File No.: 10700-40-58208 July 5, 2022 Honourable Steven Guilbeault, MP Minister of Environment and Climate Change Canada 200 Sacre-Coeur Blvd. Gatineau, QC K1A 0H3 Dear Minister Guilbeault: Thank you for your letter dated June 29, 2022, concerning the federal government’s carbon tax. This letter is an effort to provide an update with respect to our current thinking and focus on the issue. Please know that Nova Scotia will provide its final position in advance of your September deadline but, you are right, now is an appropriate check-in time. Under the federal program, Nova Scotians could see an additional 14.4 cents of federal carbon tax added to the cost of gasoline starting April 1, 2023. This is a significant increase, particularly alongside dramatic rises in the price of many essentials. In fact, this type of an increase on the price of gas alone, in a province like Nova Scotia, would lead to more energy poverty across the board. The extremely negative impact of such an increase would be felt disproportionately by middle and lower income families and those living in the vast rural areas of our province who, on average, consume a higher proportion of their income on transportation just to get to work and appointments. Given the current global situation with the price of fuel and the debilitating impact of 40-year high record inflation, government’s first priority must be to ensure that life is affordable, and people can attain and maintain shelter, afford food and support their families. This is certainly our priority for Nova Scotians. For this reason alone, Nova Scotians cannot afford the impact of the carbon tax at this time. That said, we owe it to our citizens to work to protect our environment. We believe this very firmly, as you know from our discussions and the very aggressive environmental legislation we passed. We are sincere about our commitment to the environment and Nova Scotians have always been sincere. Nova Scotia has had the second highest provincial rate of GHG reductions from 2005 levels. We have far surpassed our 2020 GHG reduction target of 10% below 1990 levels, reaching 25.3% below 1990 levels. Additionally, according to the Efficiency Canada 2021 Scorecard, Nova Scotia is ranked third in energy efficiency overall in Canada. …/2 Honourable Steven Guilbeault, MP Minister of Environment and Climate Change Canada Page 2 With our leadership on the environment, we accept the federal government’s jurisdiction to implement its carbon tax so this letter is only to stress the point that any new tax at this time will have severe, negative ramifications without a clear view of any benefits. Our desire is to work with you to find an approach that works for Nova Scotians. We see a number of ways we can do that. We can do more to protect the environment by working together on other policy initiatives around offshore wind than we can focusing solely on what would be a very harmful carbon tax at this time. We have paid close attention to comments made by you and your predecessor that the purpose of the carbon tax is to change consumer behaviour and reduce GHG emissions. That said, the global, dramatic increase in the price of petroleum has and will continue to shift consumer behaviour as much as can be reasonably expected. We believe that in today’s global context, market-driven price increases have already changed behaviour and any new, additional taxes on fuel products will only be punitive and create unfair hardship. Now is not the time to implement any new taxes - carbon or otherwise - and to push forward at this time will not obtain any incremental, meaningful additional environmental benefit. As such, to treat Nova Scotians fairly, we believe it is necessary to delay the implementation of the carbon tax at least until fuel prices stabilize. This is based simply on an acknowledgement of the stress that families are under and a recognition that now is not the time for a greater increase in the price of gas and home heating oil. Instead, we believe it would be beneficial to both governments to work together on the significant opportunities that are in front of us. There is a lot we can and want to do to reduce Nova Scotians’ GHG emissions and improve our energy self-sufficiency. Working with the federal government, we can move toward greening our grid and improving our economic prospects by enabling Nova Scotia to move forward with offshore wind projects. As you know, Nova Scotia has some of the best energy assets in the world, including our wind speeds and tidal power. It’s shocking that in a country like Canada we have no significant offshore wind production to speak of. We can help fix this with several exciting projects, but we need your support. Specifically, we require the immediate implementation of mirror legislation for the Offshore Accord Act amendments and its regulations by our two governments and we are hopeful that the federal government will move forward with these laws so that Nova Scotia can work with the sector to pursue offshore wind projects. …/3 Honourable Steven Guilbeault, MP Minister of Environment and Climate Change Canada Page 3 Additionally, more companies are stepping forward with technology that could harness the power of the Bay of Fundy. This would be game-changing for Nova Scotia. Unfortunately, the ability to move forward on these projects is currently being held up at the Department of Fisheries and Oceans. With a willingness at the federal level to support our energy prospects, Nova Scotia could be a world leader in the energy sector and thus, helping Canada win the race to green our grid. We are leaders in the environment and need your support to re-establish ourselves as leaders in the energy sector that, together, will help us reach our collective goals. I am hopeful that the federal government acknowledges our leadership and potential and is therefore willing to work together to support Nova Scotians by shielding them from further fuel price shock, while also moving forward with incredible green initiatives. I look forward to your feedback and working together to make life affordable and greener for Nova Scotians and Canadians alike. Warmest Regards, Honourable Timothy Halman, MLA Minister of Environment and Climate Change c: Lora MacEachern, Q.C., Deputy Minister, Environment and Climate Change