It is time to introduce a progressive national carbon tax. The tax would be harmonized with provincial carbon taxes, or “carbon prices,” where they exist in order to ensure a minimum rising threshold that would sent strong price signal to businesses and households. We need to ensure a broad-based carbon tax is in effect in all provinces and territories starting at a minimum rate of $30 per tonne of CO2 emissions on January 1, 2017. This rate would rise by $5 per tonne, per year until it reaches $50 per tonne in 2021.
A substantial share of the the revenues from a carbon tax would go to a “green” tax refund to ensure a majority of Canadian households are better off after accounting for increased costs as a result of the carbon tax. This would amount to an annual cheque equivalent to $10 for every adult and $5 per child for every $1 per tonne in carbon tax (e.g., $300 per child for a carbon tax of $30 per tonne).
The remainder of the revenues would go to complementary investments in climate change mitigation and adaptation, including for renewable energy, energy efficiency, public transit, retrofits for low-income housing , and transition measures for the most affected workers and communities. The carbon tax would also include border tax adjustments to ensure Canadian industry is not put at a competitive disadvantage, and to put more pressure on other countries to also introduce similar measures (with exemptions for impoverished nations).