When Prime Minister Mark Carney announced he would reduce the Liberal government’s consumer carbon tax to zero, he also promised to introduce a “carbon border adjustment mechanism.”

He described the CBAM as a new government measure to “promote fair competition and improve environmental outcomes” while “supporting Canadian jobs in … energy-intensive, trade-exposed sectors, such as steel, chemicals, cement, and aluminum.”

GOLDSTEIN: Mark Carney’s ‘carbon border adjustment mechanism’ will cost you Back to video

What it means, assuming it happens, is that the Canadian government will impose tariffs on imported goods from countries that don’t have a national carbon pricing scheme comparable to Canada’s – currently $110 per tonne of industrial greenhouse gas emissions rising to $170 per tonne in 2030.

The increased retail prices for these goods resulting from these new tariffs will be paid for by Canadian consumers purchasing these products.

Some or all of this increased revenue for the government may be given in rebates to Canadian companies exporting their goods to foreign countries with little or no carbon pricing regimes, in order to make their goods more price competitive in those markets.

The purpose of a CBAM is to prevent........

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