Trudeau’s carbon tax makes for poor policy
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Hey there, time traveller!
This article was published 13/10/2016 (2133 days ago), so information in it may no longer be current.
It’s easy to lift a piano onto the back of a truck — if everyone lifts at once.
If one person lifts while the others watch, the piano remains grounded despite the singular strain.
That’s the scenario a carbon tax presents to Canadians.
Prime Minister Justin Trudeau says he will impose a carbon tax on all provinces. The tax will start at $10 per tonne in 2018 and rise to $50 per tonne in 2022.
To put that in context, British Columbia’s carbon tax is currently $30 per tonne and translates to a 6.7-cent-per-litre tax on gas.
According to our calculations, Prime Minister Trudeau’s carbon tax will cost the average household more than $2,500 annually when it’s fully implemented.
There’s a problem: carbon taxes don’t work.
Even though British Columbians are forced to pay millions in carbon taxes, carbon emissions in that province are still climbing.
“Since 2010, B.C.’s greenhouse gas emissions have increased every year,” said Mark Lee, an economist for the Canadian Centre for Policy Alternatives.
“As of 2013, they are up 4.3 per cent above 2010 levels. Let’s cut the crap about B.C.’s carbon tax. To be truly effective, carbon taxes will need to be much higher than B.C.’s current rates.”
For Manitobans already struggling with high taxes, an extra $2,500 in carbon taxes is high enough already but, in reality, that number would continue to grow. Let’s consider where this policy of ever-rising carbon taxes leads.
Manitoba produces 2.9 per cent of Canada’s total emissions. Canada produces 1.6 per cent of global emissions. That means eliminating all of Manitoba’s emissions completely would only reduce global emissions by 0.046 per cent.
This would be equivalent to lifting the metaphorical piano a fraction of an inch — not nearly enough to get it on the truck.
How much should over-taxed Manitobans be forced to pay to produce an emission reduction equivalent to a rounding error in the global calculation?
Perhaps it would be worth asking Manitobans to suffer more if there were a reasonable hope all global players were making the same sacrifice.
But they’re not. China and the United States aren’t imposing carbon taxes. Australia has already experimented with a carbon tax and repealed it.
As it stands, the sacrifices Manitobans would have to make to pay an increasingly burdensome carbon tax would almost certainly be in vain.
Further, Manitobans are already paying dearly to produce clean energy and the proof is on every power bill.
Manitoba Hydro’s dramatic expansions are projected to produce huge amounts of emission-free energy at some point in the future, but they are coming at a steep and immediate price.
Under the previous government, Hydro projected rate increases of nearly four per cent every year for the foreseeable future.
Under the new government, Hydro admitted to making billion-dollar mistakes that will mean even higher rate increases.
Given the high price Manitobans are already paying to produce clean energy, how much more should they be forced to pay in carbon taxes?
Premier Brain Pallister is considering a carbon tax for Manitoba. He would do well to take his time.
Even Prime Minister Trudeau is planning to wait two years before he starts enforcing a federal carbon tax on provinces that don’t acquiesce to his policy.
By that time, carbon pricing experiments in Alberta and Ontario will reconfirm what B.C. has already proven — carbon taxes don’t work.
Saskatchewan Premier Brad Wall has done that evaluation and come to a concrete conclusion.
Even when David Suzuki taunted the premier by calling him a climate-change denier, Wall presented his case in stark terms.
“I believe in climate change,” Wall said. “But I guess I am a denier — I’m a climate tax denier. I deny the fallacy that a new tax on Canadians whose CO2 emissions are 1.6 per cent of global emissions is the best way for Canada to help fight climate change.”
Todd MacKay is the Prairie director of the Canadian Taxpayers Federation.