The provinces and territories are vital to Canada achieving its climate change objectives. While the Federal Government signed the Kyoto Protocol, the provinces are responsible for delivering the climate change programs as they have jurisdiction over the natural resources, including oil and gas as well as electricity management within their provinces. Canada’s electricity and oil and gas sectors are responsible for the largest increase in GHG emissions since 1990. In addition, the provinces have jurisdiction over Canada’s municipalities where much of the emissions reductions will have to happen. Each of the provinces has different issues and strategies surrounding climate change. Ontario, Quebec and British Columbia are examined below.
Ontario comprises 39% of Canada’s total population and produces 39% of Canada’s gross domestic product, but generates 28 percent of the total national GHG emissions. With a large manufacturing and industrial base, with a significant fast-growing urban population, along with coal fired electricity generation, Ontario has numerous challenges in developing a climate change plan. The target that Ontario has set is to reduce GHG emissions to 6 percent below 1990 levels by 2014, an overall reduction of 61 megatonnes. The 2020 target is to reduce emissions by 15% from 1990 levels and 80 percent below 1990 levels by 2050.
The Go Green: Ontario’s Action Plan on Climate Change encompasses five action plans:
- Reduction Targets – targets have been set for the short, medium and long term (mid-century). New regulations, conservation, a phase out of coal fired power plants, and more renewable energy are part of the action plan. The plan also includes rebates for energy audits and retail sales tax breaks for purchase of energy efficient products.
- Transit Investment – a significant transit investment of $17.5 billion with 52 rapid transit projects within the GTA and Golden Horseshoe.
- Jobs Fund – a major program to secure the next generation of high paying jobs by supporting commercial development, use and sale of clean technologies in Ontario
- Green Power – incentive to help homeowners fight climate change, conserve energy and adopt green technologies and a standard offer for clean energy to enable power users to improve efficiency through cogeneration.
- Grow Green – encouraging more sustainable, energy efficient and transit friendly communities. The plan also includes planting of 50 million new trees, maintaining open spaces and greenbelts as well as promoting locally grown food.
Ontario is also encouraging the Federal government to introduce a national emissions trading system compatible with other markets with caps on emissions and real reductions over time using the 1990 baseline used by the majority of the international community. The plan also includes encouraging and working with municipalities to reduce their GHG emissions. The largest single reduction will be the shutdown of the five coal fired power generating plants by 2014. The plan is to phase out coal plants by a mix of energy from clean, renewable sources such as hydro, biomass, wind and solar, as well as energy conservation.
Numerous actions have been tabled for the transportation sector. The rapid transit initiative is the single largest transportation project with over 902 kilometres of rapid transit removing an estimated 300 million car trips. This initiative is planned for the Greater Toronto Area and Golden Horseshoe.
The Ontario Green Commercial Vehicle Program was announced on November 28th, 2008. The purpose of the program is to encourage Ontario based businesses to switch to environmentally friendly technologies that reduce GHG emissions. A grant of up to $2000.00 is available for Class 3 to Class 7 dedicated alternative fuel vehicles equipped with dedicated propane engines. Eligible applicants are private sector Ontario based enterprises with a satisfactory CVOR and applicants must enter into a formal agreement with the Ministry of Transportation.
Alternative transportation fuels in Ontario are incented with reductions in road taxes in relation to conventional gasoline and diesel fuels. Ethanol use is mandated as an annual average 5.0% blend in gasoline. The road tax rates are as follows:
- Gasoline - 14.7 cents per litre
- Ethanol - 14.7 cents per litre
- Diesel - 14.3 cents per litre
- Propane - 4.3 cents per litre
- Biodiesel - 0.0 cents per litre
- Natural gas - 0.0 cents per litre
- Methanol - 0.0 cents per litre
The propane industry in Ontario has supported the alternative fuel initiatives by the Ontario government and in a recent presentation to the Standing Committee on Finance and Economic Affairs, encouraged the government to continue alternative fuels programs, support fuel neutrality, allow alternative fuel vehicles in high occupancy vehicle lanes, encourage the use of alternative fuel vehicles in the provincial and municipal fleets and to ensure propane with its low carbon footprint is part of the Ontario governments clean and green programs.
The Quebec climate change plan is entitled Québec and Climate Change - A Challenge for the Future. Quebec has been a long time supporter of the Kyoto Protocol and over the years has adopted five motions unanimously supported by Quebec’s National Assembly to take actions to fight climate change in Quebec. Quebec has the lowest per capital GHG emissions output in Canada as there is minimal oil and gas activity and electricity is generated by hydro. The transportation and industrial sectors generate close to 70% of the GHG emissions in Quebec. Quebec was one of the first provinces to table a green house gas emissions reductions plan and has aggressively pursued GHG emissions reductions initiatives in the province from imposing a carbon tax to adopting more stringent (California) vehicle emissions standards.
GHG emissions in Quebec in 1990 were 85.3 megatonnes, increased to 90.9 megatonnes in 2003 and without actions are projected to be 94.0 megatonnes in 2012. The effort provided by Quebec’s action plan would reduce GHG emissions by 10.0 megatonnes, which represents a 1.5% reduction from 1990 levels. To achieve a 6% reduction under 1990 levels to meet the Kyoto Protocol commitments would require another 3.8 megatonnes of GHG reductions.
Quebec was the first to introduce levies (carbon tax) applied to GHG emitting businesses and industries in the energy sector. The levies are calculated by Régie de l’énergie prorated to CO2 equivalent emissions by energy type with a polluter pays principle. The levies are relatively modest and are paid into the MDDEP’s Green Fund to finance the plan’s actions with estimated revenues from the levies of $200 million per year.
The plan seeks to reduce fuel consumption and improve the energy efficiency of public and private buildings with financing and incentive programs as well as legislative changes to building codes. The transportation sector is being addressed with a public transportation policy reducing passenger vehicle kilometres, alternative transportation of persons, more stringent vehicle emissions standards (similar to California) and programs to improve the transportation of merchandise including speed limiters and implementation of intermodal projects.
The plan addresses the industrial and residual materials sector with specific strategies targeted for the aluminium, chemical, petrochemical and residual materials activities. Other sectors with less impact are also addressed including agriculture, consumers (public awareness) and research, development and deployment of new technologies as well as the government showing leadership in its activities.
Propane, with its lower carbon footprint is well positioned to assist Quebec in reducing GHG emissions in the transportation sector. The carbon tax for propane is lower than that of other transportation fuels:
- Gasoline - 0.80 cents per litre
- Diesel - 0.90 cents per litre
- Propane - 0.50 cents per litre
Fuel taxes form a significant component of fuel costs to end users in Quebec which has among the highest fuel taxes in the Canada. Alternative fuels in Quebec (propane, natural gas, hydrogen) enjoy reduced fuel taxes compared to the conventional fuels:
- Gasoline - 15.2 cents per litre
- Diesel - 16.2 cents per litre
- Propane - 0.0 cents per litre
- Natural gas - 0.0 cents per litre
In addition, all fuels are subject to the 7.5% Quebec Retail Sales Tax. Fuel taxes are reduced by varying amounts within 20 kilometres of provincial and US borders and in designated remote areas. In Montreal and surrounding municipalities an urban tax of 1.5 cents per litre is added to gasoline. At the present time there are no incentives for fuel efficient vehicles, hybrid electric vehicles or alternative fuel vehicles.
British Columbia has the third lowest greenhouse gas emissions per capita in Canada although the economy is resource based – forestry, mining, energy, and agriculture. Total GHG emissions in British Columbia rose about 30% between 1990 and 2004, in line with the increasing population. Greenhouse gas emissions per capita have remained about the same since the 1990’s. The province has made significant investments in clean energy, transportation, communities and forest management.
British Columbia was the first to develop a Climate Change Plan which was issued in 2004. The key elements in that plan are:
- 50% of all new electricity to be clean. Sixteen independent power project agreements have been signed to produce energy from hydro, landfill gas and wind energy
- BC Hydro is a world leader in encouraging energy conservation and efficiency
- BC is a leader in hydrogen and fuel cell technology
- Promoting alternative transport with the construction of a rapid transit line from Richmond to Vancouver
- Facilitating the efficient movement of people and goods, the government is improving eight highways leading to the border
- BC plants more than 200 million trees annually, since inception the reforestation program has planted over 5 billion seedlings.
The long term plan includes 40 action items targeted at five main sectors:
- Sustainable energy production and efficient use
- Efficient Infrastructure: Transportation, Buildings and Communities
- Sustainable Forest and Carbon Sink Management
- Government Leadership and Outreach
- Water Management.
The provincial government has committed to an Energy Plan that includes zero GHG emissions from coal fired electricity generation, no nuclear power, best coalbed gas practices in North America and eliminate all routine flaring at oil and gas wells and production facilities by 2016.
In February 2008, the BC government announced legislation that would impose a broadly-based carbon tax on the purchase and use of fossil fuels in British Columbia. The proposed carbon tax is intended to be revenue neutral with revenues from the carbon tax returned to taxpayers through reductions in other provincial taxes. The proposed implementation date is July 1, 2008.
The proposed tax rates, effective July 1, 2008, are based on $10.00 per tonne of carbon dioxide equivalent emissions from the combustion of each fuel. The tax rates will increase annually:
- July 1, 2009 - $15.00 per tonne of CO2 equivalent emissions
- July 1, 2010 - $20.00 per tonne of CO2 equivalent emissions
- July 1, 2011 - $25.00 per tonne of CO2 equivalent emissions
- July 1, 2012 - $30.00 per tonne of CO2 equivalent emissions
The tax rates will vary for each type of fuel depending upon the amount of CO2 equivalent released as a result of its combustion. Lower carbon footprint fuels such as propane and natural gas would be taxed at lower rates. Based on $10.00 per tonne the following rates apply to various fuels
- Gasoline - 2.41 cents per litre
- Diesel - 2.76 cents per litre
- Fuel Oil - 2.76 cents per litre
- Propane - 1.53 cents per litre
- Natural gas - 49.88 cents per GJ
Tax would be collected similar the existing motor fuels tax. Biofuels such as biodiesel, ethanol and biomass would not be subject to the carbon tax.
Motor fuel tax concessions are provided in British Columbia to encourage development of cleaner and more environmentally friendly vehicle fuels. The reductions are significant when compared to conventional fuels, particularly in the lower mainland (Vancouver) to :
- Gasoline - 14.5 cents per litre
- Diesel - 15.0 cents per litre
- Propane - 2.7 cents per litre
- Natural gas - 0.0 cents per litre
- Methanol - 0.0 cents per litre (minimum 85% methanol)
- Ethanol - 0.0 cents per litre (minimum 85% ethanol)
- Biodiesel - 0.0 cents per litre (proportional to % biodiesel)
In Greater Vancouver and Victoria areas there are additional transportation taxes of 6.0 cents per litre for gasoline and diesel (Vancouver area) and 2.5 cents per litre for gasoline and diesel (Victoria area).
Fuel efficient vehicles, hybrid electric vehicle and alternative fuel vehicles (electricity, ethanol, methanol, natural gas, hydrogen fuel cell or propane) are eligible for Provincial Sales Tax (PST) reduction dependent upon the type of vehicle subject to the maximums below:
- Hydrogen fuel cell buses - $10,000
- Electric motorcycle/scooters - $1,000
- Hybrid electric vehicles - $1,000
- Alternative fuel shuttle buses - $5,000
- Alternative fuel passenger buses - $10,000
- All other alternative fuel vehicles - $1,000
The tax collectible is reduced at the point of sale and the tax rebate programs are slated to be eliminated on March 31, 2011. The purchase of kits to convert motor vehicles and stationary engines to operate on propane or natural gas are exempt from PST. The cost of installation is also PST exempt.
In early April 2008, British Columbia became the first province to legislate cap and trade legislation for GHG emissions. Caps will be established for designated large emitters in the province and offset credits will be developed for approved emissions reduction credits. British Columbia is a member of the Western Climate Initiative, a multi jurisdictional partnership launched in February 2007 that has targeted development of a cap and trade systems by August 2008. Seven US states are part of the Western Climate Initiative along with the province of Manitoba.