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).
For more details, read the 2016 Alternative Federal Budget issued by the Canadian Center for Policy Alternatives.