The Forest And The Trees

When it comes to taxing carbon, the Conservatives are into self-flagellation. Foremost among them is Brad Wall. Stephen Maher writes:

Like the previous federal Conservative government, Wall seems to represent the view held by some fossil fuel companies — that climate change likely isn’t caused by carbon emissions, but even if it is we shouldn’t do anything about it, since little Canada can’t have much impact on global emissions and we’d be certain to lose revenue and jobs.

That seems to also be the view of Calgary MP Michelle Rempel, who took to Twitter to attack Telus and other companies that support Trudeau’s carbon plan.

On Friday, even the  Globe and Mail came out in support of the prime minister's plan:

Economically speaking, the Trudeau government’s approach is the right one. Environmentally speaking, too. The question is whether, over the long run, it can be sustained politically. That’s up to you, dear reader and dear voter.

Ottawa is creating a national standard and leaving it up to each province to decide how to meet it. Beginning in 2018, carbon will have to be priced at $10 a tonne, with the price rising by $10 a year until it hits $50 in 2022.

What’s all that in plain English? A $10 tax on a tonne of carbon is equivalent to a tax on gasoline of 2 cents per litre. A $50 per tonne price means a gas tax of 11 cents a litre.

And the Globe pointed out that, if Wall so chose, that money could go to tax cuts:

A conservative provincial government, like Mr. Wall’s Saskatchewan Party, could decide to take advantage of higher taxes on gasoline, diesel, natural gas and coal to lower taxes on things everyone wants more of, like income and investment. A conservative-minded premier could promise to turn every dollar of carbon levy into a dollar in tax cuts. That would make for an interesting contrast to Alberta and Ontario, which are largely planning on spending their carbon billions.

As usual, Conservatives can't see the forest for the trees. 

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.

Image: theguardian.pe.ca