Feds need to hold ground on carbon pricing
There is a very important opportunity that Doug Ford is presenting to the federal government. Ford agrees that climate change is real and is caused by human activity. He also understands that people do not trust government or government tax and spending programs to address the climate crisis. Ford has promised to "put money" in people's pockets — and scrap the cap and trade program.
A revenue neutral carbon fee and dividend program will meet all of Ford's criteria and the federal government can move Ontario's and Canada's low carbon economy forward.
The federal government must stay the course. Insist on carbon pricing. No one gets to pollute for free. But where a province refuses to participate, introduce it as a carbon fee and direct dividend to those taxpayers from the federal government.
Please do not bury the revenue in some sort of transfer to the provincial governments or other opaque adjustments/funds. It is absolutely essential for each and every taxpayer in those provinces to see that the revenue from the dividend is being returned to them- every cent of it.
Yes, I know that economists have concluded that the least expensive approach is to reduce other taxes (Ecofiscal Commission), but the differences are small and frankly insignificant when compared to the vital importance of public acceptance of carbon pricing.
We have to face the fact that many taxpayers are weary and wary of new “taxes”. They do not trust governments to spend this revenue wisely. Many perceive carbon pricing as merely a “tax grab.” It is essential that the government address those perceptions head-on. Carbon pricing is far too important to be lost over these perceptions and concerns.
The federal government’s carbon price must be transparently and demonstrably revenue neutral. Taxpayers must be able to see the revenue returned directly to them — by cheque or in their bank accounts.
Otherwise, no matter how important and no matter how sensible, the initiative will be burdened and ultimately doomed by these perceptions.
After all, putting a price on carbon is not about raising revenue for governments: it is about introducing proper pricing signals and unleashing the marketplace. It is not a true “tax.” It is simply a fee to discourage polluting in the most efficient way possible.
But perceptions matter. Rightly or wrongly, nothing may matter more.
Steve Dyck and Scott Snider
Guelph Citizens Climate Lobby
This Op-Ed was originally published here.