The demise of Stéphane Dion has killed any national attempt to tax carbon-producing products. Even if such a tax were offset by lower personal and corporate taxes, Canadians apparently won’t accept this way of tackling the challenge of greenhouse-gas emissions that warm the atmosphere.
In British Columbia, Premier Gordon Campbell’s carbon tax, offset by lower taxes on incomes and companies, has sailed into strong political headwinds. “Axe the tax,” cries the opposition NDP to a widening chorus of applause.
No matter that 230 economists, who usually cannot agree that today is Wednesday, signed a letter in the last week of the federal election campaign implicitly recommending a carbon tax. No matter that 120 of Canada’s leading scientists wrote an open letter, too, urging immediate action.
Most Canadians apparently aren’t interested in paying anything extra to reduce emissions. They want the cheapest possible prices for gasoline, heating oil, electricity and other forms of energy. They don’t trust politicians to recycle the revenues from a carbon tax into lower personal and corporate income taxes.
A carbon tax is visible, immediate, threatening; lower income taxes are invisible, delayed and lost in incomprehensible tax forms. Sure, Mr. Dion wasn’t the world’s most gifted political salesman and, yes, the Conservatives ran attack ads against the carbon tax, but it’s doubtful in retrospect if Canadians would have accepted a tax.
Mr. Dion, like Mr. Campbell, was sandbagged by timing. No sooner had talk turned to their carbon-shift ideas than the world oil price soared, as did fuel costs across Canada. There was no serious economic reason for that international price surge, but it happened largely because of speculation and fear.
When prices soared, Canadians rightly said: We can’t handle these prices, and we sure can’t handle a tax on top of them.
Now would be the right time for a calmer discussion, with the world price back in the $70-to-$80-a-barrel range, but the election results put paid to any thoughts of a carbon tax.
Similarly, with a recession on the way, fiscal deficits beckoning, election promises about to be broken, and Canadians worrying about their jobs and savings, climate change is going to fade still further as a priority.
An Angus Reid survey recently suggested that only 5 per cent of Canadians deny the reality of global warming caused by human activity. Another 30 per cent, however, are unsure/confused about the issue – not dismissing it but not convinced that a problem really exists. The survey showed that the deniers and hesitators were overwhelmingly Conservative supporters, with Alberta, predictably, having the largest share of both groups.
No wonder, given the views of his supporters, that Prime Minister Stephen Harper spoke so little about climate change in the campaign, except to excoriate Mr. Dion and claim that the Conservatives had a “plan.”
The “plan” has been studied by experts outside the government. They unanimously believe it will fail to reduce emissions by 20 per cent (from a 2006 base) by 2020, as the government contends. But the beauty, politically, of the “plan” is that it demands nothing of voters/citizens. The emissions reductions are supposed to come from large emitters, with the largest reductions occurring in theory many years from now.
A less threatening approach could scarcely be imagined. Just to make things smoother, the “plan” contains all sorts of subsidies for people. Who doesn’t like getting money, especially for doing something you’re already doing, such as riding public transit?
The Conservatives also nominally favour a cap-and-trade system for industries to trade pollution credits. This policy is also favoured by the NDP and the two U.S. presidential candidates. Such a system, of course, will mean higher costs for consumers/taxpayers, something its political proponents never mention. Making “big polluters pay” is cheap, predictable rhetoric, because consumers of the companies’ products will also pay.
Canada, its internal incoherence laid bare every time the premiers meet, cannot devise a national cap-and-trade system. Mr. Harper’s “open federalism” invites this kind of incoherence, with provinces running off in different directions.
Eventually, Canada might be saved from its internal incoherence if the U.S. implements a cap-and-trade system and (a big if) allows us to join. Saved by the Americans. Imagine.
By JEFFREY SIMPSON
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