B.C. Liberals threaten thermal coal levy in retaliation for U.S. softwood dispute

B.C. Liberal Leader Christy Clark is pledging to put a carbon levy on thermal coal shipments, including from the U.S., if the federal government doesn't agree to ban thermal coal shipments as retaliation for new U.S. softwood lumber tariffs.

Last week, Clark asked Ottawa to ban the shipments. Today, she said if the federal government doesn't act, a re-elected B.C. Liberal government would.

"Now is the right time ... to send a strong message to the Trump administration and U.S. lumber barons that we will not back down," Clark said.

"The levy would make thermal coal shipped through British Columbia utterly uncompetitive in the global market."

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Thermal coal is coal burned for heat and power, as opposed to metallurgical coal used in steelmaking.

Most thermal coal shipped through B.C. comes from the U.S., according to the B.C. Liberals, whereas most coal mined in B.C. is for steel.

The levy would add about $70 per tonne of coal, to account for the extraction, processing, transportation and combustion of thermal coal shipped through B.C.

It would also apply to thermal coal from other provinces, such as Alberta, Clark said.

'This is reckless,' says Horgan

B.C. NDP Leader John Horgan was critical of Clark's response to the U.S. softwood lumber tariffs, saying B.C. already has a "widely-respected" trade envoy, David Emerson, working on the issue in Washington.

I cringe at the idea of making life harder for our trade negotiators in Ottawa.- Werner Antweiler, UBC Sauder School of Business

Emerson, a former federal cabinet minister and forest company executive, helped negotiate the 2006 softwood lumber deal with the U.S. and was appointed by Clark in February to work on negotiations this time.

"I think this is reckless. It's irresponsible," said Horgan.

"She's been negligent on the softwood lumber file and now she's trying to put bravado ahead of good public sense."

Werner Antweiler, professor of economics at UBC's Sauder School of Business, is also concerned at the impact Clark's announcements will have on negotiations.

"I cringe at the idea of making life harder for our trade negotiators in Ottawa ... without actually giving them the ammunition they need to improve the deal," he said.

Antweiler said the proposed levy could also put the federal government in a "quagmire" if U.S. parties challenge it and demand compensation.

Westshore Terminals in Delta B.C., which calls itself North America's largest coal export terminal, has said it was "deeply disappointed" with Clark's request to Ottawa.

Coal 'dirtiest fossil fuel'

However, an environmental group, that has been fighting to stop thermal coal shipping in B.C. for years, says the levy is "the right thing to do."

"No doubt this is a political ploy," said Kevin Washbrook, director of Voters Taking Action on Climate Change, a non-partisan group.

"Regardless of her fights with Trump over softwood lumber, coal is the dirtiest fossil fuel there is. It's the biggest contributor to climate change."

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Washbrook said coal shipments are also bad for B.C. communities, in terms of diesel exhaust, coal dust and other pollutants.

He applauded the proposal to charge coal exporters for the future emissions of the product — something he calls unprecedented.

"That is a very big deal," said Washbrook.

"As far as I know, no one is doing that anywhere in the world, and it opens a huge door."

Antweiller questions whether a levy would help lower emissions globally from thermal coal, suggesting countries such as South Korea, Chile and Japan who buy thermal coal shipped from B.C. would find supply elsewhere.