The Irving Oil refinery — New Brunswick’s largest business — could end up mostly exempt or even profiting from the federal government’s national carbon tax plan, according to new details released Thursday.
Federal Environment Minister Catherine McKenna announced Ottawa will be copying an element in Alberta’s carbon tax system called “output-based pricing,” meant to shield companies that would be made uncompetitive by a high tax on greenhouse gas (GHG) emissions.
“We have spent a lot of time talking to businesses across the country to develop a plan that recognizes the need to be competitive,” said Mckenna at a press event about the federal government’s plan.
“Companies that are performing well with respect to other companies will not have to pay.”
Under output-based pricing, manufacturers will be given carbon emission allowances and will only have to pay a tax on greenhouse gas emissions above that threshold. If a manufacturer’s emissions are kept below the allowance, it will be issued credits it can use later or sell to other polluters.
According to information released Thursday, carbon allowances for businesses will be set industry by industry with groups of manufacturers — such as oil refineries — competing against one another to generate the most output with the fewest emissions.
The Irving Oil refinery is New Brunswick’s largest single source of greenhouse gases, emitting 2.97 million tonnes of greenhouse gas in 2015.
There was concern that a national carbon tax starting at $10 per tonne next year and rising to $50 per tonne by 2022 could undercut the refinery’s competitiveness. It exports 80 per cent of its production to the United States in competition with American refineries that do not face a similar tax.
Last October, when the idea of a national carbon tax was first announced,…