1. Some quick thoughts on the detail of the federal carbon pricing backstop today.
2. Really, there's two pieces of new information here. First, where will the federal carbon pricing apply? And second, how will the revenue generated be recycled back to the provinces?
3. Looks like the backstop will be imposed (at least in part) in SK, MB, ON, NB. Other provinces and territories had already voluntarily taken on parts of the backstop. 
4. That means we should be expecting new policy announcements soon from NS, PEI, and NL; their new systems will apparently be consistent with the Pan-Canadian framework, though details TBD.
5. Probably the biggest story here: 90% of revenue generated by the backstop will be returned to households (not governments) in the province in which they were generated. Bigger households get bigger cheques.
6. And more most households, rebates will larger than their carbon pricing costs. Households will see net gains.
7. IMPORTANT: these rebates do NOT undermine the incentive to reduce GHG emissions from the price. ecofiscal.ca/2018/09/26/how…
8. They also make the net policy package (pricing + recycling) progressive: low income households will see relatively smaller costs (or even benefits) as a share of their income.
9. The remaining revenue will go to support for municipalities, universities, schools, hospitals, non-profits, indigenous communities, and small and medium sized businesses. Details TBD.
10. The small business piece is worth unpacking a little more. For three reasons, sending the money to households, rather than those small and medium businesses, can makes sense.
11. First: in most cases, they will pass on their carbon costs to households anyway.
12. Second, we should be thinking about competitiveness through a much broader lense than carbon pricing. And small business taxes rates were lowered earlier this year to 10% and will be lowered again in January to 9%. That's the lowest rate in the G7 and 4th lowest in the OECD
13. And third, the broader carbon pricing policy has already addressed the biggest concerns around competitiveness through output-based pricing for large emitters. ecofiscal.ca/2017/05/24/exp…
14. Some economists might still prefer revenue used to cut other taxes. But that door is still open: moving forward, provinces could implement their own policies in the future, and use revenue as they see fit.
15. Bottom line: this is a simple, transparent mechanism that returns all revenue generated in a province back to citizens in that province. And it puts a price on carbon across the country. That's a great start.
Addendum: I have now noticed multiple spelling and grammatical errors in this widely viewed thread. Sigh.
