B.C. Conservatives pitch a carbon tax on U.S. coal as a trade-war measure

British Columbia Opposition Leader John Rustad floated the idea on Monday of imposing a carbon tax on American thermal coal exported through B.C. ports, in response to the U.S. President Donald Trump's tariffs on Canadian softwood lumber. While some climate activists fighting coal exports say this would lead to positive results by increasing the price of a dirty fuel, they argue the most effective action would be to ban exports altogether to tackle the climate crisis. 

The move to impose a tax usually used to control carbon emissions is an unexpected one from Rustad, who acknowledges that climate change is a real phenomenon but believes changing climate is not the most pressing issue facing British Columbians or the world. He rejects what he describes as “hype, scare-tactics, and false promises” surrounding climate action. 

But taken in the context of the U.S.-Canada trade dispute, the coal carbon tax fits more neatly with Rustad’s priorities. His plan aims to leverage carbon tax as a bargaining chip in ongoing trade negotiation and argues that as long as “unfair and unwarranted” duties on B.C. softwood remain, the province should respond with measures that impact the U.S. economically. 

Rustad, as opposition leader, does not have the ability to bring about the carbon tax on his own. The NDP government did not respond to a request for comment by deadline Tuesday. 

While B.C. doesn’t use the American thermal coal that passes through its ports, the province is still a key player in the global coal market. In 2023, the Port of Vancouver handled 17.6 million metric tonnes (MMT) of thermal coal, two-thirds of which came from the U.S. and was shipped to overseas markets such as China, Japan, and South Korea. 

U.S. Pacific Northwest states Washington and Oregon have rejected new coal terminals due to environmental concerns — so U.S. coal producers have turned to B.C. ports, where existing infrastructure and growing port capacity allows for exports. 

Fraser Thomson, an Ecojustice lawyer, argues that Canada is aiding the U.S. thermal coal industry by helping Montana coal to reach Asia. He calls thermal coal a “19th-century fuel” that has no place in today’s world, saying the trains loaded with coal place an unfair health and safety burden on B.C.’s Lower Mainland communities. 

Burning one tonne of coal creates the same carbon emissions as driving a gasoline car over 4,000 kilometers, and those emissions affect the whole world, Thomson said. “The atmosphere doesn’t care where carbon is emitted.” 

“Reducing emissions anywhere will help B.C. avert the worst impacts of climate change.” 

Rustad’s proposal comes as the Intergovernmental Panel on Climate Change and the United Nations Environment Programme have called for significant cuts to coal use, with the latter pushing for a near-total phase-out by 2040 to meet climate goals.

While Rustad’s plan for carbon pricing targeted at coal could help drive the economy toward renewables, according to Thomas Green, Senior Climate Policy Advisor at the David Suzuki Foundation, B.C. should go further. “The best way beyond carbon pricing would just be to announce that B.C. is not accepting, and won’t be exporting, U.S. coal,” Green says. 

Rustad argues that as long as “unfair and unwarranted” duties on B.C. softwood remain, the province should respond with measures that impact the U.S. economically.

This isn't the first time B.C. has found itself in this position. In 2017, B.C. Premier Christy Clark proposed a $70-per-tonne carbon levy on thermal coal exports, in response to Trump’s trade actions during her re-election campaign. The plan faced backlash from Alberta and the coal industry, and failed to win support. Clark lost the election, and the levy was never implemented.

In 2015, Dogwood BC, a non profit, non partisan citizen action group based in Victoria, B.C., sought a legal opinion on implementing a regulatory fee on U.S. thermal coal to address its harmful health and environmental impacts, especially along train routes and in coal-burning countries. The goal was to eventually ban U.S. thermal coal.

Christina Smethurst, a spokesperson for Dogwood BC, says she doesn’t believe B.C. can legally impose a carbon tax on coal mined outside its borders, since that would be a federal responsibility. "Our tactic to get that ban or shut down was to implement a levy," said Smethurst. This levy designed to offset the negative impacts of shipping it through the province, could slow or shut down operations, potentially hurting U.S. companies but unlikely to generate substantial public revenue for B.C. 

“It could be punishing for U.S. coal producers without offering significant benefits to B.C. residents,” she said. 

Smethurst suggests that the focus should be on the broader environmental impacts of coal exports, particularly the health risks posed by coal train shipments, which release toxic dust into the air. 

In his proposal, Rustad also suggested banning American funding for environmental activists in B.C., calling them “troublemaking layabouts.” 

The conversation around U.S. coal exports comes at a critical time for environmentalists urging federal action. "We welcome provincial measures that would frustrate U.S. thermal coal exports and call on the federal government to fulfil its promise to ban thermal coal exports entirely," says Thomson, emphasizing the importance of sending a strong message to the Trump administration.