Saskatchewan Premier Brad Wall right to oppose carbon tax
The most important question to ask about any plan is: will it work?
Prime Minister Justin Trudeau is determined to impose a national carbon tax, but Premier Brad Wall is warning him not to force one on Saskatchewan. Premier Wall is right that a carbon tax could cripple a province already struggling with low non-renewable resource prices. But there’s an another important reason to say no to a carbon tax: the best attempt at a carbon tax to date hasn’t worked.
Our neighbour Rachel Notley is trying a carbon tax in Alberta that will be worth watching, but our more westerly neighbour British Columbia implemented a carbon tax in 2008 and we can already see the results.
B.C. has a carbon tax of $30 per tonne, which means a gas tax of 6.7 cents per litre. The plan was to keep increasing the tax. The impact on taxpayers of the carbon tax would be offset by cuts to income taxes, business taxes and others. Emissions were supposed to go down.
“We know taxes slow down economic growth, so if you add a carbon tax you have to also minus other taxes,” said Premier Christy Clark in a recent interview. “You can’t take more money out of people’s pockets.”
But apparently the carbon tax was taking more money out of people’s pockets. While virtually everyone pays more for virtually everything due to a carbon tax, not everyone benefits from some of the offsets that range from income tax cuts to business tax cuts and film tax credits.
“We believe in lower taxes wherever we can make that happen, recognizing that government is a real problem in affordability for people,” said Clark before she froze B.C.’s carbon tax in 2013 and put plans to keep raising it on hold.
A former NDP strategist used stronger words.
“It’s a regressive tax that benefits big business and the wealthy at the expense of lower- and middle-income earners,” said Bill Tieleman.
B.C.’s carbon tax has another problem. It’s supposed to reduce emissions. But B.C.’s emissions are rising.
“Since 2010, B.C.’s GHG emissions have increased every year,” said economist Mark Lee. “As of 2013 they are up 4.3 per cent above 2010 levels.”
B.C.’s emissions initially went down after the tax was introduced in 2008, although it’s unclear as to how much of that was due to the carbon tax and how much was due to global economic uncertainty at the time. In any case, B.C.’s emissions are now rising.
Lee doesn’t work for an anti-carbon tax think tank. He works for the Canadian Centre for Policy Alternatives. And he doesn’t mince words.
“Let’s cut the crap about B.C.’s carbon tax,” said Lee. “To be truly effective, carbon taxes will need to be much higher than B.C.’s current rates.”
Never mind affordability for taxpayers, Lee says carbon taxes need to be higher. Let’s consider that scenario. Imagine a carbon tax so high that it not only reduces emissions, it completely eliminates emissions for all of Canada.
That would lower global emissions by 1.6 per cent. That’s right: 98.4 per cent of global emissions would be completely unchanged even if every single Canadian stopped barbecuing, driving or heating the house. And even that progress could be erased as emerging markets build power plants.
Implementing a carbon tax would be a bit like lifting a grand piano onto the back of a truck: one, two, three, lift. It might work if every major global player lifts at once. But it won’t work for Canada to strain every muscle on the count of two while other countries are sitting on the bench.
Prime Minister Trudeau is eager to jump into a carbon tax, but Wall is taking a hard look before he leaps. Previous attempts have delivered poor results. Wall is right to reject a carbon tax that will mean higher bills not lower emissions.
Todd MacKay is prairie director, Canadian Taxpayers Federation.
Story: Leader Post