Time is running out for the Nova Scotia government to decide on a revised carbon plan, according to the federal environment minister.
At a press conference in Halifax on Thursday, Steven Guilbeault said in order to meet new federal requirements on pricing carbon by next year, the province will have to make a decision "in the coming weeks."
"If we want everything to be in place by 2023, it takes a bit of time for the system to be established," he said.
Since 2019, Nova Scotia has used its own cap-and-trade system. The program avoided massive increases in fuel prices, but there's concern that participants won't be able to sustain the new regulations.
The province has three options: continue with cap and trade, implement a carbon tax or use a hybrid of the two systems.
In the press conference Thursday, provincial Environment Minister Tim Halman said he won't completely rule out the possibility of a federal carbon tax, or backstop.
"We're not saying never to the federal backstop. What we're saying is at this present moment with very high inflation, it's going to prove to be very challenging for Nova Scotians," Halman said.
On July 5, Halman wrote a letter to Guilbeault asking for flexibility in imposing the federal carbon tax backstop if Nova Scotia fails to come up with a plan in time.
He said he was worried about lower income and rural Nova Scotians being hurt by higher gas prices. With a federal carbon tax, Halman wrote, gas prices could increase by more than 14 cents per litre by next year.
Guilbeault said earlier this month that he was disappointed in the province's attempt to "stall" with the letter. He also noted that many provinces have been able to return money to residents with revenue from the tax.
Halman and Guilbeault will meet Premier Tim Houston on Thursday to discuss the plan.
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