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What is a carbon tax, and will it make a difference?

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Many experts agree that a carbon tax is the cheapest way to reduce greenhouse gas emissions, but the jury is out on whether the Canadian government’s new plan will achieve that in a major way.

On Tuesday, the federal government announced a carbon tax on the provinces and territories that did not sign on to the pan-Canadian framework on climate change.

“Starting next year, it will no longer be free to pollute anywhere in Canada,” Prime Minister Justin Trudeau said. “And we’re also going to help Canadians adjust to this new reality.”

Saskatchewan, Manitoba, Ontario, New Brunswick, Yukon and Nunavut will have to pay a tax of $20 per tonne of emissions. The tax will increase by $10 a year until it reaches $50 per tonne by 2022, but most of it will be returned to residents in the form of rebates — which for many Canadians will be more than what it will cost them, the government said.

It’s a plan not everyone agrees with, particularly Ontario Premier Doug Ford. Trudeau made the announcement at Humber College, in Ford’s riding of Etobicoke.

 

 

But Nobel Prize-winning economist Paul Romer says carbon taxes are the solution to climate change.

University of Calgary associate professor of economics Trevor Tombe agrees.

“Economists for a long time have been pointing to carbon taxes, or carbon pricing, as the most efficient or most cost-effective way to reduce greenhouse gas emissions,” Tombe said.

How it works

The idea of a carbon tax is straightforward — a price is levied on each tonne of emissions from fossil fuel sources, be it from coal, natural gas, gasoline, etc.

Opponents say a carbon tax is a cash-grab by the government that will cost taxpayers dearly. But supporters say the tax has to be high enough to dissuade people from making choices that cause emissions in the first place.

“What a carbon tax does is put an incentive in place for every individual and business to think about their own unique situation, to think about if they have low-cost ways of avoiding an emission and thereby saving on the tax,” said Tombe.

“It’s, in general, a way to lower emissions in the least-possible-cost manner. This would be contrasted to the government deciding on mandates — which type of appliance to adopt, which kind of light bulbs to use and so on.”

Prime Minister Justin Trudeau speaks to the media and students at Humber College regarding his government’s new federally imposed carbon tax in Toronto on Tuesday, October 23, 2018. (Nathan Denette/Canadian Press)

The federal government said 90 per cent of the carbon tax revenue collected will go back to households in the affected provinces and territories through Climate Action Incentive payments; the remaining 10 per cent will go to hospitals, schools and businesses in order to help develop greener solutions.

“The intent is to neutralize that concern people have about ‘Is this going to cost me too much?’ by giving all the money back to people,” said Nic Rivers, professor and Canada research chair in climate and energy policy at the University of Ottawa. “That’s the intent — but I think it remains to be seen how it’s going to play out.”

Carbon across Canada

B.C. already has a provincial carbon tax.

It started off at $10 per tonne in 2008 with a planned increase of $5 per tonne over four years. Beginning on April 1, 2018, the government increased it by another $5, raising it to $35 a tonne. It will continue on its $5-a-year-plan until it reaches $50 per tonne in 2020.

Some residents in the province receive a Climate Action Tax Credit.

So is it effective?

According to the B.C. government, since implementation GDP grew by 17 per cent and net emissions dropped by 4.7 per cent. There are estimates that B.C. could see a reduction of anywhere between five and 15 per cent under this plan.

A federal carbon tax has been a hot topic for debate for many provinces who that don’t have one — but B.C. has for the last ten years. The National looks at the effect B.C.’s carbon tax has had on the province. 2:08

Still, that reduction falls well short of B.C.’s initial plan of 33 per cent below 2007 levels by 2020. But it’s a step in the right direction, Tombe said.

“Small carbon tax, small effect. Larger carbon tax, larger effect,” Tombe said. “But it’s not the case that the initially modest carbon tax will have no effect.”

Alberta became the second province to introduce a carbon tax on Jan. 1, 2017, when it began levying a $20-per-tonne charge on emissions from fossil fuels. That rose to $30 per tonne in 2018, and it’s set to follow the federal increase to $50 by 2022.

The Alberta NDP government expected it would bring in $5.4 billion over three years, some of which would go back to consumers through rebates; the rest was earmarked for various infrastructure projects.

Other provinces have implemented other methods to reduce emissions, such as cap-and-trade. In this form, the government sets emission targets for businesses and organizations. Companies that know they will exceed the limit can buy credits from others who have leftover ones. It was the intention of Ontario to use such a system until Ford was elected and scrapped those plans.

2020 goals

While a carbon tax is widely lauded by economists as an effective — and cost-effective — way to reduce emissions, it remains to be seen what the results of Trudeau’s plan will be.

“Certainly we shouldn’t expect to see a big change [in emissions] suddenly. But it’s not the case that a $20 per tonne will have no effect on emissions,” Tombe said. “And as the carbon tax level increases, the effect on emissions — because there will be a stronger incentive to lower emissions — we’ll see a bigger effect.”

Rivers said the way to reduce emissions significantly is to raise the carbon tax even higher — more than the 2020 goal of $50 a tonne — or implement more effective ways of reducing fossil fuel emissions that would work in tandem with the carbon tax.

Even then, Rivers says, “It’s too early to tell if whether that will get us there.”

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The ‘Maple Majestic’ wants to be Canada’s homegrown Tesla

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Look out Tesla, Canada has a homegrown electric sedan on the way. Well, that’s if AK International Motor Corporation can drum up enough investment to make its EV a reality. Dubbed the “Maple Majestic,” the vehicle is a battery-electric designed to “excel in extreme climate performance without adversely affecting the climate, as befits a vehicle from Canada,” according to its website.

What’s in a name? — The company says the maple leaf is a “symbol of Canada’s warmth and friendliness towards all cultures,” while “majestic” refers to the country’s “status as a Constitutional Monarchy.”

That patriotism carries over into Maple Majestic’s parent company’s lofty goals. AK Motor founder Arkadiusz Kaminski says he wants the company, which he founded in 2012, to become “Canada’s first multi-brand automotive OEM,” and that the “Maple Majestic is intended to be Canada’s flagship brand of automobiles on the world stage.”

Partnerships are key — “We acknowledge that the best chance for the Maple Majestic brand to succeed, lies in continuing to build the relationship with Canada’s parts suppliers and technological innovators, whether they be academic institutions, corporations, or individual inventors,” the company explains. “We are currently seeking partners in automotive engineering, parts manufacturing, automotive assembly, electric propulsion technology, battery technology, autonomous technology, and hybrid power generation technology.”

In other words, don’t expect to be able to buy a Maple Majestic any time soon… and don’t expect to pour over 0-60 mph times, power output, range, or other key stats, because those don’t currently exist. For now, all we have are pictures and a short video clip. But at least those are arresting.

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PE-backed Quorum Software to merge with Canadian energy tech firm

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Houston-based energy technology company Quorum Software will merge with a Canadian tech firm to bolster its presence in oil and gas services.

Quorum announced Feb. 15 it plans to merge with Calgary, Alberta-based Aucerna, a global provider of planning, execution and reserves software for the energy sector. The combined firm will operate under the Quorum Software brand.

Gene Austin, CEO of Quorum Software, will continue in his capacity as chief executive of the combined firm. Austin, former CEO of Austin-based marketing tech firm Bazaarvoice Inc., became CEO of Quorum in December 2018.

Aucerna co-founder and CEO Wayne Sim will be appointed to the Quorum Software board of directors. Both companies are backed by San Francisco- and Chicago-based private equity firm Thoma Bravo.

“Over the last 20 years, Quorum has become the leading innovator of software deployed by North American energy companies,” said Austin. “Today, Quorum is expanding the scope of our technology and expertise to all energy-producing regions of the globe. Customers everywhere will have access to a cloud technology ecosystem that connects decision-ready data from operations to the boardroom.”

In addition to the merger announcement, Quorum Software announced it had entered into an agreement with Finnish IT firm TietoEvry to purchase TietoEvry’s entire oil and gas business. The agreement, which includes hydrocarbon management, personnel and material logistics software and related services, is valued at 155 million euros, or $188 million, according to a statement from TietoEvry.

“Our three organizations complement each other — from the software that our great people design to the energy markets where we operate,” said Sim. “Our new company will be able to deliver value to our stakeholders, while accelerating the growth of our combined business and the energy industry’s software transformation.”

The combined company will serve over 1,800 energy companies in 55 countries, according to the announcement. With its headquarters in Houston, Quorum will continue to have a significant presence in Calgary and in Norway, the headquarters for TietoEvry’s oil and gas software business. Quorum will have other offices throughout North America, Latin America, Europe, Asia and the Middle East.

As of Sept. 30, 2020, private equity firm Thoma Bravo had more than $73 billion in assets under management. In late December 2020, Thoma Bravo agreed to acquire Richardson, Texas-based tech firm RealPage in a roughly $10 billion acquisition.

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Piece of Kitchener technology lands on Mars on Perseverance rover

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KITCHENER — A piece of Kitchener technology has landed on Mars, thanks to NASA’s Perseverance rover.

The rover settled on the planet’s surface on Thursday afternoon. It’s been travelling through space since it was launched from Cape Canaveral, Fla. in July.

“The whole idea of being on a device that we’re sending to another plant with the express mission of looking for traces of past life, it’s pretty mind boggling actually,” said Rafal Pawluczyk, chief technical officer for FiberTech Optica.

The Kitchener-based company made fibre optic cables for the rover’s SuperCam that will examine samples with a camera, laser and spectrometers.

“The cables that we built take the light from that multiplexer and deliver it to each spectrograph,” Pawluczyk said.

The cables connect a device on the rover to the SuperCam, which will be used to examine rock and soil samples, to spectrometers. They’ll relay information from one device to another.

The project started four years ago with a connection to Los Alamos National Lab, where the instruments connected to the cables were developed.

“We could actually demonstrate we can design something that will meet their really hard engineering requirements,” Pawluczyk said.

The Jezero Crater is where the Perseverance rover, with FiberTech Optica’s technology onboard, landed Thursday. Scientists believe it was once flooded with water and is the best bet for finding any evidence of life. FiberTech’s cables will help that in that search.

Ioannis Haranas, an astrophysicist and professor at Wilfrid Laurier University, said the rover isn’t looking for “green men.”

“They’re looking for microbial, single-cell life, any type of fossils and stuff like that,” Haranas said. “That’s why they chose a special landing site. This could be very fertile land for that.”

“It’s very ambitious,” said Ralf Gellert, a physics professor at the University of Guelph.

Gellert helped with previous rover missions and said it’s the first time a Mars rover has landed without a piece of Guelph technology on it. While he’s not part of Perseverance’s mission, he said the possibilities are exciting.

“Every new landing site is a new piece of the puzzle that you can put together with the new results that we have from the other landing sites,” he said.

“It’s scientifically very interesting because, even though we don’t have an instrument on that rover, we can compare what the new rover Perseverance finds at this new landing site,” he said.

Now that Perseverance has landed on Mars, FiberTech is looking ahead to its next possible mission into space.

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