Liberals plagued by communication breakdown on carbon pricing

Hey there, time traveller!
This article was published 14/06/2024 (646 days ago), so information in it may no longer be current.

How do you turn a win on carbon tax into yet another in a string of crushing losses?

Just ask Prime Minister Justin Trudeau and key cabinet ministers, who are struggling to get the message right on climate change and carbon taxation.

At a time when the effects of climate change are getting worse, the Trudeau government has stumbled, scuffled and otherwise failed to make the case for carbon pricing. The past two months offer an excellent case in point.

In April, the Parliamentary Budget Office quietly amended a controversial report on the fiscal and economic impacts of the consumer-level levy on fossil fuels. The PBO analysis — which claimed most Canadians were paying more in carbon tax than getting back in rebates — had been used for months by Conservative Leader Pierre Poilievre to hammer the Trudeau government and undermine public confidence in carbon pricing.

And then, the PBO admitted it had made “an inadvertent error” in its calculations. The exact details of what the PBO did, and how it affected the final analysis, are the mathematical equivalent of an ice-cream headache. Suffice it to say they messed up and in so doing, stoked skepticism about carbon pricing at a time when we simply must start emitting less.

But wait, the Liberals had a slim chance to rescue the messaging on the carbon tax’s economic impacts with an internal analysis done by Environment and Climate Change Canada, Ottawa’s lead department on all things related to climate change. If the PBO analysis was flawed, perhaps the ECCC could provide better numbers.

Unfortunately, Environment and Climate Change Minister Steven Guilbeault refused to release it. That harvested a whole new crop of rage by the Conservatives, who suggested the ECCC report had to be yet another analysis that shows how hard Canadians are being hit by carbon pricing.

After more than a week, Guilbeault relented and released the ECC report. For the most part, it did show the carbon tax would be effective at reducing greenhouse gas emissions by 800 million tonnes, or more than 11 per cent of current emissions, by 2030.

That’s a win, right? Not exactly.

The report also suggested carbon taxes would drive down gross domestic product by about $25 billion, a finding that once again played right into the hands of Poilievre and the axe-the-tax gang who continue to make completely fictional claims about the impact of the carbon tax while also failing to offer an alternative to address climate change.

It might be that the Liberals have lost the ability to inject any fact into an issue that Poilievre has converted into his personal chew toy. Even so, the Liberals could have highlighted two key caveats on the ECCC analysis which strikes at the heart of the need for some system of carbon pricing.

First, although $25 billion seems like a big number, when you consider that Canada’s GDP is expected to hover around $2.6-trillion by the end of the decade, then the impact of carbon taxation on GDP is less than one per cent. If properly explained, you might find that a goodly number of Canadians concerned about climate change would be willing to pay that price to eliminate 800 million tonnes of greenhouse gas emissions.

However, even more important than context on the GDP is the fact that the ECCC’s calculations are based on the theory that nothing else in either Canada or around the world will change between now and 2030. That’s a huge problem because the whole point of carbon pricing is to change the way people live, the way businesses operate, and the way governments support the economy.

If Canada — both in the public and private sectors — makes more strides in converting industries and employees reliant on the oil patch to other high-value industrial causes — think solar panels, batteries and EVs just for a start — then the impact on GDP would be largely mitigated. So would taxpayer support for things like converting home heating from oil and gas to ground-source heat pumps.

The ECCC model also does nothing to account for the increased costs to government, private business and individual citizens from worsening climate change. Governments could literally go bankrupt from having to underwrite the costs of fixing everything that is destroyed by extreme weather.

In Poilievre’s world, nobody in Canada changes. We continue to drive the same vehicles, heat our homes the exact same way and work in the exact same jobs. In fact, we’re already changing a lot of those things and as we do, we are less affected by carbon tax.

Remember, the carbon tax is not the goal. The goal is to burn less fossil fuel. If we can embrace the change that is encouraged by carbon taxes, we will go a long way to making the economy more resilient and sustainable. And paying less carbon tax as a result.

It’s not that the Liberals aren’t saying those things, but their more salient thoughts are being swept away by their chronic failure to deliver their message.

And that will always be the most effective way of turning a win into a loss.

dan.lett@freepress.mb.ca