Rivers on: The Politics of Taxing Carbon

Rivers 100x100By Ray Rivers

March 30th, 2021



Erin O’Toole gave up a huge opportunity to advance the theory that he is a new kind of conservative. He says he wants to move his Conservative Party of Canada (CPC) into the more electable political centre of Canadian politics.  That would allow him to challenge the centre-left Liberals for that block of voters who can make the difference between forming government or lingering in opposition.

Erin Otoole

Conservative leader Erin O’Toole

But then his response following the Supreme Court decision on the constitutionality of federal carbon pricing disappointed a growing number of Canadians who have come to accept the carbon tax as a necessary treatment for our fossil fuel addiction.  And it took only a few hours after the court announcement for two of his biggest provincial allies on the tax, Scott Moe and Jason Kenny, to desert him, concluding they would now surrender and likely develop their own provincial carbon taxes.
Ontario has not yet said what it is planning to do, except that it will respect the court decision. Presumably that means doing nothing but watching the feds collect the money and redistribute it as they have been doing.  Ford, who came to power after the political assassination of former leader Patrick Brown, killed Brown’s plans for a provincial carbon pricing scheme with great aplomb.

gas pump carnon label

A label that just wouldn’t stay in place.

Ford then dismantled the in-place efficient Ontario’s cap and trade carbon pricing system at a cost of at least $5 million .  That move is costing the province an additional $2 billion annually in revenues.  Then Ford allocated $30 million in his losing effort to fight the federal carbon tax, and spent another $4 million advertising against the tax.
Then there was the cost of producing sticky labels mandated to go on to gas pumps across the province….and promptly fall off again.  Fortunately the court decision against the stickies saved Ford, a former label company executive, the embarrassment of presiding over a law and a label that just wouldn’t stay in place.  All in all, not bad for a government promising to cut waste.

The Supreme Court ruling has left everyone trying to figure out where O’Toole really stands.  On the one hand he has to be admired for entering the lion’s den of his party’s last convention, to declare that climate change is real.  Unfortunately the lions disagreed and, behaving like the dinosaurs they are, sent a red-faced O’Toole home, mumbling something about killing the carbon tax anyway.

But the paradox of promising to develop a Trudeau-beating climate plan and promising to kill any kind of carbon pricing scheme at the same time has never dawned on him.  He has continued to push the big lie that the tax hurts the poor and the disadvantaged which – thanks to the rebate – it doesn’t.  But then why should a little truth get in the way of well-established anti-tax ideology?

He is right, though, that the carbon tax would eventually kill jobs – oil industry jobs in an industry on its way to irrelevance.  Recall how politicians in Quebec used to worry about the loss of asbestos industry jobs, even as the workers were dying from asbestosis.  That debate ended and despite all the fears, the world did not.

Once all of the provinces introduce their own carbon taxes, the federal tax might almost be moot. Except to be effective a carbon tax has to keep increasing.  So that means that the feds will still be setting the rules.   And that is why the court decision is so important; to keep carbon pricing advancing and on a level playing field across the country.

It’s clear that O’Toole hasn’t thought this all out.   But he is still apparently working on his own climate change plan, which will be handicapped without the incentives offered by higher carbon prices. What might he include then?  He could be expected to offer even more subsidies to the oil companies as they try to bury their emissions, something called sequestration.  And he might commit to more nuclear power?  But don’t expect him to mention carbon pricing.

emmissions exhaust

Emissions: They are killing the planet

Quebec recently committed to ban the sale of gasoline powered cars by 2035.  Mr. O’Toole could hitch onto that as a national policy.  There is also speculation that the USA under the Biden administration may be looking at a gas guzzler ban as well.  Banning the sale of appliances which use fossil fuels, like gas water heaters, would be an even more effective way of curbing the demand for carbon based fuels.  Though one can only imagine how those dinosaurs that compose O’Toole’s base would react to that idea.

But no matter what final policy package Mr. O’Toole selects as his plan, to be effective it will have to involve the eventual closure of much of Canada’s fossil fuel industry.  And those jobs and all that oil income for the western provinces, where his political power lies, is why he rejected the carbon tax in the first place.

Rivers hand to faceRay Rivers writes weekly on both federal and provincial politics, applying his more than 25 years as a federal bureaucrat to his thinking.  Rivers was a candidate for provincial office in Burlington where he ran against Cam Jackson in 1995, the year Mike Harris and the Common Sense Revolution swept the province.



Background links

O’Toole on Carbon Taxes –    Supreme Court –   Conservative Dinosaurs –  

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8 comments to Rivers on: The Politics of Taxing Carbon

  • joe gaetan

    With respect to the Supreme Court 6 to 3 decision and Dinosaurs. Canadians of every political stripe should care equally about climate change and our way of governing. The SCC decision included 3 dissenting decisions that for good reason are not binding. However, they can and have acted as a persuasive authority guiding future decisions. If you disagree with the import of dissenting opinions try reading the works, accomplishments, or writings of justices Abella or Ginsberg.
    Beyond the political bent of this article our Constitution is the supreme law of our land and let us remember what the three dissenting judges had to say on the matter. Namely, two judges argued the carbon tax law tramples on provincial rights and opens the door to further intrusions while a third judge dissented partially, arguing “Ottawa has the right to pass such a law but this one gives the federal cabinet too much power”. One dissenting judge went so far as to say the decision “is bound to lead to serious tensions in the federation. And all for no good reason, since Parliament could have achieved its goals in constitutionally valid ways’.
    If readers wish to understand Climate change and its challenges, I implore them to read Bill Gates book entitled, “How to avoid a Climate Disaster – The solutions we have and the BREAKTHRUGHS we need”.
    Mr. Gates eloquently and intelligently addresses many aspects of the challenges before us and particularly for the Climate Ostriches among us, the bad boys of climate change, steel, cement, nuclear energy as well as our oil and gas resources, and how they in fact also form part of the solution. As an example, on the subject of plastics (p101) here is what Bill had to say about the role plastics can play in the fight against climate change, “Plastics are also what allow fuel efficient cars to be so light; they account for as much as half of a car’s total volume, but only 10% of its weight.
    My point, if we are going to succeed where climate change is concerned, as a country we have to stop thinking binary and start using more of the right side of our brain.

  • Carol Victor

    So what Mr. Wooster, is O’Toole going to do when 54% of his party are climate deniers?

    • Phillip Wooster

      Carol, O’Toole himself is committed to pursuing policies to reduce carbon emissions–that is what will happen. ( In case you missed it, political power in Ottawa is centralized in the PMO’s office. Since you apparently have no problem with Trudeau operating this way, you should not have any problem with O’Toole ultimately making the call) However, he will and should scrap the carbon tax–a tax that has been proven not to work (check out BC’s failure to reduce total carbon emissions after 13 years of carbon taxes) to reduce carbon emissions. Liberals love to trot out the thesis proposed by Drs. Nordhaus and Romer that carbon taxes are the most efficient way to reduce carbon emissions BUT the Liberals have conveniently OMITTED key parts of the thesis which don’t support their propaganda. Nordhaus and Romer proposed carbon PRICING, not necessarily taxes on end-use consumers BUT–and here is the part of the thesis that LIberals love to ignore, the two economists recognized that carbon emissions were a GLOBAL PROBLEM that required–wait for it–a GLOBAL SOLUTION. They proposed carbon pricing on a global basis with penalties for countries that did not comply. I would think intelligent Canadians have figured out by now that when Canada punishes itself by accepting lower economic growth and a lower standard of living to reduce its 1.6% of total global emissions while China with nearly 30% of total global emissions (and growing!) does nothing, all that’s happening in Canada is a very expensive exercise in virtue-signaling.

      Let’s face it–the Paris Climate Accord is a huge joke. When two of the world’s largest economies and two of its worst polluters–China and Russia, are exempt from its provisions before 2030, how can it be taken seriously? China–using its own data, will increase its coal consumption by 1 billion tons by 2030 with numerous coal-fired electricity plants on the drawing board–it will increase its carbon emissions by at least 3 times Canada’s total current emissions. The Paris Climate Accord is not about climate, it’s about the Chinese undermining Western economies to its own benefit.

  • Hans Jacobs

    It’s difficult to lead when your party doesn’t want to follow you.

    In the short term, demand for gasoline is nearly inelastic so that adding a carbon tax to the price should not be expected to reduce consumption significantly, but it certainly annoys people who need it to get to their jobs.

    Re: “…an industry on its way to irrelevance…” – maybe in the very long term, but we would need to find substitutes for an enormous number of petroleum based products; e.g., natural gas, propane, gasoline, jet fuel, diesel fuel, furnace oil, asphalt, lubricants, polyethylene, polypropylene, polystyrene, a huge number of solvents and industrial chemicals, etc. It would not be an easy task……

  • Claudette B Mancini

    You can’t avoid a carbon tax, but you could avoid being held to account for anti-vaxxing! Which is more conducive to population health, clean air or safe environments? I’d say both! So if you are going to impose carbon taxes on companies that pollute the air, why not impose a different sort of restriction on anti-vaxxers? It seems to me that every sort of business would be greatly
    enhanced, especially restaurants, airports, anywhere people gather indoors, like gyms, theatres, and such places where presently vaccinated and non-vaccinated mingle.
    Taxes could be relaxed once we enjoy clean air, but if you couldn’t produce proof of vaccination, you’d be severely restricted from entry to indoor activities and probably requiered to mask elsewhere.

    Our schools used to demand proof of childhood vaccinations in order to be enrolled in the school, but that requirement has been softened some time ago. It would be interesing to know how many un-vaccinated youngsters became ill from close proximity to un-vaccinated classmates. Does anyone even keep scores?
    My generation was faced with polio. We got and received a vaccine. Previous generations were faced with smallpox. Now we have that vaccine. So many more serious diseases have been conquered, but more keep arriving, as we are presently experiencing, they are often a lot worse than their forebears.
    Something to think about. Freedom comes with reponsibilities, but many folks have never made that connection. Personal freedom is the only one they consider. Too bad for the rest of us.

  • Phillip Wooster

    “To keep carbon pricing advancing”. And Trudeau will certainly do that! But if you explain to Canadians what the cost of this tax is in real terms, support for Trudeau’s carbon taxes goes into the toilet. Tell Canadians that by 2030, the carbon tax on each tank of gasoline with be $20 and the carbon tax on annual home heating will be $700 and ask them if they still support a carbon tax. Already nearly half of the residents of the four provinces where Trudeau imposed his carbon tax have figured out that the Liberal propaganda that they get back more than they pay is a LIE–and this doesn’t include the INDIRECT carbon taxes these Canadians pay in the form of higher prices.

    • perryb

      It would be nice to see some actual data to support your assertions. On the face of it, you admit that more than half of the residents have figured out that they DO get back more than they pay. Sound like it’s working as designed to me.

      • Phillip Wooster

        Perry, the data was from SecondStreet.org/Leger and it looked primarily at the effect of the Liberals’ plan to increase carbon taxes to 2030 (you might note that they LIED in the 2019 election when they said the carbon tax would not rise beyond 2022).

        When the Liberals introduced the Trudeau carbon tax, it was clearly stated that 80% of Canadians would be receiving MORE in rebate than they paid in carbon taxes and that only higher income individuals would receive less. But despite their efforts not to be transparent by not requiring the carbon tax to be shown as a line item on gasoline receipts, I started doing some basic mathematics. This year my rebate on the carbon tax was $300–sounds good right? The Liberals are hoping so, but what they really hope is that you don’t do the rest of the calculation–carbon taxes paid. Here is my personal estimate–carbon tax on gasoline, including HST–10 cents per litre. I multiple that by the 50 litres per week I use and that amounts to $260.00 per year. But then I need to add in the carbon tax on my Enbridge bills–these will amount to at least $140 to the total. So far this amounts to $400 paid vs. $300 received–I’m already in the hole by $100. But I’m not finished–this analysis only includes DIRECT CARBON TAXES paid. Carefully hidden from view by the Liberals are the INDIRECT CARBON TAXES I pay in the form of higher prices as business passes on their carbon taxes to ordinary Canadians. I have conservatively estimated these at 2% of my total purchases (excluding gasoline, utilities, property taxes, home heating)–add in another $400 per year. I am now $500 in the hole. You will note that most Canadians don’t take this into account, but they should. And before you go saying I’m one of those higher income individuals I’m not–I’m a middle-income retiree. But this analysis would apply to most families in Burlington who are working, who are still driving a car 15000+km per year, who have less than 2 children in the family.

        And to note yet another Liberal LIE–those higher income individuals were said to receive less back than they paid because of their higher carbon use–not totally true. I noted while I was calculating my carbon tax individuals with high incomes actually have their rebate reduced as a result of earning higher incomes. How long before the Liberals move this income threshold down to reduce even more rebates and thus pocket the carbon taxes to finance their profligate spending?