Efforts to set a carbon tax in Canada’s Nova Scotia face headwinds as opposition party leader Jamie Baillie said the measure risked stalling the province’s economic recovery.

Nova Scotia, on Canada’s east coast, is considering introducing a carbon tax to help it cut pollution while raising revenues.

Bailie, head of the province’s Progressive Conservative party, told its annual general meeting on Friday that the tax would be a burden for the province’s population of nearly 1 million people.

“If we are going to truly rebuild our economy, then we do need to change the way Nova Scotians are taxed, but that means finding ways to give families a break, not finding new ways to tax them even more,” he said, according to local media.

In November, a former Ontario cabinet minister Laurel Broten was tasked with reviewing Nova Scotia’s tax system and released a report recommending the introduction of a carbon tax similar to British Columbia’s, which came into force in 2008 in Canada’s westernmost province.

He said the tax could affect both stationary and mobile sources of carbon emissions, though it should strive to be revenue-neutral and take 10 years to fully implement, with electricity exempt for the first five in order to account for the renewable energy targets already implemented by the government.

Broten, who was brought in by current Nova Scotia premier Stephen McNeil of the province’s left-leaning Liberal party, estimated the tax could generate $229 million in annual revenue by 2020.

Nova Scotia is expected to generate 25% of its electricity from renewables this year, and has a target of 40% by 2020, which it will likely meet through importing hydroelectric power from nearby Newfoundland and Labrador. The province has also sets an emissions cap for the power sector.

“Nova Scotia’s example is important to the rest of Canada because it is a carbon-intensive province, with an electricity system based on coal, undergoing a significant energy transition … A carbon tax would fit nicely with its existing policy mix and contribute to a real transition away from fossil fuels towards more a more efficient and clean energy system,” said Brendan Haley, a former energy coordinator at Nova Scotia’s Ecology Action Centre, who also helped develop the province’s energy efficiency framework.

But the Nova Scotia Tories’ Baillie said a carbon tax could increase the cost of heating homes and driving cars at a time when Nova Scotians can’t afford it.

Nova Scotia’s economy has suffered more than most other provinces since the start of the global recession.

Mass emigration has shifted the province’s demographics, meaning that almost 20% of residents are now 65 or over.

But the province, whose economy is heavily dependent on exports, is showing signs of recovery, in part due to low oil prices and a tumbling Canadian dollar.

The carbon tax could be tabled in Premier McNeil’s spring budget.

By Mike Szabo – mike@carbon-pulse.com