Photographer: Luke Sharrett/Bloomberg

B.C. Premier Vows to Slap a Carbon Tax on U.S. Coal Exports

  • Aims to make shipping through B.C. ports uncompetitive
  • B.C. premier vows to draft rules if re-elected next week

British Columbia’s premier threatened to impose a C$70 ($51) carbon tax on U.S. thermal coal exports if she’s re-elected next week.

"Ideally, the federal government will act on our request to ban thermal coal in our ports -- but if they don’t, British Columbia will charge a carbon levy on it," Christy Clark said at a lumber plant in southern B.C. on Tuesday, adding it would “make it uncompetitive to ship through B.C. ports.”

Clark, who is seeking a third term on May 9, called for a thermal coal export ban last week in retaliation for U.S. President Donald Trump’s new tariffs on softwood lumber, the province’s biggest export commodity. The move -- made in a letter to Prime Minister Justin Trudeau -- sent the shares of Canadian export terminal operator Westshore Terminals Investment Corp. and U.S. miner Cloud Peak Energy Inc. plunging.

Rick Curtsinger, a spokesman for Cloud Peak, didn’t immediately respond to phone and email messages seeking comment. Westshore General Manager Glenn Dudar wasn’t immediately available for comment.

Clark, in a statement posted on her Liberal Party’s website, said she hopes the federal government will enact the ban quickly. If not, she plans to instruct staff to begin drafting the regulatory framework for the levy upon re-election.

About 94 percent of the 6.6 million metric tons of thermal coal exported from B.C. last year came from the U.S., according to the statement. The proposed carbon price reflects the costs of greenhouse gas emissions caused by the extraction, processing, transportation and combustion of thermal coal through a B.C. terminal, it said.

The move would probably violate international trade laws, and Westshore and its U.S. customers "would have financial recourse with the B.C. government for lost revenues related to a possible ban," Daryl Young, an analyst at TD Securities, said by email.

— With assistance by Tim Loh

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