Lexpert Magazine

48 LEXPERT MAGAZINE | MAY 2018 | CARBON PRICING | and co-author of the firm's 2018 report, "Climate Change Essentials." "As lawyers, we can help companies navigate the many nuances of climate-related policies." At the moment, the nuances are, to say the least, still being worked out among the nation's political stakeholders. "We see that [lack of unanimity] in lots of different ar- eas of practice and businesses in Canada because we have 10 provinces and three territories and a federal government, so we oen have 13 or 14 different solutions to things," says Jason Kro, a partner in the Emissions Trading & Climate Change practice at Stikeman Elliott LLP in Toron- to. Evan Dixon, a partner in the Calgary of- fice of Burnet, Duckworth & Palmer LLP and co-author of the article, "Challenging times for the competitiveness of Canada's oil & gas industry," published in Financier Worldwide magazine, concurs. e seem- ingly eternal political toing and froing "is both the reality of Canada and one of the obstacles of actually doing things on these kinds of topics." As of late winter 2018, all governments $500 million to $800 million in provin- cial revenue annually, "applies to any fa- cility emitting more than 100,000 tonnes of carbon a year, of which there are 110 in Alberta," Reuters reported. "e oil sands make up 24 per cent of Alberta's total emissions. Most industries will have a benchmark set at 80 per cent of produc- tion-weighted average emissions. Any facil- ity producing at a higher intensity than the benchmark will be subject to 'compliance obligations', which can be met by paying for emissions at C$30 a ton, reducing emis- sions or buying offsets. ose producing at a lower intensity than the benchmark will accumulate credits that can be used to off- set future costs." e issues clients in Alberta are bring- ing to him vary, says McInerney. "Large emitters facing new compliance require- ments may need to source emission off- sets and/or emission performance credits as part of their compliance strategy. Re- newable project developers may need to monetize any environmental attributes generated by their project." Dixon cautions clients that there are still a number of critical issues that need to be had signed on to the federal framework ex- cept for Saskatchewan, which opposes the federal imposition of a carbon-pricing plan. Manitoba, which had initially declined to sign on, came on board in February 2017. It agreed to set a flat carbon emissions tax of $25 a tonne, which exceeds the federal government's requirement for the first two years. Aer that, however, Manitoba said it saw no need to raise the price higher, mean- ing the province would not reach the fed- eral government's $50-a-tonne threshold for 2020. British Columbia opted for an explicit price-based system, such as a carbon tax. "e main thing clients want help with," Lee-Andersen says, "is compliance. But there is a whole slew of other issues. Car- bon pricing is not the only climate change tool being implemented. It's a key tool but not the only one, so there are many other matters to assist clients with. For example, we recently assisted a client with assessing the potential impacts of the proposed fed- eral output-based pricing system on their facilities, which are located in multiple provinces, some of which will likely be backstop jurisdictions." Alberta - which is responsible for ap- proximately one-third of Canada's total GHG emissions - chose to impose a carbon levy and performance-based emissions sys- tem. It did not mark, however, Alberta's first foray into combatting GHGs. "Alberta is the leader [in Canada] in terms of climate change legislation, policy development and implementing legisla- tion," says Tom McInerney, a partner in the Calgary office of Bennett Jones LLP and co-head of its Climate Change & Emis- sions Trading team. "Alberta was the very first jurisdiction, before the federal govern- ment, that came out with binding climate change legislation in the form of 'Alberta's 2008 Climate Change Strategy.'" Since Alberta signed the framework, a lot of McInerney's focus, he says, "has been on helping clients understand the latest el- ements of Alberta's climate change policy. is includes the carbon levy and the new output-based allocation system of the Car- bon Competitiveness Incentive Regulation (CCI), which replaces the old Specified Gas Emitters Regulation." e CCI, which was announced in De- cember 2017 and is expected to generate SELINA LEE-ANDERSEN MCCARTHY TÉTRAULT LLP "One of the areas that lawyers who assist clients with carbon- pricing issues, possible statutory exemptions, risk assessments, commercial transactions and other matters have to closely follow is what's happening in the political scene both federally and regionally. As lawyers, we can help companies navigate the many nuances of climate-related policies." PHOTO: SHUTTERSTOCK

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