CHARLOTTETOWN, P.E.I. — Premier Dennis King is expecting the federal government to take a harder line on negotiations on the next round of carbon pricing and said home heating fuel and propane in P.E.I. will not be exempt after the fall.
King also said the new agreement would not likely be completed before September. The current carbon pricing agreement between Ottawa and the provinces expires at the end of March, but King said this would likely be extended until then.
King was questioned about the state of the negotiations by Liberal MLA Heath MacDonald during question period in the P.E.I. legislature on Friday.
“Last December, the premier said the following: ‘Islanders need to have an idea of where we are going. So, my indication would be before we get to signing an agreement, that we would share where we are at to get some input.’
“Would the premier please share where we are going?” said MacDonald.
"The federal government is adamant and insistent on increasing the carbon pricing model in Prince Edward Island,” King said in response.
“In the past, home heating fuel and propane (was exempt), Mr. Speaker. That will not be an option this time."
In 2018, the previous government of Liberal Premier Wade MacLauchlan had negotiated the first carbon pricing agreement with the federal government, which had exempted not only home heating fuel but also marked fuels, which are used in the agriculture or fisheries sectors.
Three years later, it remains unclear if the marked fuels exemption will be carried forward after the current carbon pricing agreement expires. In December, the federal government announced it would increase the price on carbon from $30 per tonne to $170 per tonne in 2030.
The federal government estimates the carbon pricing will account for the majority of reductions in emissions greenhouse gases needed to meet its commitment under the Paris Climate Agreement.
“From a federal perspective, they seem very less likely to want to do some carve-outs or exemptions. So, they're working more to be consistent across the board," King said.
"We're trying to get the best deal we can for P.E.I. and we're going to continue to do that."
The MacLauchlan government had allowed the federal carbon pricing framework to be imposed but had effectively scaled back the cost to consumers to one cent per litre in 2018 by cutting provincial excise taxes on gasoline.
At the time, Green Party Leader Peter Bevan-Baker had suggested this approach would not encourage Islanders to use less carbon-intensive modes of transportation.
On Friday, King said a rebate model, in which Islanders would receive a cheque from the government by year-end based on their income, would likely be put in place.
But he did not rule out the possibility of reducing provincial excise taxes.
"That continues to be a negotiation for us,” King said.
“We have to continue, of course, to figure out some of the very delicate details of this as we move forward."
Stu Neatby is the political reporter for The Guardian. [email protected] @stu_neatby
