Rushing Carbon Price Could Spark 'National Unity Crisis': Minister

The Liberals would risk a national unity crisis if they rushed the launch of a federal carbon price, said Environment and Climate Change Minister Catherine McKenna Friday.

The potential for a legitimate backlash against the federal government's climate change policies -- McKenna pointed to northern communities facing higher food prices -- would derail the trust Ottawa is trying to build through a six-month consultative process with the premiers, she said.

''That's actually been a really good way to split up our country,'' said McKenna, speaking on a panel at the annual Broadbent Institute Progress Summit in Ottawa. ''I don't want this to be a national unity crisis. I get nervous about the way the conversation sometimes goes, that it's East versus West and different groups.''

McKenna was speaking to a crowd that responded enthusiastically to calls for a tougher reduction in oil and gas production, especially on pipelines.

''There are a lot of people that aren't there,'' said McKenna, addressing that enthusiasm for stronger regulation. ''So if what we end up doing ends up having a huge immediate dislocating effect on the economy where tons of people are losing jobs, I'm losing everybody. I'm losing them.''

Saskatchewan Premier Brad Wall -- currently in the midst of an election campaign -- has been Ottawa's most vocal opponent during the provincial and territorial talks. But mayors in cities where oil pipelines are planned have been loud critics of the oil and gas sectors, too.

The conversation when the federal Conservatives were in power often devolved into regional battles as well, with oil-producing provinces often claiming they were being unfairly targeted while providing a cash cow for the national economy.

Federal-provincial talks ongoing

McKenna has been facing tough question over what role, if any, the Liberals' drive for a national response to climate change is playing in the embattled petroleum business, an industry largely based in western provinces.

While job losses and shrinking investment are by and large the effect of the massive drop in the price of oil, the Liberals were strong players at the signing of an international climate agreement last November -- an agreement that has changed the parameters for policymakers globally -- and have already unveiled new regulations for pipelines on an interim basis.

On Tuesday, McKenna refused to say Canada faces a choice between backing the oil sector or meeting the international carbon emission obligations, saying the country needs jobs when she was pressed by reporters after an event in Montreal.

In last week's budget -- the Liberals' first -- the government promised $50 million over two years for the oil and gas sector to help firms reduce greenhouse gas emissions. They also put a $2 billion price tag on the Low Carbon Economy Fund, which will incentivize programs at the provincial and territorial level that materially reduce emissions.

Ottawa is expected to end its talks with the provinces and territories on a national climate change plan by September.