This just in: a carbon tax won’t kill jobs

CHELSEA, QUE.—How does the old expression go? A lie is halfway around the world before the truth gets its pants on in the morning. With social media, as we see every day, the lie travels even farther and faster. One of the most dangerous current lies—although it has been around at least a decade—involves the so-called “job-killing carbon tax.” No one ever advances evidence of a specific carbon tax, in a specific place, killing specific jobs. Instead, this threat is accompanied by vague warnings about damaging “competitiveness” or ruining “the investment climate.” Right-wing critics and opportunistic politicians fret about rural residents, or those with fragile incomes, being driven underwater by this cruel, punitive tax (which starts at a few pennies per litre of gas and increases to around 11 cents by 2022 in provinces without their own carbon pricing scheme.) Never mind that shifts in the exchange rate can be far more disruptive, or, that gas prices swing wildly, and have for years, at the whim of the oil industry. Somehow those overnight 10 cent-per-litre hikes we’ve all come to expect are not the stuff of alarmist headlines. Besides, most broad-brush critiques of carbon taxes ignore the specifics of Justin Trudeau’s plan, which is to roll out next year. It already offers forgiveness to industries—notably cement factories and certain mining operations—that compete directly with U.S. companies that pay no carbon tax. And, according to a recent report by Canadian environmentalists to the international climate conference in Poland, some 80 per cent of oilsands emissions will be exempted from the tax. As for individuals, they will get the money back on their tax returns in the four provinces without their own comparable plan. Most recipients will come out ahead: they’ll get more back than the extra they have to spend in fossil fuel taxes. But is anyone listening? Do the facts even matter? Even since Stephen Harper successfully beat back former Liberal leader Stéphane Dion’s “job-killing carbon tax”—which is what the Conservative leader called Dion’s groundbreaking Green Shift—the phrase has become weaponized. Right-wing premiers and federal Conservative Leader Andrew Scheer portray the carbon tax as an attack on hard-working people, a sinister cash grab by an indisciplined government. It is blamed for everything from the recent GM closure in Oshawa to the rising cost of vegetables. The arguments don’t bear scrutiny. British Columbia has had a carbon tax for more than a decade and outperforms most other provinces economically. (Progress on reducing emissions has stalled since 2012 as B.C. waits for the rest of North America to catch up.) Sweden, Ireland, Norway, and a handful of other countries have seen economic gains, along with emissions reductions, thanks to their carbon taxes. Economists of all political stripes see a carbon tax as the easiest, most effective mechanism for reducing emissions. And GM moved out of Oshawa because the plant there was producing gas-guzzling sedans that consumers increasingly shun. The company announced a shift to electric and hybrid vehicles and is expected to build them in Mexico, or China, or somewhere cheaper. It is high wages that is the “job-killer”—over recent decades for Canada’s manufacturing sector, and, now, with the North American auto industry which is threatened by cheaper labour rates abroad. This challenge is more urgent than any proposed carbon tax. Again, why clutter a good slogan with facts, caveats, qualifiers? Both Alberta United Conservative Party Leader Jason Kenney, his former leader Stephen Harper, and probably even Andrew Scheer, know that a properly designed carbon tax can change behaviour and can be designed to be revenue neutral. It is, after all, originally a conservative idea. In 2008, Harper’s government even introduced a cap-and-trade system, another way of pricing carbon—arguably more complicated and vulnerable to manipulation, but with the great political virtue of being hidden. In any event, that is all past. Canada’s Conservatives are increasingly unwilling to do anything concrete to halt climate change. Ontario Premier Doug Ford did produce a plan recently, but it consists mostly of bribes to industry to clean up. Ford, who admits he is not “an expert” on climate change, has a one-line environmental policy: “no job-killing carbon tax." He also eliminated Ontario’s minimalist cap-and-trade system, to the dismay of the province’s green energy sector. The single government act that has had the largest measurable impact on reducing emissions is the Ontario government’s decision in 2004 to phase out coal-fired electricity plants. It was launched by Mike Harris and continued by Dalton McGuinty. That success is driving some economists, and environmentalists, to wonder whether the single-minded political focus on a carbon tax (however simple, however efficient)—is actually retarding progress on this urgent file. B.C. economist Mark Jaccard, an early proponent of carbon taxes, has mused publicly that the concept has become so politically toxic that governments should consider other options—like the sort of regulation that led to the end of coal in Ontario. A focus on large emitters should be an easier political sell: after all, the oilsands are the single largest source of greenhouse gases in the country with emissions expected to soar before 2030. If oil producers continue to get a free tide, it puts an unbearable squeeze on everyone else to reduce emissions, never mind make our fast-receding Paris targets. But this approach fails to take into account the enormous power of the oil lobby and its political acolytes—led by Alberta Premier Rachel Notley and Kenney. Harper proposed regulating emissions in 2008, but somehow never got around to agreeing on caps and timelines. And, although Canada has signed an international commitment to reduce subsidies to the oil sector, the Trudeau government keeps shovelling money its way—most recently in the form of a $4.5-billion pipeline. Notley recently announced she is postponing her promised 100 megatonne cap on oilsands emissions ( a key backstop to the federal carbon plan), which was intended to kick in by 2030. Another focus favoured by Jaccard, and others, is a more rapid move to electric vehicles which would mean significant reduction in the 25 per cent of emissions that come from transportation. An even bolder idea, although not new, is a national electric grid that would allow Quebec, Manitoba, and British Columbia to export their surplus green energy to other provinces and eventually displace, or limit, the use of fossil fuels. Premiers even mused about such a system at the recent first ministers' conference. Building such a grid would require federal money and it would be expensive, of course—but cost never seems to be an issue when it comes to building, or buying, pipelines, or subsidizing oil and gas. Meanwhile, back on Planet Earth, everyone is gearing up for a federal election centred on the proposed Liberal carbon tax. The right-wing forces are armed and ready. Trudeau’s problem is that his carbon tax isn’t even that popular with people who want a carbon tax. That’s because it has been poorly explained and marketed—the government should be sending individual rebate cheques rather than burying the carbon credit in the tax system—and also because Trudeau has undermined his own green credentials by encouraging the expansion of the oilsands. If he backs away from his carbon tax now, he will betray Liberal hopes and his own caucus. He has no choice but to continue to sell his marquee environmental policy—even though it will have a limited impact on emissions, and overshadows other, more modest environmental gains his government has made. Far sadder than the fate of any government, however, is the reality that emissions continue to rise, that the oilsands continue to expand and that other countries will lead us to the inevitable green future. Meanwhile, in Canada our politicians squabble about taxes and announce carbon reduction targets that will be forever deferred. Susan Riley is a veteran political columnist who writes regularly for The Hill Times. The Hill Times