Written by Mike Barrett

The federal government, along with most of the premiers, signed a new pan-Canadian framework (the "Federal GHG Framework") on Friday, December 9, 2016.  The Federal GHG Framework is intended to address climate change on a national platform.  The federal government's approach to meeting its 2030 target of a 30-percent reduction in greenhouse gas ("GHG") emissions below 2005 levels is to ensure the provinces and territories have sufficient flexibility to design their own programs while being supported federally through infrastructure spending, clean technology investments and targeted GHG reduction opportunities.

The Federal GHG Framework builds on already-announced measures and includes the following:

• all provinces and territories shall have carbon pricing in some form by 2018;
• provinces and territories can implement a carbon tax/carbon levy or a cap-and-trade system;
• each jurisdiction can choose to provide that all program revenues are to remain in the applicable jurisdiction;
• systems featuring a carbon tax/carbon levy shall have a $10/GHG tonne floor in 2018 rising by $10/GHG tonne per year to $50/GHG tonne by 2022;
• systems featuring a cap-and-trade program shall feature a declining cap to at least 2022 which mirrors the projected GHG emission reductions of carbon tax/carbon levy systems and shall result in aggregate GHG emission reduction outcomes by 2030 that line up with the federal plan; and
• each jurisdiction will provide regular, transparent and verifiable reports on the outcomes of their particular system.

Each province and territory also commits to focus on:

• developing new building codes to ensure that buildings use less energy;
• deploying more electric charging stations to support zero-emitting vehicles; and
• expanding clean electricity systems, promoting inter-ties, and using smart-grid technologies to phase out the reliance on coal, make more efficient use of existing power supplies, and ensure a greater use of renewable energy.

Saskatchewan and Manitoba have not signed the Federal GHG Framework. Saskatchewan Premier Brad Wall has consistently refused any form of carbon pricing and points to the imminent arrival of President-elect Donald Trump as a key concern. Trump's campaign featured promises to scrap many of the GHG emission reduction initiatives implemented by President Barack Obama and has appointed a person many believe is a climate change skeptic to head the Environmental Protection Agency. Wall cites the expected lack of GHG emission reduction legislation south of the border for why Canada should be rethinking its position. Manitoba Premier Brian Pallister linked the federal government's health care funding commitment to Manitoba with his willingness to sign the Federal GHG Framework.

If you have any questions concerning the impact the Federal GHG Framework may have on your business, we would be pleased to discuss them with you.