Doug Ford will give us the carbon tax we never had

Doug Ford will give us the carbon tax we never had

The Toronto Star, By Martin Regg Cohn
Published June 15, 2018


The carbon tax is dead. Promise kept.

Just one problem — Ontario has never had a carbon tax.Now, thanks to Doug Ford, we may be about to get one.When a beaming Ford boasted to reporters Friday that “the carbon tax’s days are numbered” in Ontario — counting the days to his swearing-in as premier on June 29 — he was playing with words, as politicians do, whether or not they’ve taken the oath of office.

No, there is no carbon tax. Yes, Ontario has had a “cap-and-trade” system that put a price on carbon since 2017 — not by taxing people, but by making companies pay for spewing greenhouse gases into the atmosphere.

Far from killing a (non-existent) carbon tax, Ontario’s incoming Progressive Conservative government is laying the groundwork for a brand new carbon tax of its own making. That’s because, as Ford’s very own Ontario PC Party acknowledged last year, Ottawa fully intends to impose a carbon tax in any province without a plan to fight global warming.We live in interesting times when a U.S. president can unilaterally declare peace with a North Korean dictator while declaring war on a Canadian prime minister. Now, taking a page from Donald Trump, Ford is serving notice that he too is ready to do battle with Justin Trudeau.

Ontario’s incoming premier has set aside $30 million to fight a losing legal battle over Ottawa’s undisputed right to regulate the environment with carbon pricing. Virtually all legal and constitutional experts believe the federal government has an airtight case. But even if Ford’s Tories believe they have a stronger case, shouldn’t they level with the people of Ontario about the risk of losing in court?Litigation, like politics, is inherently unpredictable. You can’t prevail in the Supreme Court of Canada merely by repeating campaign slogans.That’s not leading the way, it’s misleading all the way.Until Ford became leader in March, the Progressive Conservatives had fully accepted Trudeau’s carbon tax.

Now Ford is in charge, but on Friday he still couldn’t answer basic questions about his party’s reversal, such as:Will your government fully reimburse companies that have already paid more nearly $3 billion at auction under the terms of cap and trade?While you wage war with Ottawa in court, will your government face lawsuits of its own from participants and organizers of previous carbon auctions linking Ontario to Quebec and California?

The bottom line with cap and trade is that it lowers the cap on greenhouse gas emissions every year. Business can then buy and sell (or “trade”) carbon allowances — effectively buying time until they find the most efficient ways to meet their obligations. It translates to about 4.3 cents a litre at the pump for motorists, a figure dwarfed by the ups and downs of global oil prices.Cap and trade sounds complicated, but it’s a market-based solution — you know, like the stock market — first proposed in the U.S. by Republicans and still embraced across party lines in California and Quebec. Revenues are allocated to energy-saving and pollution-reduction measures, from home insulation to mass transit — which Ford likes to mock, but how does he propose to change polluting behaviour?The default federal carbon tax (we repeat, Ontario never had one) doesn’t reduce the overall cap on emissions. It just raises money. But because politicians are reluctant to keep raising the taxation level high enough to deter polluting behaviour, it achieves far less for the environment.Ontario’s non-partisan environmental commissioner, Dianne Saxe, notes that “the net economic cost is less with the cap-and-trade system.”

By contrast, a carbon tax has “a much higher impact on both consumer bills and business bills.” No other jurisdiction in the world has gone to the trouble of switching from one system to the other, she adds.Yet that is precisely where Ford’s decision is destined to take us. 

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