Ottawa eases carbon tax load for big emitters

Ontario launching constitutional challenge of federal carbon tax plan

'Cancel your carbon tax,' Ontario PC ministers tell Justin Trudeau

The Ontario government says it will be moving forward with a constitutional challenge to a federal plan to impose a carbon tax on provinces that don't have their own carbon pricing system.

"Really, what I've encouraged the federal government and the prime minister to do is go the rest of the way: remove this tax you've imposed with no mandate", Moe said Thursday on Gormley.

But those reductions weren't enough to sway opponents. Companies that emit less than the majority of their peers will effectively pay no carbon tax and, given the subsidies, earn credits for having lower-than-average emissions.

Keith Stewart of Greenpeace decried what he called "a step back" and said Canada could not claim to be a leader on fighting climate change if it were not prepared to take significant steps to reduce greenhouse gas emissions.

"For two years now the federal government has been saying that this made-in-Ottawa carbon-tax scheme does not have nay effect on the economy, and it turns out it does, and there's an admission of that today with the watering down of this flawed policy of carbon taxation".

Attorney General Caroline Mulroney and Environment Minister Rod Phillips were expected to announce details about Ontario's PC government cancelling the cap-and-trade program - the costs of which are still unclear - but instead used the news conference to attack the federal carbon tax that could replace it.

Mulroney said the province is already working with Saskatchewan to fight the imposition of a carbon tax, and said a court challenge will be filed at the Ontario Court of Appeal as well.

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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 carbon pricing system will apply on January 1, 2019 in each province or territory that requests it, and in any jurisdiction that does not have a carbon pricing system that meets the federal benchmark, officials said.

"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.

Mr. Elgie said that it's unlikely that any firm would be able to drop their emissions by 30 per cent in the next few years, as was originally demanded in the original carbon-tax plan.

Industry response on Wednesday to Ottawa's move was muted.

The oil and gas business was not included on the special treatment list.

"It seems to be politics driving the policy rather than economics or the environmental outcome", Mr. McMillan said.

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