Sask. argues carbon tax fight is 'fundamentally' about the nature of federalism

Canada updates its carbon emissions tax policy

Citing competitiveness pressures, feds ease carbon tax thresholds

Manufacturers of steel, iron, lime, cement and nitrogen fertilizer will now have to pay the carbon price only on emissions that exceed 90 per cent of the average emissions in their sector.

The government had initially planned to tax companies for emissions over 70 per cent of an industrial sector's average pollution intensity, but is easing the limit in most sectors to allow for emissions up to 80 per cent of the industrial average.

That plan is scheduled to come into effect in early 2019, and will be imposed on provinces that do not have a carbon pricing system of their own.

"But it's already on trial among the families who will be forced to pay more for gas, home heating and everything else if the federal government gets its way", said Mulroney, who previously supported a plan to tax carbon emissions under former Progressive Conservative leader Patrick Brown.

Canada's Environment Minister, Catherine McKenna, said the decision to soften the proposed plan was made after discussions with experts who pointed out that competitiveness could be hurt.

The Liberal government said the changed guidelines were aimed at addressing concerns among industries that are at a high risk of suffering from foreign competition.

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Because the law is not being applied to all province's and territories, just those that don't put in their own carbon tax, the factum argues the law "is constitutionally illegitimate".

The federal environment minister says her first meeting with her Ontario counterpart has led her to the conclusion that the province does not seem to have a plan to fight climate change.

The government says the plan all along was to set an initial target and then amend it after more specific review, and that the changes made will not have a material impact on the amount of greenhouse gases that will be cut from Canada's total annual emissions.

The change only reduced the amount that heavy emitters or large corporations have to pay on emissions, but did nothing for Canadian households, said Moe. They've argued the USA tax changes could end up inflicting more damage on the Canadian economy than would the possible termination of North American Free Trade Agreement.

A spokeswoman for Morneau said if he is to make any adjustments, they would be announced in his fall economic statement.

"We are certainly in favour of putting a price on carbon, we favour that, we think it's the right direction, we think it does on the long term bring the right behaviour to try to reduce GHG emissions", he said.

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