Canada Says It’s Open to Carbon Tariffs Amid Global Climate Push

Canadian Prime Minister Justin Trudeau’s government is examining the merits of carbon tariffs, a policy measure to tax goods from countries with weaker climate laws that’s won the support of Boris Johnson.

The U.K. prime minister wants Group of Seven countries to discuss the idea of imposing levies on imported goods made in places that don’t have strong rules about greenhouse gas emissions. Trudeau’s trade chief, Mary Ng, said in an interview Wednesday the Canadian government is “working on” the idea, as part of broader efforts to find areas where economic goals align with climate change objectives.

“One has to look at it,” the minister said of Johnson’s efforts to forge an alliance on the issue. “My overarching answer to this is that we’re always going to be looking at it from the interests of Canada and to create that competitive advantage where it is.”

Canada Says It’s Open to Carbon Tariffs Amid Global Climate Push

Johnson is expected to use his country’s G-7 presidency this year to win support for so-called carbon border adjustments. Ng’s comments indicate that Canada is, at the very least, open to the concept.

“This government is clear around our ambitions and objectives around climate change and I absolutely believe that trade and climate and the economy all are synergistic,” she said.

The European Parliament’s environment committee backed a resolution last week urging the European Commission to put a price on emissions from imported products by 2023.

The risk for Canada is global carbon border penalties could end up targeting the nation’s massive energy sector. At the same time, levies would alleviate some of the competitiveness concerns associated with Trudeau’s plan to increase Canada’s domestic carbon tax over the next decade.

©2021 Bloomberg L.P.

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