Trudeau’s carbon tax leaves Canadian business out in the cold
Doug Ford’s dismantling of carbon pricing in Ontario is simply negligent. And Trudeau’s carbon pricing plan needs to be improved because it exposes small Canadian businesses to unfair competition. The Citizens Climate Lobby offers a carbon-pricing plan that is fair and sustainable for families.
I grew up in northern Alberta. All my family works in the oil and gas industry. Under our family farm is a massive store of bitumen. I love the land, the soil, the rain that falls on it and our ability to grow food there. We sold the farm, and I work in Ontario’s renewable energy industry. I and my family love Canada, and we need a fair and stable way forward together.
Andrew Scheer has joined Ford’s attack on the modern scientific world with potentially dire consequences for the livability of our planet. In the absence of climate action at the provincial level, we are looking at Trudeau’s federal government for leadership. Is Trudeau’s plan fair?
The good news is Trudeau is bringing a revenue-neutral price on carbon, and should be congratulated for sending the money back to people. But Trudeau must make the carbon cheques transparently fair — everyone should get the same cheque, and the government should not get the money.
Our friends on the right cannot support a carbon tax that grows government spending, so being revenue-neutral is important. Pricing carbon pollution is a market-based solution that avoids the intrusive red tape required to regulate carbon emission of our economy. The carbon cheques will allow families paying the carbon tax to make good choices.
Everyone, big business, small business and people, should pay the same price for the carbon pollution they emit. We consumers need the carbon costs to be included in the final market price of products, so we can make informed choices. Unfortunately, Trudeau’s plan has output-based pricing exemptions designed to protect trade exposed carbon emitters instead of a national solution that considers trade impacts.
Pricing carbon will make Canadian products more expensive and harder to export. And we will tend to buy lower cost, carbon-rich imported products instead of Canadian-made. This is called “carbon leakage.” Canadian economists on the Ecofiscal Commission indicate so long as the carbon price stays under $30/tonne the impact on most businesses is small. Trudeau’s plan will reach $50/tonne. To meet our Paris commitments, it will need to be over $100/tonne.
As the carbon price increases, local small businesses will be adversely affected. According to Jennifer Hillman, senior World Trade Organization counsel and general counsel to the Office of United States Trade Representative for NAFTA, carbon border tax adjustments or BTAs are a critical part of pricing carbon. Trade impacts can be mitigated through BTAs. With BTAs, a product being imported into Canada, having been produced in a jurisdiction without a carbon tax and therefore less expensive, would have a border tax applied to it — thereby levelling the playing field on trade.
Trudeau’s carbon plan has no BTA, but instead it has an output-based pricing system. Essentially large carbon emitters are able to negotiate emission credits to reduce the impacts of carbon pricing on their competitiveness. If they emit large amounts of carbon really well, it is business as usual.
In other words, it appears that Justin Trudeau is being led by multinational corporate carbon interests — not Canadian interests. Why would Trudeau hurt small business while watering down carbon pricing?
Follow-the-money analysis highlights the $4.5 billion in tax dollars sent to a multinational corporation for a rusty old pipeline that is never going to be expanded (happy to have that conversation with anyone that is interested). Justin’s words were "this pipeline in Canada's national interest." The subtext was "tarsands will be developed and global corporate carbon interests are being protected more than a livable climate."
Trudeau’s carbon plan protects global corporate interests, and does not provide a fair pricing pathway to reach our Paris commitments. We need a national plan to address climate change. We need real political leadership.
A carbon dividend system with border tax adjustments as proposed by the Citizens Climate Lobby works for families, so it is sustainable. We want to make good choices for our home, our planet and be good neighbours. But Trudeau’s plan is late, not national, hurts small business and is far from adequate. The Guelph Citizens Climate Lobby is organizing a town hall and we hope MP Lloyd Longfield will be part of this conversation.
The story was originally published here.