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Canada tries to negotiate carbon price, two provinces unhappy
December 9, 2016 / 9:15 PM / in a year

Canada tries to negotiate carbon price, two provinces unhappy

OTTAWA, Dec 9 (Reuters) - The Canadian government on Friday tried to negotiate a first-ever national carbon price with the country’s 10 provinces, two of which appear increasingly unhappy about the potential financial price.

Liberal Prime Minister Justin Trudeau - who says the price will help Canada meet its international climate change obligations - is promising to impose a carbon price on any province that refuses to sign on.

“It’s a lot of hard work but I‘m an optimist,” Environment Minister Catherine McKenna told reporters during a break in the day-long talks.

Brad Wall, premier of oil- and gas-rich Saskatchewan, complains the price will make Canadian firms less competitive at a time when Donald Trump looks set to adopt policies cutting energy costs when he becomes U.S. president next month.

“I will not be signing any agreement that imposes a carbon tax on Saskatchewan,” Wall said before the meeting.

Under Trudeau’s plan, carbon pollution would cost C$10 ($7.60) a tonne in 2018, rising by C$10 a year until it reaches C$50 in 2022. The provinces can either implement a carbon tax or a cap-and-trade market.

Trudeau is broadly aligned politically with President Barack Obama, who has pushed hard to cut emissions of greenhouse gases. U.S. Vice-President Joe Biden told the meeting he doubted whether Trump could undo much of the administration’s policies since many of them had taken firm hold.

Imposing a price on Saskatchewan could be a political challenge for Trudeau, who came to power in November 2015 promising to improve the sometime fractious relationship between Ottawa and the provinces.

Canadian federal officials who had predicted tough talks with Wall seemed taken aback when Christy Clark, premier of the Pacific province of British Columbia, said she was concerned a carbon price could hit some provinces harder than others.

“British Columbia wants a deal. We want a pan-Canadian carbon price but we want it to be a fair one,” she said. Clark is concerned the two measures on offer - a carbon tax or a cap-and-trade market - could impose unequal burdens.

A British Columbia official said one compromise could be for the province to sign the deal as an observer, leaving details to be worked out later.

$1=$1.32 Canadian Reporting by David Ljunggren

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