Asking candidates about a carbon tax problem

Hey there, time traveller!
This article was published 05/06/2023 (914 days ago), so information in it may no longer be current.

Federal byelections are now afoot within Manitoba, but none of the results will alter the balance of power. As such, the byelections can be less about politics or party policies, and more about how individual candidates may be able to perform the nitty-gritty grind of parliamentary work to practically assist the Manitobans they would represent.

A useful tool to evaluate prospective candidates for a particular job in any business can involve the use of a “test.” By this, what is meant is posing a problem very similar to what candidates would face in real circumstances. The technique is also useful for candidates to evaluate if they would really like the job if successful. In the case of the by-elections, I have a perfect “test” to pose to all the prospective candidates.

This test relates to one relatively small, but fixable, concern that in its own way is indicative of the problems associated with our current federal government and its programs. We see lots of grand pronouncements and big promises, but rather poor execution. The implemented laws and programs never turn out as promised, and frequently do not work at all for their intended purpose, leading to poor performance and constantly unfulfilled expectations.

This case deals with a technical problem in the federal carbon tax. This tax has been the federal government’s marquee policy to reduce greenhouse gas emissions.

The federal government certainly has the right to impose such a tax, as confirmed by the Supreme Court, but at the same time, it is important to note this policy measure has been completely ineffective. No carbon tax in Canada has ever produced any noticeable emission reductions, and there is growing evidence to confirm this situation.

As a notable aside, Canada is still the worst performing country of the G7 on emission reductions.

At the same time, a carbon tax should never deliberately penalize provinces for doing good work to reduce emissions, nor onerously disadvantage individual provinces, like Manitoba. Yet, this is exactly what has been happening over the past more than four years.

Manitoba has a long and very apolitical history of leading the country on the inclusion of elevated levels of renewable biofuels in both gasoline and diesel. These mandates have led to significant and verifiable emission reductions. While we have led the country, no one really seems to notice, largely it appears because the mandates have worked so seamlessly and have never been a political flashpoint within the province. Manitobans, unfortunately, have ended up being forced to pay federal carbon taxes on renewable biofuels.

I had believed our situation was merely an oversight, indicative of how relatively unimportant we may be viewed. Yet, I discovered the wording of the Greenhouse Gas Pollution Pricing Act appears to deliberately target us. For example, in Section 8, subsection 5, the Act indicates that if ethanol content in gasoline in a province is at 10 per cent, as it is here in Manitoba, it is only counted as five per cent for the purpose of the carbon tax. Unbelievably, we are thus being taxed for reducing emissions, a pointedly anti-climate result.

These overpayments are not enormous annually but mount up, with us over time paying upwards of $200 million we should not be paying in the first place.

By comparison, this unnecessary outflow of funds is significantly larger than the expected benefits associated with the new Canada Water Agency being located in Manitoba.

Fixing such bluntly bad mistakes requires only relatively minor corrections, but, importantly, does require that changes actually must be undertaken and enacted, not just more talk. The test for prospective candidates, whether government or opposition alike, is thus less about expounding their own party message, but rather explaining how they would go about ensuring this obvious problem in legislation is actually corrected.

Possible actions could include collecting evidence and undertaking associated committee work, raising the issue with relevant ministers or senior officials to bring sufficient attention, developing a suitable private member’s bill, or possibly raising this in the House of Commons as a point of embarrassment to provoke correction. What is needed is coming up with a workable plan to effect change. It also likely means working with members of other parties.

Importantly, when you think about this, the activities described are exactly what the work of a member of Parliament is all about. I thus would look forward to hearing what individual candidates would propose to do in order to correct this obvious, but fixable, problem.

Robert Parsons, PhD, MBA, is a sessional instructor at the I.H. Asper School of Business, University of Manitoba, teaching in the areas of sustainability economics, mathematical methods, and supply-chain management.