The Conservative Party endlessly repeats the same lies about the carbon tax. What they never show is the other side of the ledger, where it’s clear that the tax doesn’t harm those who they say it does.
If you’ve ever seen an advertisement from the leader of the Conservative Party, Pierre Poilievre, you’ve likely heard him target the carbon tax as something that’s hurting Canadian families and small farmers. The Official Opposition leader has been campaigning to remove Trudeau’s carbon tax with the #AxeTheTax branding phrase.
However, Poilievre is prone to making declarative statements without showing his math. The most readily apparent example of this is how Poilievre’s campaign website for the imminent federal election in Canada features no actual analytic breakdowns of how he’ll help low-income families with, say, cutting the carbon tax or doing away with “red tape” and government bureaucracy.
Meanwhile, former US Democratic Party presidential candidate Bernie Sanders features numerical breakdowns of how to feasibly expand Social Security on his campaign website from the now long-past 2020 US general election.
Understanding the carbon tax
It’s important to note that Canada has had pricing on carbon pollution at a federal level going back to the late 1990s. What Conservatives are talking about when they complain about a cumbersome carbon tax on businesses and individuals today is Trudeau’s bill, the Greenhouse Gas Pollution Pricing Act (GHGPPA), which passed in 2018.
The GHGPPA levies a fee on carbon emissions where 90 per cent of the revenue is returned to households in the form of rebates with a graded scale of returns depending on income levels in order to help lower-income houses. The remaining 10 per cent of revenue is given back to small businesses and weaker sectors affected by the tax. As of now, the tax imposes $65 CAD per tonne of CO2 equivalent. This figure is set to increase to $170 CAD by 2030.
This breakdown already punctures an important framing tactic that the Conservatives use to fearmonger about its harmful effect on regular Canadians: the revenues from the federal tax are returned to the localities from which they are taken. Conservatives leave this fact out becauseit makes it easier to pretend that the Liberal federal government is a kind of Leviathan stealing taxes from ordinary Canadians who rely on gas to get to their jobs in order to fill its Ottawa coffers.
More importantly, when Conservatives only show the amount taken off the top to say the tax harmfully affects families and businesses, they do so by deliberately ignoring the other side of the ledger in terms of the returns from the built-in rebate system. “Through the Canada Carbon Rebate, eight out of 10 families in backstop provinces receive more money back than they pay into the system, with lower-income households benefiting the most,” explains the Canadian government’s website.
This means in more cases than not, the average Canadian is making money from the carbon tax. Yes, even when considering the tax’s marginal effect on inflation (0.15 per cent of inflation numbers according to the Bank of Canada), the tax is helping middle- and low-income Canadians.
Farming and industry under the tax
Another rhetorical feature of Poilievre’s campaigns against carbon pricing is the claim that it harmfully affects businesses. He likes to point out specifically how the farmer is negatively affected as it taps into long-felt western alienation in Canada, making him seem more down to earth than Ottawa elites embroiled in their cozy white-collar lifestyles.
Barring the rebate system seeing that more times than not — especially for lower-income Canadians through means testing — the tax gives back more than was paid into by individuals, farmers and industry in general are in a pretty good place due to special exemptions and alternative pricing systems.
For farmers, there’s a clause carved out of the carbon pricing legislation that exempts all diesel and gasoline as well as biological greenhouse gas emissions (GHG) used for operations. In fact, for better or worse, about 97 per cent of GHG emissions are not subject to carbon pricing. So much for Poilievre’s back-pocket archetypal farmer being robbed by Ottawa for his cows’ collective flatulence and heating the barn.
There are similar exemptions made for fishers as well.
At this point the reader may ask: But what about the carbon tax making large-scale industry non-competitive? Well, fortunately this was already thought of and is why inside the GHGPPA there’s the Output-Based Pricing System (OBPS) which specifically ensures that the same tax on individuals based on CO2 equivalent isn’t applied to larger scale industry.
If a business has a facility (or facilities) that exceeds 10,000 tonnes (10 kilotonnes) of carbon-dioxide equivalent GHG emissions, then that business is covered under the OBPS which exempts the business from the fuel charge. Instead, businesses protected by the OBPS must pass a threshold of emitting 50,000 tonnes of carbon dioxide equivalent GHGs to be subject to carbon pricing.
Furthermore, there are special tax credits given to OBPS-subject businesses that invest in greener technology and that expend fewer emissions based on similar-activity/product averages, thus monetarily encouraging a transition to renewables and better industry practices:
“The OBPS sets an emissions limit for each facility subject to the OBPS (covered facilities). This emissions limit is calculated using an emissions-intensity performance standard (i.e., a set level of greenhouse gas (GHG) emissions per unit of output) for a given product or activity. Facilities that emit less than their emissions limit earn surplus credits they can sell or save for later use. Facilities that emit more than their annual emissions limit must provide compensation for the excess emissions by a prescribed deadline.
“By allowing facilities to generate and trade surplus credits for reducing their emissions below the limit, the OBPS ensures that the incentive to reduce emissions created by the carbon pollution price applies to every tonne of emissions from industrial facilities.”
As such, the OBPS is a concession to large-scale fossil-fuel intensive businesses, likely the result of lobbying.
For example, New Brunswick Green Party Leader David Coon suggested lobbying was behind Ottawa’s switching of the pricing cap in 2018 to have it where “natural gas stations face carbon taxes on emissions above 370 tonnes, oil on emissions above 550 tonnes and coal above 800 tonnes, a major concession to coal plants,” which ran against prior commitments from the Liberals to incentivize coal plants switching to natural gas.
These price allocations make little sense when it comes to combatting climate change when considering that coal is the “dirtiest” fuel source when it comes to GHGs, accounting for 0.3 of the 1-degree Celsius increase in average global temperatures. Burnt coal emits nitrogen oxides which beyond creating visually impairing smog and haze is a major contributor to respiratory illness and lung disease including cancer.
It’s interesting to see “coal concessions” considering the fearmongering that Conservatives project onto carbon pricing.
However, this brings up another issue: do Conservatives have a plan to deal with climate change?
Poilievre is running a campaign on getting the government out of the way, but with regulations and government out of the scene there will simply be no market-oriented solution to climate change, and if there is it will come too late as capital is always focuses on what’s profitable in the short-term.
Without regulation and government planning, it will essentially be a rigged game of chicken between the major GHG-emitting industry giants: instead of their C-class employers and investors standing on the tracks waiting to see if their competitors will jump out of the way of the train of climate catastrophe first, it will be people like their workers who can’t financially shield themselves from the effects of climate catastrophe — extreme weather events, mass immigration, ecocide, famine, war — standing on the tracks.
The point is that the train in this metaphor only comes because GHG-emitting capital is constructing the rails and choosing to mutually commission the train at the expense of the majority of us.
While the carbon tax is not the royal road to sustainable energy consumption, it’s a push in the right direction. Conservative hyperbole around the tax’s negative impact is simultaneously a cover-up of their lack of plans to combat climate catastrophe and their stabbing the average Canadian in the back because of incumbent business interests who are their real party base.