $ 36 million will go to the Climate Change Fund, $ 12 million to the provincial natural gas distributor to offset the increased cost of carbon tax, and $ 9 million to First Nations communities.
The largest part, about $ 78 million, is to offset the 4.6 cents per liter cut in gas use tax announced in last year’s budget to partially offset the carbon tax, which fell to about 6.6 cents on April 1 per liter has increased.
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That leaves out $ 28 million that Prime Minister Blaine Higgs says will not go towards a similar cut in consumption tax this year.
“We’re not thinking about it right now,” Higgs told reporters on Wednesday.
That means consumers will see an additional 2.2 cents per liter on the pumps in April if the price of carbon climbs to $ 40 per ton, or 8.8 cents per liter of gasoline. Legislation to allow this increase was introduced on Wednesday.
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Higgs said the 2020 excise tax cut was a one-off step to alleviate the roughly 7 cents per liter blow to consumers. Although Higgs has raised concerns about the ability of the Canadian energy sector to remain competitive with jurisdictions that impose less stringent environmental standards.
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What will happen to the $ 28 million is being debated, but Higgs hinted that discounts could be one of those options. New Brunswickers received a tax break from the federal government in 2019 when the province was under federal government backstop after the carbon plan of the previous Liberal government of Ottawa was not approved.
“It’s not like I’m making up a change,” Higgs said.
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“We really are…. Examining options on how we can follow the federal formula while protecting consumers across the province. “
Higgs acknowledged that further cuts in excise tax would not be in line with federal carbon tax, which Ottawa says is designed to change behavior by adding the real cost of carbon to goods.
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“If we did that routinely they’d say, ‘That wasn’t intentional,’ it was intended for people to realize they’d pay more for fuel, but yes, they could get it back in some the other way around,” Higgs said .
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JP Lewis, associate professor of political science at the University of New Brunswick, says Higgs’ stance on carbon pricing has changed in recent years. Higgs moved to introduce a New Brunswick-made carbon tax following the 2019 general election, noting that the majority of the province voted for parties that support carbon pricing.
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Lewis said the latest move to align the province even more closely with the federal system is the latest piece in that trend.
“Where does it fit with conservative parties in 2021 compared to a few years ago? It seems to be developing, ”said Lewis.
“This could fall into his political realism of looking at this and thinking that this is going nowhere and not worth fighting in court and in the political arena.”
The Higgs provincial government intervened in the Supreme Court’s case against the federal backlash. This legal involvement continued even after the province introduced its own carbon pricing system.
When it comes to the unrecognized carbon tax revenue, green leader David Coon is calling for it to go straight to the Climate Fund.
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“It should go to the climate fund as a large part of it has already been used for the things households and businesses are looking for, such as insulating their houses, putting in a heat pump or adding solar panels or buying an electric vehicle,” said Coon.
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“A large part of it has already been used for atomic energy research.”
Coon refers to the $ 20 million funding for ARC Nuclear, a Saint John-based company that aims to develop small modular nuclear reactors. The $ 5 million that went to the company in the first year of the deal came from the Climate Change Fund.
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Green MLAs have so far criticized the projects funded by the Climate Change Fund, saying that certain things like exchanging culverts are better done by other departments.
Last fiscal year, only $ 25 million of the $ 36 million earmarked for the Climate Change Fund was spent. The rest went back to general revenue.
Steeves said this was due to some project delays in an unusual year, which was also reflected in the December capital budget, and where some spending was deferred.
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