It’s official: the Conservative Party of Canada would implement its own version of Justin Trudeau’s carbon tax. The announcement was met with praise and condemnation from both sides of the political aisle. There is a lot to unpack in CPC Leader Erin O’Toole’s plan, but at face value, there isn’t much to celebrate. That is, unless you love taxes, and have a problem with personal choice. .Optics wise, having a progressive climate plan is a no-brainer. The CPC was plagued by developments at its recent policy convention over a vote on the reality of climate change. For outsiders to the party, such a vote left many scratching their heads (as I was). Climate change is real, and it is something that needs to be addressed, so a vote on “if climate change is real” felt like it was a policy vote from decades ago and not from 2021..That said, optics aren’t enough when evaluating the efficacy of a policy. Any good climate plan has to both produce better environmental outcomes, while at the same time not destroying the livelihoods of Canadians. The policy that delegates votes on included some odd (for conservatives) language about some rather ambiguous language about what to do about the issue (like subsidies, and a carbon tax). .But the question remains, is O’Toole’s plan viable and worth pursuing?.In O’Toole’s plan, the CPC would implement a carbon tax of $20/mt on greenhouse emissions. In comparison to the Liberal carbon tax – which is currently at $40/mt – there is some temporary financial relief for Canadians. $20/mt is considerably lower than the current tax, which does mean that Canadians would ultimately have more money in their pockets, in the short term. .But O’Toole plans to raise his carbon tax to $50/mt by 2022. It gets to where Trudeau currently is, just slower. .That said, $20/tonne, or $40/tonne for that matter, seems more like the “mushy middle” than an attempt to seriously reduce emissions, not to mention keep his promise to repeal the carbon tax entirely. Many on the left – and some on the centre-right (like Michael Chong or Andrew Coyne) – have noted that serious reductions in emissions require a substantially higher carbon tax in order to shift consumer behavior to the point where we have better carbon reduction outcomes. Given that O’Toole’s proposal would have a cap at $50/tonne, it is likely that this policy will ultimately end up irritating everyone involved, both inflating prices for consumers while at the same time barely tinkering at the margins on emissions..Another difference – beyond the carbon tax rate – between O’Toole’s plan and the current Trudeau plan is where the tax money will go. O’Toole stated that “Not a cent goes to Ottawa”. Sort of..Right now, carbon tax revenues are redistributed to Canadians in the form of a rebate, but O’Toole’s plan would pivot from that approach and instead deposit the funds into a “low carbon personal savings account”, which could be used on government approved ‘green’ purchases like energy efficient appliances. From a consumer standpoint, I don’t think that restrictions on where the rebate can be spent is a worthwhile endeavor, and it is a system that is certainly ripe for abuse and cronyism. As flawed as the Trudeau carbon tax and rebate may be, O’Toole’s is much more bureaucratic. .What counts as a green purchase? Who decides what is green and what isn’t? And why should it be the role of Ottawa to make that call? It certainly is appreciated that federal coffers won’t benefit from O’Toole’s carbon tax, but any benefit from that is immediately offset by Ottawa inserting itself into your decisions as a consumer. It’s one thing to put a tax on carbon, but its another to create a conservative version of the nanny state telling you what to do. At the end of the day, we should trust Canadians to make that call for themselves, without any intrusions from Ottawa. .On top of that, it is puzzling why O’Toole is reinventing the wheel, when Michael Chong’s proposal of using the revenue to reduce personal income taxes would be appreciated from taxpayers coast to coast. If we are going to have a carbon tax from Conservatives, should it at least not be a conservative one? .Lastly, the ugliest part of the CPC’s climate tax plan is its embrace of “carbon adjustments”, otherwise known as carbon tariffs, aimed at punishing “bad actors” and protecting Canadian jobs. As explained in The Financial Post, carbon tariffs attempt to punish foreign exporters for failing to meet Canadian environmental standards. The issue with this approach is that it isn’t foreign exporters who pay the tariffs; its Canadian consumers who pay for it. That means that incredibly important industrial imports like steel, fertilizer, cement and even finished goods from the developed world would become exponentially more expensive via inflated prices..We saw this first hand when Trump’s tariffs on imported washing machines caused a 12 per cent increase in prices, around $88/unit, which created $1.56 billion in extra costs for consumers. Supporters of tariffs would argue – as O’Toole is – that inflated prices are worth it to expand domestic industry and create jobs. Trump’s tariffs did create manufacturing jobs in the United States — approximately 1800 new positions. The problem is that those jobs came at an enormous cost to U.S. consumers: $811,000 per job created, which comes nowhere near passing a cost-benefit analysis..Tackling the issue of climate change is something that the Conservatives need to do, but the proposal put forward seems like it is the worst of both worlds. For consumers, we get drastically inflated prices, and Ottawa inserting itself into our purchasing decisions, while at the same time barely moving the needle on emissions. .David Clement is a columnist for The Western Standard. He is also the North American Affairs Manager with the Consumer Choice Center
It’s official: the Conservative Party of Canada would implement its own version of Justin Trudeau’s carbon tax. The announcement was met with praise and condemnation from both sides of the political aisle. There is a lot to unpack in CPC Leader Erin O’Toole’s plan, but at face value, there isn’t much to celebrate. That is, unless you love taxes, and have a problem with personal choice. .Optics wise, having a progressive climate plan is a no-brainer. The CPC was plagued by developments at its recent policy convention over a vote on the reality of climate change. For outsiders to the party, such a vote left many scratching their heads (as I was). Climate change is real, and it is something that needs to be addressed, so a vote on “if climate change is real” felt like it was a policy vote from decades ago and not from 2021..That said, optics aren’t enough when evaluating the efficacy of a policy. Any good climate plan has to both produce better environmental outcomes, while at the same time not destroying the livelihoods of Canadians. The policy that delegates votes on included some odd (for conservatives) language about some rather ambiguous language about what to do about the issue (like subsidies, and a carbon tax). .But the question remains, is O’Toole’s plan viable and worth pursuing?.In O’Toole’s plan, the CPC would implement a carbon tax of $20/mt on greenhouse emissions. In comparison to the Liberal carbon tax – which is currently at $40/mt – there is some temporary financial relief for Canadians. $20/mt is considerably lower than the current tax, which does mean that Canadians would ultimately have more money in their pockets, in the short term. .But O’Toole plans to raise his carbon tax to $50/mt by 2022. It gets to where Trudeau currently is, just slower. .That said, $20/tonne, or $40/tonne for that matter, seems more like the “mushy middle” than an attempt to seriously reduce emissions, not to mention keep his promise to repeal the carbon tax entirely. Many on the left – and some on the centre-right (like Michael Chong or Andrew Coyne) – have noted that serious reductions in emissions require a substantially higher carbon tax in order to shift consumer behavior to the point where we have better carbon reduction outcomes. Given that O’Toole’s proposal would have a cap at $50/tonne, it is likely that this policy will ultimately end up irritating everyone involved, both inflating prices for consumers while at the same time barely tinkering at the margins on emissions..Another difference – beyond the carbon tax rate – between O’Toole’s plan and the current Trudeau plan is where the tax money will go. O’Toole stated that “Not a cent goes to Ottawa”. Sort of..Right now, carbon tax revenues are redistributed to Canadians in the form of a rebate, but O’Toole’s plan would pivot from that approach and instead deposit the funds into a “low carbon personal savings account”, which could be used on government approved ‘green’ purchases like energy efficient appliances. From a consumer standpoint, I don’t think that restrictions on where the rebate can be spent is a worthwhile endeavor, and it is a system that is certainly ripe for abuse and cronyism. As flawed as the Trudeau carbon tax and rebate may be, O’Toole’s is much more bureaucratic. .What counts as a green purchase? Who decides what is green and what isn’t? And why should it be the role of Ottawa to make that call? It certainly is appreciated that federal coffers won’t benefit from O’Toole’s carbon tax, but any benefit from that is immediately offset by Ottawa inserting itself into your decisions as a consumer. It’s one thing to put a tax on carbon, but its another to create a conservative version of the nanny state telling you what to do. At the end of the day, we should trust Canadians to make that call for themselves, without any intrusions from Ottawa. .On top of that, it is puzzling why O’Toole is reinventing the wheel, when Michael Chong’s proposal of using the revenue to reduce personal income taxes would be appreciated from taxpayers coast to coast. If we are going to have a carbon tax from Conservatives, should it at least not be a conservative one? .Lastly, the ugliest part of the CPC’s climate tax plan is its embrace of “carbon adjustments”, otherwise known as carbon tariffs, aimed at punishing “bad actors” and protecting Canadian jobs. As explained in The Financial Post, carbon tariffs attempt to punish foreign exporters for failing to meet Canadian environmental standards. The issue with this approach is that it isn’t foreign exporters who pay the tariffs; its Canadian consumers who pay for it. That means that incredibly important industrial imports like steel, fertilizer, cement and even finished goods from the developed world would become exponentially more expensive via inflated prices..We saw this first hand when Trump’s tariffs on imported washing machines caused a 12 per cent increase in prices, around $88/unit, which created $1.56 billion in extra costs for consumers. Supporters of tariffs would argue – as O’Toole is – that inflated prices are worth it to expand domestic industry and create jobs. Trump’s tariffs did create manufacturing jobs in the United States — approximately 1800 new positions. The problem is that those jobs came at an enormous cost to U.S. consumers: $811,000 per job created, which comes nowhere near passing a cost-benefit analysis..Tackling the issue of climate change is something that the Conservatives need to do, but the proposal put forward seems like it is the worst of both worlds. For consumers, we get drastically inflated prices, and Ottawa inserting itself into our purchasing decisions, while at the same time barely moving the needle on emissions. .David Clement is a columnist for The Western Standard. He is also the North American Affairs Manager with the Consumer Choice Center
