Carbon Pricing Policy
- Is fair and technically achievable (not punitive);
- Addresses the competitiveness risks. The auto industry is at a significant risk of carbon leakage and is highly trade exposed – it exports 90% plus of what it builds in Canada
- Provides certainty on the use of revenues paid. The revenue generated under the Output Based Pricing System (OBPS) must be appropriately “recycled” back to the company from which it was collected. Every dollar paid under the federal carbon pricing regime must be recycled back to the originating company (or source facilities) to reinvest in innovation and emission reduction and energy conservation projects.
If fees paid out do not equal revenues returned, the difference is simply a tax – a tax which competing plants in other jurisdictions do not have to pay. As consequence, the competitiveness of the vehicle manufacturing sector in Canada is undermined and the chances for carbon leakage are higher.