Political Messaging and a Carbon Tax

Premier-designate Ford has decided to take Ontario out of the cap-and-trade carbon pricing agreement with California and Quebec, without specifying a clear alternative. As discussed in an article (http://www.theglobeandmail.com/business/commentary/article-if-not-carbon-pricing-in-ontario-which-works-well-then-what-mr/) in The Globe and Mail by Beugin, Drummond, Hodgson, and Cappe on June 22, this destroys with the stroke of a pen almost $3 billion in cap-and-trade permits held by Ontario firms. Let the litigation begin!

The government-in-waiting says it will “come down heavy” on polluters. In addition to displaying grammar befitting a leader with a twelfth grade education, this statement of intent demonstrates obsolete thinking, likening greenhouse gas emissions to effluent dumping. The whole point about greenhouse gas emissions is that we are all polluting, whenever we drive our cars, fly in airplanes, or heat our homes and factories. We are all part of the problem.

When the province reduces gasoline and other taxes by virtue of opting out of cap-and-trade, the federal government has the power to impose a revenue-neutral carbon tax on Ontario consumers. I urge the federal government to do just that, and do it with maximum political impact.

It should impose a tax, calculate how much will be collected, and then rebate the total on a per-taxpayer basis. This is progressive, because a lump sum per taxpayer represents a greater percentage of income for lower income taxpayers than higher income taxpayers. As a lump sum, it is also not notionally tied to carbon emissions and therefore does not reduce the incentive to reduce emissions.

In publicizing it, the Trudeau Government should steal a page from the Harper Government’s book, by sending every taxpayer a letter explaining how the Ford Government’s termination of cap-and-trade increases greenhouse gas emissions and why the carbon tax compensates for a bad policy decision (“a negation of a negation”). The letter should also make the point that if we succeed at reducing emissions, the amount collected, and hence the per-taxpayer rebate will decrease, but we will be leaving a more viable planet to future generations. If the government wants to be dramatic, it would enclose a cheque. If it wanted to be efficient, it would simply make an e-transfer at the same time it sends the letter.

It’s time to take on Ford’s version of climate-change denialism. The letters should be in the mail by Labour Day, at the latest.

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