Wednesday, October 05, 2016

It's Never Been Easy

Saskatchewan, Nova Scotia, Newfoundland and the Northwest Territories walked out of the room  when Justin Trudeau announced a couple of days ago that he was putting a price on carbon. Chantal Hebert writes that the tax is no cash grab. What Trudeau is doing is filling a vacuum:

For this is not about replenishing the coffers of an impoverished federal government.
Trudeau’s planned introduction of a national floor price for carbon in 2018 marks the belated end of a federal vacuum that has seen successive prime ministers — from Jean Chrétien onward — make climate-change commitments on the international scene and then do little to ensure Canada meets them.

And most of the provinces already have schemes in place that will meet the $10 a ton threshold:

For example, B.C. started off with a carbon tax at the $10 level … almost a decade ago. That provincial tax now stands at $30. Under the plan announced by Trudeau on Monday, the federal floor would be raised by $10 a year for five years to reach $50 a tonne by 2022.

(As an aside, by the time Ontario, Quebec, Alberta and B.C. have to up their game to keep up with the national escalator clause, the 2019 federal election will be over.)

Moreover, despite the caterwauling, the the program is not a top down creation:

Provided they meet or exceed the federal floor price on carbon emissions, the provinces will also continue to be free to pursue climate-change mitigation schemes of their own choosing.
At some point, though, the onus will be on them to demonstrate that they are meeting or exceeding the federal floor price. Quebec and Ontario, for instance, have opted for a cap-and-trade system. Over the summer, the provinces and the federal government failed to reach a consensus on equivalencies between carbon taxes and cap-and-trade pricing. The two will eventually have to be reconciled. 

But "if the federal government does tax emissions in their place, it will return the proceeds to the provincial treasuries, presumably leaving them free to use the revenues to offset the cost of carbon pricing with tax breaks."

The tax on carbon is a classic Canadian conundrum. It's never been easy to make the confederation work.



Lorne said...

At least it is a start, Owen, although it is likely too little, too late. Thomas Walkom has some thoughts on it as well in today's Star.

Toby said...

A tax on carbon won't accomplish anything unless it hurts. The whole idea is to squeeze people and corporations so that they make better choices.

Judging by the large pickups and SUV's on the road I conclude that the so called "revenue neutral" carbon tax accomplishes nothing.

Removing tax relief and other corporate welfare to carbon industries would probably get the message across more directly. It might even force inefficient suppliers to shut down.

Owen Gray said...

Politics has always been the art of the possible, Lorne. The problem has always been figuring out what is truly possible.

Owen Gray said...

There's the rub, Toby. The question comes down to, "How much pain will Canadians tolerate?"

The Mound of Sound said...

Remember when your highschool math teacher would nod at your correct answer and then demand that you show him/her "your work"? You had to go through every step in your calculation to demonstrate that you really understood the problem and its solution.

We need something along those same lines with government initiatives on climate change. A $10 per ton carbon tax represents what exactly? Where's the work? Where's the math? A $10 bump each year for five years culminating in a $50 per ton tax and that's going to accomplish exactly what? What are we shooting for?

If there's no clear and meaningful link between the carbon tax levels and emission reductions then it's purely gestural, a nice collection of political numbers with little connection to scientific purpose.

Other than pissing off Saskatchewan's Poindexter, Brad Wall, of itself always a worthwhile pursuit, the government's purpose is incomprehensible. Trudeau needs to clear the air.

Owen Gray said...

I agree, Mound. It's easy to pull a number out of the polluted air. But if -- at the end of the day -- the air is still as polluted as it was when you began the exercise, all your work has been for naught.