What's at stake as Canada's industrial carbon pricing rules face political headwinds
CBC
Cabot Canada has been making carbon black, a powdery chemical used mainly in reinforcing rubber, in Sarnia, Ont., for 72 years.
It takes a lot of energy — in the form of burning natural gas — and that's meant the company has had to pay for its carbon emissions, under Canada's industrial carbon pricing rules.
This week, they won a $5.6 million grant from the federal government to install new equipment that would slash their carbon footprint.
The money comes from a fund created from the proceeds of the industrial carbon pricing system, which put a price on the carbon emissions of major industries. (In Ontario, the program started as a federally-run operation, then switched in 2022 to Ontario's own provincially-run pricing system that works in a similar way.)
"We're very happy to see that they have these funding programs available," said Dean Pearson, president and facility general manager of Cabot Canada, which will use the money on new technology to reuse the heat energy produced in its manufacturing process. The recycled energy will be used to heat its buildings and facilities, lowering the plant's use of gas.
Along with Cabot, the federal government announced funding for a range of projects this week from $662,000 for retrofitting a dryer at McCain Foods in Carberry, Man., to $25 million for Redpath Sugar in Toronto to reduce energy use in its sugar refining plant.
It's a snapshot of what could be at risk if industrial carbon pricing was cancelled, something Pierre Poilievre's Conservatives have promised to do at the federal level on the campaign trail. The announcement last week drew concerns from climate policy experts who are worried how the uncertainty will impact companies across Canada.
The industrial carbon price has been a key part of the Liberal government's plan to tackle climate change, giving economic incentives to reduce emissions — by both carrot and stick.
Large-scale emitters have thresholds for how carbon-intensive their operations can be. Those that exceed it have to pay. Those that produce less carbon pollution than allowed can profit by having surplus credits to sell.
Currently, the federal government directly administers the pricing system in Manitoba, Prince Edward Island, Nunavut and Yukon. All other provinces run their own programs, but they need to comply with federal standards on the price put on companies and how the money is used.
An independent analysis last year found it the most effective part of the government's policies to lower emissions in Canada, and industrial voices were publicly supporting it — until recently.
The Conservatives say they would remove the federal requirement, leaving it to provinces to run their own pricing systems if they choose, and expand federal tax credits aimed at clean technology and manufacturing.
Mark Carney, the Liberal leader, has said he would maintain and improve the industrial carbon pricing system, but has not detailed any proposed changes to it.
Since Poilievre's announcement, Saskatchewan Premier Scott Moe announced Thursday that he will pause his province's industrial carbon pricing system April 1.
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