Mr. Speaker, the question that prompts this evening's adjournment debate was whether the government would enact a carbon tariff. The context for this question is that the federal government has enacted a national price on carbon. One of the main concerns about a national carbon price is that it could prompt carbon-intensive industries to relocate to other countries that do not put a price on emissions. That would increase global emissions while eliminating Canadian jobs. Adjusting our carbon pricing at the border with a carbon tariff on imports and a rebate on exports would safeguard Canadian jobs while ensuring that our carbon pricing actually helps to reduce global emissions. I think this concept of carbon border adjustments can be illustrated with the help of an example.
Producing a tonne of steel in China and shipping it here emits about five times as much carbon as manufacturing it at the EVRAZ mill in Regina. However, if we just put a price on Canadian emissions, that would tend to increase the price of Regina-made steel, creating an incentive for consumers to instead use dirtier steel from China. This would eliminate Canadian jobs and actually increase global emissions.
By comparison, if we had a national carbon price with a corresponding carbon tariff, it would increase the price of steel imports from China by more than it would increase the price of Regina-made steel. This would create an environmentally appropriate incentive for Canadians to buy local. In a nutshell, that is what is being proposed with a carbon tariff.
The government certainly recognizes that there is a challenge with competitiveness, and what the government has proposed instead of adjusting carbon pricing at the border, is to basically rebate between 80% and 90% of carbon tax revenues directly to the large emitters. The government is essentially on board with the idea of some sort of rebate to large emitters and wants to base it on their output rather than on the amount that they export. The government is prepared to undertake this huge cost, which will come at the expense of the consumer rebates that the government has proposed to try to make carbon pricing more palatable.
What I feel the government is missing out on is the potential to collect its carbon price on the carbon content of imports from countries that do not price emissions. This carbon tariff would help to ensure a level playing field, as I have described, but it would also collect revenues to help offset the cost of whatever funds are rebated to industry, either through the government's existing output-based rebates or through an export rebate as I have proposed.
By fully adjusting Canada's carbon price at the border, including a carbon tariff on imports, the government could help to protect Canadian jobs, help to reduce global emissions and also collect more revenue to fund greater rebates to all Canadians.