The Government of Canada announces approach with Nova Scotia on pricing carbon pollution and coal phase-out equivalency agreement

The governments of Canada and Nova Scotia recognize that the transition to a low-carbon economy is not only essential, but it also represents a significant opportunity for clean economic growth and job creation.

Building on the Government of Canada’s announcement, on October 3, 2016, of a pan-Canadian approach to pricing carbon pollution, Nova Scotia will implement a cap-and-trade system that aligns with Canada’s pan-Canadian approach to pricing carbon pollution. Nova Scotia will also adopt a province-wide target that meets or exceeds Canada’s target of reducing emissions by 30 percent, from 2005 levels, by 2030.

The Government of Canada has also announced plans to accelerate the phase-out of traditional coal-fired electricity units. ‎This plan will involve accelerating the timelines in the existing regulations under the Canadian Environmental Protection Act, 1999 (CEPA). Nova Scotia is expressing an interest in entering into an equivalency agreement, under section 10 of CEPA, for these new requirements.

Equivalency agreements under CEPA are intended to avoid regulatory duplication. The Minister may enter into an equivalency agreement with a province, territory, or Aboriginal government, with an approach that will deliver equivalent or better outcomes than the federal regulations.

An equivalency agreement already exists between the Government of Canada and Nova Scotia that recognizes that Nova Scotia’s Environment Act and its Greenhouse Gas Emissions Regulations are equivalent to the current CEPA regulations relating to coal-fired electricity generation. We are committed to working with the province of Nova Scotia to negotiate a new equivalency agreement on the accelerated coal phase-out.

Pricing carbon pollution will give Canada an edge in building a clean-growth economy, will make Canadian businesses more innovative and competitive, will bring new and exciting job prospects for middle-class Canadians, and will reduce the pollution that threatens our clean air and oceans as well as the health of Canadians.

Under the Government’s pan-Canadian approach to pricing carbon pollution, provinces and territories have a choice in how to implement carbon pricing: they can put a direct price on carbon pollution or they can adopt a cap-and-trade system, as Nova Scotia has decided to do. Province and territories will retain all of the revenue from pricing systems to use as they see fit, whether it is to give it back to consumers, to support their workers and their families, to help vulnerable groups and communities, or to support businesses that innovate and create good jobs for the future.

Nova Scotia’s cap-and-trade system will place declining caps on emissions from its electricity sector and from other sources of carbon-fuel combustion. It will provide for trading of emission reductions within the province, allowing emitters to reduce emissions at the least cost and ensuring that all revenues from the system remain within the province.

The pricing of carbon pollution will be complemented by other measures as part of the pan-Canadian framework on clean growth and climate change that Canada is developing collaboratively with provinces and territories, and with Indigenous peoples, with the input of businesses, stakeholders, and Canadians.