Politics Briefing: Trudeau’s carbon-tax fight is getting more complicated

Good morning. With official Ottawa winding down for the holidays, we thought we’d take this week to reflect back on the stories that shaped the year in politics. We asked some of the reporters in The Globe’s Ottawa bureau what stories they covered that had the biggest impact. Today, energy reporter Shawn McCarthy looks at one of the most contentious political debates of the year: carbon pricing.

Prime Minister Justin Trudeau’s road to a national carbon tax developed more potholes in 2018 than an Ottawa street after a long winter of frequent freeze and thaw.

After promising such a levy in the 2015 election campaign, the Liberal government included its carbon tax in the 2018 budget and passed legislation to implement it in June. The plan – dubbed a “backstop” by Ottawa – imposes the tax in any province that does not have its own carbon levy – either through a direct tax or cap-and-trade system.

Heading into 2018, Mr. Trudeau had only to contend with Saskatchewan as an outright opponent of the carbon tax. But the national consensus quickly fell apart over the course of the year, amid a rancorous political debate about the fairness and economic impacts of carbon pricing.

Ontario dropped out first. After winning power in June, Premier Doug Ford killed the provincial cap-and-trade program and joined Saskatchewan in challenging the federal plan in court. Conservative premiers in Manitoba and New Brunswick also backed off plans to adopt a carbon tax, forcing Ottawa to extend its backstop to those provinces along with Saskatchewan and Ontario.

Reacting to setbacks in plans to expand crude export capacity, Alberta Premier Rachel Notley froze her province’s carbon levy, putting it offside with Ottawa’s plan to raise the price to $50 a tonne in 2022. For now, the federal levy won’t apply in Alberta because the provincial tax remains higher than Ottawa’s $20 per tonne initial level, but that situation may not last beyond the scheduled spring election.

Ms. Notley’s rival, United Conservative Party Leader Jason Kenney, has a sizable lead in polls and is vowing to scrap the NDP carbon tax should he win office.

The prospect of a “Premier Kenney” would potentially be an axle-busting pothole on the road to the Trudeau government’s own re-election bid next October.

This is the daily Politics Briefing newsletter, written by Chris Hannay in Ottawa. It is available exclusively to our digital subscribers. If you’re reading this on the web, subscribers can sign up for the Politics newsletter and more than 20 others on our newsletter signup page. Have any feedback? Let us know what you think.

Editor’s note: We’ll be on hiatus for a few days…

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