By Ray Rivers
April 4th, 2024
BURLINGTON, ON
Canadian taxpayers have been doling out billions every year through their income taxes and GST/HST to subsidize the oil and gas sector. One estimate puts that figure at over $6 billion a year – over $200 per taxpayer. And of course there is no corresponding rebate for this. Federal prime ministers, including both Harper and Trudeau, had been promising to eliminate these subsidies for decades.
In 1973 the federal government bought a 15% share in Syncrude which gave them a closer look at how the oil industry worked.
In 1973 Pierre Trudeau bought a 15% share in Syncrude after US partner Atlantic Richfield pulled out of the oil sands. Federal subsidies have continued pretty much ever since. Trudeau senior even contemplated nationalizing the western oil sands at one point. In the end he created the National Energy Program to bring lower cost western oil to the rest of Canada in response to the international oil embargoes of the 1970’s.
Subsidies include income tax breaks; direct financial investment; carbon capture; and even the Trans Mountain pipeline. In addition to the feds, the three westerly provinces offer reduced royalties as well as tax exemptions. The other provinces have various programs offering some combination of direct subsidies and tax breaks for aviation and agricultural fuels.
Subsidies are the reverse side of taxation. Subsidies lower commodity prices which in turn increases the demand for fossil fuels. That defeats the purpose of carbon taxes, which aim to reduce demand through higher prices. Yet, despite commitments by the last two federal governments to stop giving your money to big oil and gas, these subsidies continue.
It’s little wonder that the effectiveness of carbon pricing so far has been somewhat disappointing. Between 2019 and 2021 emissions did fall by over 50 million tonnes but it is uncertain how much of that can also be attributed to the economic decline during the pandemic.
The electric vehicle is positioned to become what people will eventually use.
Rational people will react to higher prices by changing their behaviour, e.g.,taking public transportation instead of driving. But typically they’ll look for alternative modes of transportation, e.g. electric vehicles (EV). Developing alternate technologies like EV’s takes time which is why the carbon tax gradually increases – to accommodate the adoption of new low carbon technologies as they arrive on the market.
Few policies have been as well studied as carbon pricing. And 72 nations around the world have adopted some form of carbon pricing. Recently over 200 leading economic professionals challenged Canada’s opposition leader over his wrong headed attack on carbon pricing and all the misinformation he has been generating. These experts tell us that the only practical option for an orderly phase-out of greenhouse gas polluting hydrocarbons is a carbon tax.
Poilievre has rejected the advice of professionals, insulting and belittling them and insisting that his ‘common sense’ is superior to their decades of academic research.
Mr. Poilievre has rejected the advice of these professionals, insulting and belittling them and insisting that his ‘common sense’ is superior to their decades of academic research, including a Nobel prize in economics on the topic. And, of course, Mr. Poilievre offers no alternative. His policies to deal with climate change are non-existent. But then he a leads an antediluvian political entity steeped in the denial of global warming.
The linkage between the gas pump and climate change events, like the massive forest fires last year, is indirect, perhaps even subtle. But even ostriches with their heads buried in sand should be able to feel the heat as it increases year after year. Most concerning is that the opinion polls foretell the Mr. Poilievre will be Canada’s next PM.
Floods, drought and forest fires tell us climate change is already at out door. Carbon pricing is the least disruptive and most cost effective way of trying to meet Canada’s international climate change commitments. But even carbon pricing won’t work unless we are prepared to change our life styles. There is no free lunch if we really care.
Ray Rivers, a Gazette Contributing Editor, writes regularly applying his more than 25 years as a federal bureaucrat to his thinking. Rivers was once a candidate for provincial office in Burlington. He was the founder of the Burlington citizen committee on sustainability at a time when climate warming was a hotly debated subject. Ray has a post graduate degree in economics that he earned at the University of Ottawa. Tweet @rayzrivers
Background links:
Subsidies – Carbon Tax – Carbon Debate – 72 Nations –
Oil Sands History – Carbon Tax Info – Poilievre Defies the Experts –
You fail to mention one thing in all your bellyaching & patting Trudeau on the back – why doesn’t the Federal Government & its Ministers practice what they preach? In this day of modern technology in virtual meetings is it necessary for Prime Ministers, Government Ministers, Governor Generals to continually jaunt around the globe or across the country to every meeting imaginable? Does nobody take into the account the MILLION upon MILLION tons of Carbon Dioxide they pump into the atmosphere? But of course not, its not right to call them out to act like they expect the rest of us to do; besides, they wouldn’t get to rub shoulders with their political buddies & especially wine & dine as if there’s no tomorrow on our dime.
Some more information and data to ponder.
CO2 is the gas of life, plants need CO2 for growth through photosynthesis, all mammals (including us breath O2 and exhale CO2).
By geological standards we are in a CO2 “famine” with current measurements around 423 mg/L. At about 180 mg/L CO2 in the atmosphere would cause the photosynthesis process to shut down and lead to mass extinction.
Scientists have measure/estimated CO2 in the atmosphere as high as 7,000 mg/L through analysis of fossils, during this time the earth was extremely lush by all estimates.
Even at today’s modest levels we are starting to see the “greening” of areas that were once arid or desert. NASA has reported on this based on satellite images. I have a hard time to see this as a bad thing.
Higher CO2 means that food crops produce a higher yields with less fertilizer and less water, is this not a benefit for humanity?
Carbon tax, is not a tax on pollution, but in fact a tax on plant food.
I have tried to paste in a graph of the Central England Temperature record, the core measurement data that runs from 1600 to 2010, it is some of the best data climate scientist have. It is in the video that I linked, but unfortunately the image can not be put into the comment section, it is widely available. I’ll try to walk through this graph as best I can without the benefit of the actual image.
When I say data this is what I mean, not a website where everyone is drinking from the same Kool-Aid or have a set agenda.
Since 1600 to 2010 it shows a warming of about 1 deg C, during this “little ice age” (1600), mid evil times, it was a horrible period, significant disease and death. So, are we to get excited about a 1 deg C change surface temperature from one of the coldest periods on record to today, 400 years ago?
Then there is a 2 deg C rise from 1700 to about 1750, this is natural variation of the earth, no human influence of CO2 at the time and current models do not explain this.
The data from the late 1900 to just after 2000 is now coming into question because some of the location of temperature measurements are now in urban environments when previously they were in rural areas due to growth of urban areas. Because of asphalt and concrete, urban measurements bias historical measurements to the high side. Simply put, its hot on a black driveway, much cooler on your front lawn only 10 feet away.
Data scientists do everything possible to remove this bias, this is one of the arguments in court now regarding the Michael Mann hockey stick temperature profile, in addition to a number of scientists challenging Michael Mann’s statistical methods.
So, when I ask for data, this is what I mean. There are other graphs of forest fires, hurricanes, tornado’s, cyclones and when one looks back, its really difficult to see a trend to get to excited about.
Regarding your Jordan Peterson comment, unfortunately this is typical of the left, attack the person and not the ideas, very deplorable indeed.
Dr. Peterson speaks with some of the most intelligent leaders around the world, scientists and academics. He consults and councils some very intelligent individuals and powerful organizations. Sells out arenas around the world, a true Canadian treasure and has helped thousands of patients with his clinical practice.
We should all be appalled by the attack on his license from people who were never patients, never met him and simply did not like what he posted on social media. Many who hold professional credentials are speaking out about this, which is a dangerous form a censorship – we should want our best and brightest able to speak freely, challenge ideas, that is progress!
I just don’t understand Liberal math.
I do believe our planet is warming and things should be done to alleviate that problem. Where I get confused is by making the cost of gasoline 17 cents a litre more expensive or roughly $8.50 for a 50 litre a week fill up. Multiply that by 52 weeks for roughly $450 a year. The Theory being is that should incentivize me to go purchase a $100,000 Tesla or Lightning pickup truck.
So 100,000 divided by 10 (average life of an automobile) and Liberal math says I should spend $10,000 yearly to save the $450, but it gets better, they’ll give me more than $450 quarterly to really make that sound appealing. How is this carbon tax and refund incentivizing anyone to reduce their carbon footprint?
The average Natural Gas bill has risen as well and carbon pricing on the average yearly bill is now $347.
Liberal math again, buy a Heat Pump and they will pay up to $5000. I will pay $5-7,000 as well. Average furnace or AC lifespan being 10 years again, so $1200 to save 347 yearly
Dear Climate Change Denier – I’d refer you to ….
https://skepticalscience.com/global-warming-scientific-consensus.htm
Jordan Peterson – Seriously? Didn”t he just lose his licence to practice what he was actually trained for?
Floods, fires and droughts are not at our door as the scientific data from global records indicate:
https://www.youtube.com/watch?v=bOAUsvVhgsU
You could cherry pick data, select local phenomena, limit time frames, or claim for example forest fires started from warm weather vs. arson or some other form of “spark” (as we now know).
This is irresponsible fear mongering and devastating to society, those taking part should be absolutely ashamed.
Many Canadian’s have started to wake up to this fear mongering for political gain and more and more highly respected scientist are starting to speak up.
I would suggest more reading from Dr. Stephen Kunin, Dr. Judith Curry, Dr. Bjorn Lomburg, and whole range of interviews with climate scientists completed by Dr. Jordan Peterson. I further suggest Michael Schellenburger (Apocalypse Never).
Finally we can achieve far more benefit by exporting and converting NG to LNG to off-set coal combustion for energy production which is part of the Pierre Poilievre’s policy plan.
I expect to be called a “denier”, but if you take issue with global data presented, send me the long term global data to support your claim.
If you really want to see the lack of a plan, look no further than Canadas’s carbon tax approach which is not a plan, but an economic tool fashioned around the principle of price-elasticity-of-demand, except the options to replace it are not that readily available.
The lack of a plan is evidenced locally by Ford Oakville who are backing-off on their EV production investments to 2027. This after Mercedes did the same.
https://media.ford.com/content/fordmedia/fna/us/en/news/2024/04/04/ford-updates-timing-for-next-gen-evs–readies-manufacturing-plan.html
https://electrek.co/2024/02/22/mercedes-backtracks-ev-plans-gas-cars-2030s/
The Policy Brief by The Ivey, Energy Policy and Management Centre entitled, “Energy in Canada: A Statistical Overview”, shows the contribution of all industries including oil gas to our nation. Anybody trying to figure out how we should work towards a greener economy should at least be aware of what the contributions are at this moment and how we’re going to replace them.
https://www.ivey.uwo.ca/media/3792944/iveyenergycentre_policybrief_dec2020_energyinca_overview_editedjan13.pdf
If you really want to see the lack of a plan, look no further than Canada’s carbon tax approach which is not a plan, but an economic tool fashioned around the principle of price-elasticity-of-demand, except the options to replace it are not that readily available.
The lack of a plan is evidenced locally by Ford Oakville who are backing-off on their EV production investments to 2027. This after Mercedes did the same.
https://media.ford.com/content/fordmedia/fna/us/en/news/2024/04/04/ford-updates-timing-for-next-gen-evs–readies-manufacturing-plan.html
https://electrek.co/2024/02/22/mercedes-backtracks-ev-plans-gas-cars-2030s/
The Policy Brief by The Ivey, Energy Policy and Management Centre entitled, “Energy in Canada: A Statistical Overview”, shows the contribution of all industries including oil gas to our nation. Anybody trying to figure out how we should work towards a greener economy should at least be aware of what the economic contributions are to g.d.p. etc at this moment and how we’re going to replace them.
https://www.ivey.uwo.ca/media/3792944/iveyenergycentre_policybrief_dec2020_energyinca_overview_editedjan13.pdf
Philip – thank you for your comment. I do appreciate the effort you go to check the facts. In some cases I do rely on secondary sources of information, though I usually cross check to verify. And the numbers game is fraught with inaccuracies but I’d urge you to check out this Feb 23, 2023 Financial Post article and the Canadian Climate Institute it relies on – which concludes that there was a real GHG emissions reduction between 2019 and 2021 of 6.4%…..https://440megatonnes.ca/insight/early-estimate-of-national-emissions-shows-promising-trends-for-2021/…. And we also need to remember that the country’s population grew by three quarters of a million new carbon emitters during that period.
And regarding forest fires, there is indisputable evidence that 2023 was Canada’s worst wildfire season on record, with five times more tree cover lost due to fire in 2023 than the year before. Thanks again for keeping my feet to the fire. It is appreciated.
Ray, there is certainly a positive correlation between population and carbon emissions. But if you are choosing to increase the population faster than you are able to reduce emissions per person, then you will be unsuccessful at reducing total carbon emissions which are being blamed for climate change.
Further, and I should have mentioned this earlier, the carbon tax theory is based on the substitution effect. By increasing the price of carbon-based fuels, rational consumers will switch to lower-priced, non-carbon fuels. But that’s the problem–the substitution effect can not take place to any great degree. Why? Because the capital cost of accessing those non-carbon fuels is far too high, especially when half the Canadian population is living paycheque-to-paycheque. And in addition, given the current skepticism of the reliability of electric vehicles and heat pumps, those alternatives are not seen as close substitutes by the majority of the Canadian population.
Couldn’t agree more Fred…not.enough has ever been made of the rebate and Poilievre has only ever been good at being an attack dog..no substance.
Carol if we all “make” money on this carbon tax then shouldn’t we just keep increasing it? If we double the tax would all of us get double the rebates? Surely you can’t believe that this is how it works, that this is just “free” money being handed out to 80pct of the population and it has no cost? This is smoke and mirrors.
“Between 2019 and 2021 emissions did fall by over 50 million tonnes but it is uncertain how much of that can also be attributed to the economic decline during the pandemic”. Really Ray? If you look at the data, GHG emissions in Canada in 2020 had fallen to 711.47 mt–this was mid pandemic. But by 2021, as Canada’s economy began to recover, those emissions rebounded to 733.1 mt and by the end of 2022, they had risen again to 756.8 mt. I think the data is very clear–the pandemic was solely responsible for the decline. In fact, if we compare the 2022 data with 2015 ( when Trudeau took office) at 764.53 mt, very little reduction in GHG EMISSIONS has occurred. All at a cost of billions of dollars to Canadians. The reality is that the Liberal carbon plan, like so many other Liberal fantasies, promises much, delivers little. https://edgar.jrc.ec.europa.eu/report_2023#emissions_table
“Floods, drought and forest fires tell us climate change is already at out door”. Do they Ray? In my lifetime and I’m almost 76, these events have occurred at irregular intervals and severities. Is it always caused by climate change? Consider the latest darling of the climate crisis set–Canada’s disastrous 2023 forest fire season. Is this caused by climate change? Let’s consider the government’s own data from 1980 to 2022 (most recent available) and let’s assume that climate change didn’t just start in 2023. What does the data show? Wild fluctuations in the number and severity of forest fires. If you apply a “best fit” line over the data base for those 42 years, you see a small but gradual reduction in the number of forest fires culminating in 2020 in the lowest number of forest fires over the entire 42 year period–I don’t see the climate alarmists mentioning 2020. Or perhaps there are other causative factors at play besides climate in explaining our forest fire record. https://cwfis.cfs.nrcan.gc.ca/ha/nfdb
Ray,
Incisive as usual. Sadly it seems that Canadians will once again choose to support Pierre P and plunge us further into the looming crisis. In the recent ad campaigns to show the “gentler” side of PP he is shown doting on his children. I wonder what they will really think of him once they old enough to realize what he has espoused.
Mr. Rivers is both dead right and dead wrong. Carbon is a problem but that produced in Canada is minimal, 2% of the world production. For the next few years China and India are forecasted to increase their carbon by more Canada’s total out put. So even if Canada stops producing carbon, our forest fire problem will continue. Canada does not get credit for is millions of acres of forests capturing carbon ever day.
I did not have an air conditioned car until 1976 and my home was not air conditioned until1980. So if we really want to get serious about lowering our carbon footprint, lets do the following.
1. No more air conditioning in cars and houses.
2. No more carbon based steel plants
3. No more cement plants
4. Convert all aluminum plants power generation to feed to electrical grids.
5. Family homes limited to 1000 square feet above ground level
6. Stop producing animals for food of for pets
7. Toilet flushed one per day per person
Now the Politian’s can get down to real work.
Well done Ray, I only wish that the Liberals had done a better job at communicating this…..
Perhaps even those in the “non believer” camp would be able to understand why this is the most critical threat we face and why this action was necesaary.
He also never talks about the rebate. 8 out of 10 homes gets all the money paid in tax back plus more in some cases. So it is only rich folks with two our three houses and boats who are actually out of pocket for fueling their yachts and mansions PoiLIEvre is once again only in it for the rich while pretending to be a support of the common person. His ideas are dangerous and reckless.
That’s simply not true. I’m a middle-income retiree who owns his own home. This year my carbon rebate is $560; my DIRECT costs in paying for the carbon tax +HST (can’t forget that the Liberals like to tax the tax) amount to an estimated $730. I’m already out by $170 but it’s not over. I also have to calculate my INDIRECT carbon taxes in the form of higher prices for all goods and services, including Burlington Property taxes. Add another $500 to 600 per year. In total, I’m out by at least $700 per year and likely more. Fortunately Fred, most intelligent Canadians are doing their own calculations so the LIBERAL LIE that “you get back more than you pay” is increasing being recognized for what it is. BTW, I don’t own two or three houses (mine is only 1400 sq ft), I don’t own a mansion, I don’t own any yachts.