Citing competitiveness pressures, feds ease carbon tax thresholds

Bowing to concerns about international competitiveness, the Trudeau government is scaling back carbon pricing guidelines for some of the country's heaviest energy users, and signalling that more easing could come before the plan takes effect in 2019.

Environment and Climate Change Canada has issued new guidelines that increase the emissions threshold at which polluters will have to pay a carbon tax.

The revisions come as big industries face competitive threats from south of the border in the form of corporate tax cuts and protectionist tariffs, and as Ottawa prepares to replace Ontario's cap-and-trade system with its own carbon levy.

The environment department says climate pricing remains a key component of its greenhouse gas reduction strategy.

But after meeting with industry stakeholders, it determined that four industries in particular, cement, iron and steel, lime and nitrogen fertilizer producers, face a high competitive risk and will have their carbon price thresholds adjusted.

Draft regulations issued in January indicated a benchmark for when industries would start to pay the carbon tax at 70 per cent of average emissions.