Nova Scotia carbon tax would mean higher power bills, researcher says

Nova Scotians should expect to pay hundreds of dollars more per yearfor fuel and electricity if the federal governmentimposes a carbon tax, according to analysis by a DalhousieUniversity energy researcher.

"Carbon pricing is pretty well inevitable. Nova Scotians can expectto see increases in the price of fuel," Larry Hughes said on Thursday.

This weekfederal Environment Minister CatherineMcKenna spokeabout carbon tax and cap-and-trade systems, citingBritish Columbia as an example.

"They have a carbon tax. It's revenue neutral,"McKenna told the House of Commons.

"They give money back to consumers but ...it is a market mechanism that reduces what we don't want, and we don't want carbon pollution."

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B.C. to N.S. comparison

At the request of CBC Nova Scotia, Hughes applied the British Columbiamodel $30 per tonne of carbon dioxideto Nova Scotia.

It would add nearly seven cents per litre to the price of gasoline at the pumps in Nova Scotia, he said. It also would increase electricity bills by 1.8 cents per kilowatt hour and 8.85 cents perlitre to the cost of home heating oil.

Based on household consumption of 3,000 litres of gasoline, 10,000 kWh and 2500 litres of heating oil, that adds up to an annual cost per household of $612 per year.

Hughes said it could make revenue through income tax breaks, but he argued an already weak economy would suffer.

"Our economy is in pretty rough shape as it is already," he said.

Nova Scotia hesitant

The prospect of a carbon taxevenanswering questions about ithas beensomething Nova Scotia Premier Stephen McNeil wants to avoid.

He and his environment minister continued to hold out hope Thursday that Nova Scotia will be spared from carbon pricing imposed by Ottawa.

"[The federal objective]is to reduce greenhouse gasemissions, and no other province in Canada has done a better job of it than Nova Scotia," McNeil told reporters onThursday after his government's weekly cabinet meeting.

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Pollution reduction

Nova Scotia has met the federal government's goal of reducing greenhouse gasemissions by 30 per cent of 2005 levels beforethe2030 deadline.That is ahead of any other province.

Hughes said thatis both by accident and bydesign.

Lower emissions, he said, are the result of reduced output from a faltering economy and the legislated use of expensive renewable energy, such aswind power.

Hughes agreedwith McNeilthat Nova Scotianshave been doing theirpart.

"Nova Scotians have been paying an indirect carbon tax with the rising cost of electricity," Hughes said. "Electricity has risen by 62 per cent since 2005."

Hughes said that argument may not be enough to satisfy Ottawa, although the government has not yet announced its plans.

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Negotiations ongoing

The Nova Scotia government said it continues to negotiate with Ottawa.

Pressed for a position on a carbon tax or carbon trading, McNeil took refuge in the vagueness of the federal government.

"I don't agree that they are asking me to choose. I believe there is an equivalency issue on the table," McNeil said.

"The prime minister has said each province is unique and there [are] different things happening in respective provinces. We are making the case for our province."

The previous Conservative government signed a so-called equivalency agreement with Nova Scotia that exempted Nova Scotia Power from requirements to close coal-fired generating plants in return for further greenhouse gas reductions.

The Liberalgovernment hasnot said whether it will maintain that agreement.

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