U.S. President Donald Trump’s reported intention to turn his back on the Paris climate agreement has put Prime Minister Justin Trudeau in a tough spot, some critics and observers say.
“This decision really does complicate matters for the Canadian government,” said Ed Fast, the federal Conservative environment critic.
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“The decision by the president to withdraw [from the Paris agreement] makes it exceedingly difficult for the government to ensure Canadian businesses don’t get hurt.”
The agreement signed two years ago in Paris sets targets for reducing greenhouse gas emissions from 2005 levels by 30 per cent by 2030. The agreement, which is non-binding, includes a mechanism to enforce each country’s progress and does not include a broad global emissions target.
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Trump’s move piles onto an already significant list of difficulties for companies in Canada, Fast said in an interview Wednesday.
That list includes higher electricity rates, more regulations and a higher tax burden on account of the imminent carbon price plan, he said.
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Fast, who was international trade minister under the previous government, stressed he is not suggesting Canada follow Trump’s lead and withdraw from the targets set in Paris.
Rather, the Liberal government needs to weigh carefully each policy it rolls out in an effort to combat climate change and take into consideration the effect each could have on businesses, Fast said.
But he’s not holding his breath.
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“I haven’t seen any willingness from the Liberal government to adapt,” he said. “Canadian businesses will pay a huge price … I just don’t know how a Canadian businesses can compete with higher electricity rates, higher taxes and more regulations.”
Dan Woynillowicz, policy director at Clean Energy Canada, though, said it’s not all doom and gloom. Truth be told, he said, the fact the U.S. and Canada are moving in opposite directions, vis-à-vis climate change, opens up a lot of opportunity for Canadians.
“The U.S. is slashing funding for innovation and pulling back support for clean energy exports,” Woynillowicz said in an interview Wednesday.
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That creates a tremendous global opportunity for countries like Canada, who are already leaders in clean and renewable energy development, he said.
Whether specific energy products, software or services, Canadian companies and developers are beginning to take their expertise abroad, Woynillowicz said.
“Plus, the government is supporting their efforts,” he said. ”
“There’s certainly no shortage of entrepreneurs ready to scale up.”
Federal Environment Minister Catherine McKenna’s office declined comment for this article, saying they’ll wait until Trump officially withdraws.
READ MORE: If the U.S. leaves Paris climate deal, Earth could become dangerously warm
This morning, however, as Natural Resources Minister Jim Carr was on his way into a meeting, he indicated Canada will stay on its climate change track.
“We have a national strategy, and we have our own commitments to the Canadian people and to the international community,” he said. “And I see no reason that we shouldn’t honour those commitments.”
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The reason Canada is in a different spot than any of the other countries signed onto Paris is because the countries’ economies are much more integrated than any others, said Ian Lee, associate professor at Carleton University’s Sprott School of Business.
“Because of that close, financial integration, there’s going to be a greater effect if our policies diverge,” he said in an interview Wednesday on Winnipeg’s 680 CJOB.
“I also do not think [Trudeau] wants to walk Canada over the cliff.”
Walking that balance, Lee said, means Trudeau might reiterate his commitment to policies to reducing the effects of climate change, but also slow down the rate at which he implements environmental policies.
READ MORE: Trump tweets he’ll make final decision on Paris climate agreement next week
Echoing Fast’s statements, Lee noted Trudeau is juggling several policies that all can effect businesses in Canada — increasing payroll taxes, provinces driving up minimum wages and the carbon tax, to name a few.
“All of these taken together are bearing down on businesses in Canada and there’s going to be the proverbial straw that breaks the camel’s back,” he said. “If this continues, I think we’re going to see more businesses pack up.”
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