Carney’s advice to Liberals puts low-carbon future above all

OTTAWA—Mark Carney has finally entered the political fray, although in a special role that will allow him—at least for now—to go right to the heart of government decision-making without having to bother with all the issues around getting elected. Be that as it may, his arrival on the scene as Prime Minister Justin Trudeau’s now-official adviser on the economy gave the Liberals something upbeat to put in the window as their caucus prepared to return to Parliament facing mostly bad news. With the media primarily interested in the politics of Carney’s appointment, there wasn’t much detailed coverage of how he views the dynamics of the country’s economy. Despite the seeming unpopularity among voters today of anything to do with reducing Canada’s carbon use, Carney made it clear he will be doubling down on the need for the government and Canadians to move heaven and earth to build a low-carbon economy. He said completing the low-carbon energy transition will make the difference between success and failure when it comes to this country’s long-term prosperity in a rapidly changing world. “Every major economy is accelerating their energy transition, and being low carbon is becoming a key driver of competitiveness,” he told reporters at the Liberal caucus meeting in Nanaimo, B.C., last week. Achieving low-carbon goals “is an issue for our manufacturing sector, it’s an issue for whether or not we are going to lead in information technology, it’s an issue for whether we are going to retain our ability to trade into the major markets,” Carney asserted. At a time when Canadians appear to see the federal carbon tax as an unfair intrusion by an activist government, Carney called for more government action, not less, to tackle climate change. He said there’s a “huge range of things” the federal government, the provinces, and stakeholders need to do to drive the low-carbon energy transition. “We have to help our companies become more competitive,” he remarked. Canadians need “real policies, we need solutions, not slogans,” Carney added in a clear shot at Conservative Leader Pierre Poilievre who calls the former Bank of Canada governor “Carbon-tax Carney,” and has popularized “Axe the Tax” without explaining what he would do about climate change. On that topic, Carney told a Senate committee in the spring he would be open to something other than a carbon tax, but only if the alternative would be more effective. “What’s critical in my view… is that if something is going to be changed, that something at least as good is put in its place. Ideally, if you’re going to change something, you put in place something better that still has that credibility and predictability,” he said. As an economist, Carney would obviously know that a carbon tax is a market signal that is the most effective way to influence economic activity—something economists of all stripes have always agreed upon. And it’s not at all clear what a replacement for the carbon tax would be. As Environment Minister Steven Guilbeault put it last week: “If someone in this country, on this planet, in this solar system, in this universe, can show me a measure that will give us 40 per cent of our 2030 emission reduction targets at no cost to Canadians, I’ll take it right away. There is no such measure.” Guilbeault was referencing the fact that most Canadian consumers get more money back in a carbon rebate than they spend as a result of the carbon levy. This—and the fact that most middle- and low-income people would be worse off financially if Poilievre were to scrap carbon pricing—seems lost on the public as a result of the relentless effort by federal and provincial conservatives to mislead Canadians about how the federal carbon tax impacts their wallets. All this means that with Carney spearheading Trudeau’s economic strategy, there’s no reason to think the Liberals—unlike New Democrats—will backtrack on their support for a carbon tax as a tool in the effort to save the planet from global warming. NDP Leader Jagmeet Singh, whose party appeared to be in danger of shedding a lot of votes to Poilievre's faux overtures to labour, decided days before Parliament reopened to do an about-face on the issue—apparently hoping to have it both ways in the carbon-pricing controversy. “We want to see an approach to fighting the climate crisis where it doesn’t put the burden on the backs of working people, where big polluters have to pay their fair share,” he said, conveniently forgetting à la Poilievre about the carbon rebate for consumers. Singh added that his party hasn’t figured out its new approach yet. With the Liberals freed from their deal with the NDP—assuming Trudeau can live with the demands of the Bloc Québécois in exchange for support in the Commons—the government has an opportunity to seek a more centrist position on economic issues. But the commitment to carbon pricing and the low-carbon energy transition as the key to future prosperity is likely, if anything, to be bolstered with Carney involved. Les Whittington is a regular columnist for The Hill Times. The Hill Times

Carney’s advice to Liberals puts low-carbon future above all

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Carney’s advice to Liberals puts low-carbon future above all

Mark Carney made it clear he will be doubling down on the need for the government and Canadians to move heaven and earth to build a low-carbon economy.

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