Wednesday, January 23, 2019

Opposition to Canada's Carbon Tax

Despite the merits of carbon pricing Canada's Conservative premieres are united in their opposition to the country's proposed climate tax. The political dynamics are heating up in Canada ahead of a federal election that is scheduled to take place on October 21, 2019.  It remains to be seen whether Canadians are as intent on self abuse as their neighbors to the south or their former colonial masters across the pond.

As of yet there is no right-wing brexiteer nor any Trump style wannabe vying for the Prime Minister's job. However, Doug Ford the new premiere of Ontario, is a populist with an irrational disregard for the environment. True to his word Ford has systematically dismantled Ontario's support for the green economy and climate action including carbon pricing.

Liberal Prime Minister Justin Trudeau has tried to embrace both climate action and fossil fuels. However, it appears that in trying to have it both ways he has earned the ire of people on both sides.  His policy dualism has alienated him from advocates of climate action and supporters of fossil fuels. Trudeau has been unable to deliver oil and gas pipelines just as he has failed to deliver the Pacific Northwest LNG export terminal in BC. 

Trudeau's main opposition is Federal Conservative leader Andrew Scheer. He initially indicated that his party has a climate plan that would respect the targets laid out in the Paris Climate Accord. However, in an apparent policy shift, on December 22, Scheer would not commit to meeting the Paris targets. He has consistently stated that he does not not support a carbon tax which is the centerpiece of the Liberal government's pan-Canadian climate deal and in March 2016 an agreement was reached on carbon pricing.

The Canadian government has made concessions to try to garner support for the deal. They delayed implementation and in response to concerns about competitiveness the Trudeau government slashed the requirements for some of the biggest energy users in the country.  The new requirements issued by Environment and Climate Change Canada increased the emissions threshold at which polluters would have to pay a carbon tax.

The federal government also announced that they would return 90 percent of all the money they collect from a carbon tax directly to residents of provinces who pay the levy. The federal rebates would only apply in provinces and territories that do not have climate pricing plans that meet federal criteria. 

These concessions do not appear to be enough to get the majority of Canadian premieres and territorial leaders to join the national carbon plan. In December Manitoba Premier Brian Pallister abandoned his plans to start charging a $25-a-tonne carbon tax. Instead Pallister announced he would join other conservative leaders in opposing federal plans to impose a carbon tax on provinces that do not have one of their own.

There are six provinces and territories that do not have a climate pricing plan that meets federal standards. The national carbon pricing plan is scheduled to launch in April for the provinces and in July for the territories. However, Saskatchewan, Manitoba, Ontario, New Brunswick and at least two of Canada's three territories are resisting the federal governments backstop.

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