To achieve net-zero emissions by 2050, many countries are looking for ways to mitigate their current environmental issues. Some have implemented environmental protection laws and policies, and some have used finance to promote the development of new energy and new technologies. Yet, according to the International Monetary Fund, raising the price of carbon is the most effective and efficient way to fight global warming and reduce air pollution. This is also what the P.E.I government plans to implement in July.
The P.E.I. government announced a federal carbon tax of 4.4 cents per litre to go into effect on April 1. The government hopes to reduce people’s reliance on driving by raising carbon prices. Meanwhile, revenue gained from the carbon levy will then be distributed among government programs and returned to Islanders in the form of tax rebate cheques. They mentioned that for those earning less than $50,000 a year, there will be a $140 rebate check in July. However, it depends on income, so the higher the annual income of Islanders, the less rebate they will receive from the carbon levy.
Despite the substantial increase in the carbon levy, there are still some industries exempt from the increased carbon tax. On March 25th, 2022, Steven Myers, Minister of Environment, Energy and Climate Action, stated that after almost two years of negotiations with the federal government, exemptions to the additional carbon pricing will remain for farmers and fishermen. Home heating fuels like furnace oil and propane will also be exempt. The P.E.I. government hopes the increased carbon tax will not burden these industries and affect their productivity.
The province expects to receive $31.1 million from the carbon tax in 1 year, while about $8.2 million will go towards rebate checks paid to Islanders, and another $13.2 million will offset the provincial gasoline excise tax cut. However, the Greens do not fully agree with the plan and hope more improvements can be made to benefit Islanders and the environment.
During question period on March 25th, 2022, Peter Bevan-Baker, opposition leader and the leader of the Green Party of P.E.I., mentioned that his party supports the schemes, but wondered why they have to be funded by carbon tax revenues. Also, they would like to strive for the full refund of the $31.6 million from the carbon tax in the next fiscal year. Especially for low-income households, getting more rebates from the carbon tax can definitely make a difference in their lives. To conclude, they are calling to have a federal carbon pricing scheme similar to those in Alberta, Ontario and Saskatchewan, where at least 90% of the carbon tax revenue is returned to the locals.