Premier's math is right on carbon pricing, N.B. Power says

What's a "little" carbon pricing between friends? 

Premier Blaine Higgs had his math right last week when he pushed back at suggestions from N.B. Power that carbon pricing was responsible for "very little" of the utility's proposed rate increase.

Higgs said carbon pricing would force the utility to collect $22-23 million more from ratepayers next year.

One-and-a-half to two cents of each extra dollar of the increase was "directly related" to the carbon tax, he said.

It was a big I-told-you-so from Higgs, who has complained for years about what federal climate policies would cost New Brunswickers.

"Those are the policies — and I've said it before — those are the policies the federal government put in place, and then coupled with the situation in Europe, we have increased action and we have increased energy costs," he said.

Last week, acting utility CEO Lori Clark said carbon pricing was playing only a small role in the 8.9 per cent rate increase N.B. Power was seeking from the Energy and Utilities Board.

"Very little of that is actually attributed to the carbon pricing," Clark said.

"The carbon pricing itself is in the millions of dollars. Most of it is the result of the increase in fuels that we buy and trade on world markets." 

The next day, Higgs gave reporters the numbers and suggested they go back to N.B. Power.

"Maybe you should ask what the definition of 'very little' is. Rather than an abstract number, ask precisely what it is. I'm telling you precisely what it is."

N.B. Power confirmed Higgs's figures.

Carbon price costs to the utility will be $22 million in the coming year and rise to $30 million in 2025-26, said utility spokesperson Dominique Couture.

She said that represents one to two per cent of the rate increases over the next three years. 

Whether that amounts to a lot — or a little, or a "very little" — is in the eye of the beholder.

Higgs suggested to reporters that it's easier for him to criticize federal Liberal climate policies than it is for Clark, a non-partisan Crown corporation CEO.

"I can appreciate that I might be in a better position to make those comments directly about federal policies, and I understand that, but that's the reality of the impact of the carbon pricing," he said. 

World events pushed up costs

Higgs said the entire point of the federal carbon price is to make energy more expensive — to create an incentive for consumers and industry to burn less.

When Ottawa developed the policy, it was supposed to have a gradual, incremental effect.

Federal Liberals had no idea that pandemic-induced inflation and a war in Ukraine would pile even higher costs on top of its carbon tax.

Higgs acknowledged that, glancingly.

"We are now experiencing exactly what was planned, only maybe a little sooner because of what's going on in Europe. So this shouldn't come as any surprise. We have federal policies that are directly pushing energy in this direction," he said.

"We are trying to manage our way through that and trying to find transitions as we go through that."

Higgs cut the provincial gas tax in the first year he reluctantly imposed a carbon tax on consumers to meet federal requirements.

Since then, he has cut income taxes twice, and Finance Minister Ernie Steeves recently hinted more tax cuts are on the way. 

N.B. Power says more than $100 million of its increased costs in the coming year — 52 per cent of the total — are due to higher fuel costs.