Tom Mulcair: Trudeau in a tailspin as his carbon tax blows up
Justin Trudeau has been juggling the climate change file since he took office. After eight years of twirling, there were just too many parts in the air at the same time. It’s now come crashing down and no one who understands the complex issue is really surprised.
There are different tools in the public policy toolbox to deal with dangerous emissions.
You can take a strictly regulatory approach, saying that certain emissions and substances are banned. That’s the essence of the Montreal Protocol, adopted internationally to deal with substances that had been depleting the ozone layer. Chlorofluorocarbons (CFCs) were forbidden outright.
There have been a couple of instances of cheating but, overall, the CFC ban has held and the hole in the ozone layer is repairing itself.
You can opt for a “cap-and-trade” system where a ceiling is put on certain emissions. Companies that haven’t been able to reduce fast enough can purchase emission credits in a type of stock market from companies that have credits to spare.
The best North American example of a successful “cap-and-trade” system is the one that Canada and the U.S. put in place to deal with acid rain. There, the main culprit was sulphur dioxide, SO2 which, when combined with water, resulted in sulphuric acid-laced rain sprinkling on our forests.
Big companies such as the Sudbury Nickel giant (called Inco at the time) had refused to install scrubbers in their chimneys. When it was going to cost more to buy SO2 credits, they finally acquiesced. It worked and acid rain was largely overcome by a smart system that was enforced. Smart because it can guarantee a result.
A carbon tax is supposed to do the same thing, reduce emissions. In the case of the fight against climate change, the principal culprit is CO2, which is a greenhouse gas (GHG) that holds in sunlight and heat. The problem is, a tax can’t guarantee a result unless the levy on things such as carbon, which produces GHGs, is very, very high.
That’s the idea that had been adopted by Joe Biden in his successful 2020 U.S. presidential election campaign. Modelled on a proposal backed by today’s U.S. Treasury Secretary Janet Yellen, it was first put forward by two very senior former Republican politicians, James A. Baker III and the late George P. Shultz. It called for a hefty carbon tax with rebate cheques to families.
TRUDEAU CAUGHT IN A BIND
It’s very similar to Trudeau’s carbon tax proposal. The big difference is that once he came to power, Biden failed to put it in place. Quite the contrary, there was in fact a massive increase in the amount of coal being burned in the U.S. to produce electricity.
Biden changed horses midstream and abandoned his carbon tax in favour of a massive government spend to transition the economy. Carbon tax out, Inflation Reduction Act in…
Trudeau was caught in a bind and in a lie. The bind was the simple fact that Canada wasn’t in a position to match the American mega-spend. The lie was the line he and his ministers kept repeating: that the rebate cheques to families would make his carbon tax neutral for them. The Parliamentary Budget Officer debunked that claim and proved that the carbon tax was (wait for it…) a tax! One that would weigh on the already inflation-strapped budgets of average families.
The Liberals have won three consecutive elections posturing on climate change while finger-pointing at the scary Conservatives who were, in their telling, climate change deniers. Problem is, the Liberals have never gotten it done under Trudeau (Paris Accord) any more than they did under Jean Chretien or Paul Martin (Kyoto Protocol). In short, they didn’t have to, they only had to appear to care more than the Conservatives, and the trick was done. People who cared about future generations saw the Liberals as the better option.
The problem with the Paris Accord, however, is that it requires regular filings about things such as agriculture and, most importantly, forest fires. Canada has totally blown any possible CO2 budget with last summer's horrific and widespread wildfires. Trudeau’s carbon tax wouldn’t change that equation.
What Trudeau didn’t realize, as he rolled out the most recent increase to his carbon tax last summer, was the depth of the organized resistance among certain Atlantic premiers, the formidable Tim Houston of Nova Scotia, first among them. Average folks were in full revolt. Liberal MPs in the Atlantic region were in panic mode.
Trudeau reacted precipitously and with very little thought about possible consequences of his reversal.
First, he only announced a pause of three years of the carbon tax on home heating oil. That was like putting a sandwich sign on his poor MPs saying: whatever you do, don’t vote for me because we’re still planning to hit you with our carbon tax if we come back.
Second, the millions of Canadians who consider the fight against climate change to be a priority were crestfallen. Trudeau had abandoned his key promise to them and they weren’t amused.
Third, and this was the easiest part to predict, Canadians who heat with fuels other than furnace oil (like natural gas in Ontario) were furious. Natural gas, much less polluting than furnace oil, was going to be taxed but furnace oil wasn’t? Where was the fairness in that?
NDP Leader Jagmeet Singh and his troops voted with the Conservatives to ask for fairness. It must’ve been a bit of a balm on his wounds suffered in the last election. Very senior environmentalists had been press-ganged into criticizing Singh’s climate plan and supporting Trudeau’s abracadabra. Singh wisely refrained from saying "I told you so," but I guess he’s allowed to think it!
SPECTACULAR CRASH AND BURN FOR TRUDEAU
This has been such a spectacular crash and burn for Trudeau that it’s hard to see how he can ever regain any credibility with Canadians who care about the fight against climate change.
That might provide an interesting opening for Mark Carney, who’s been waiting in the wings.
Carney has immense credibility in the climate file and has worked on the issue at the highest level. Unlike Freeland, he doesn’t have to carry the baggage of having sat at Trudeau’s cabinet table.
Carney already had more credibility on economic issues than anyone in the Liberal ranks, the ability to also speak to Canadians who worry about what we’re leaving to future generations would give him an impressive calling card.
This season’s snow has already started to fly. A lot of Liberals must be thinking that it’s about time for Trudeau to take that walk.
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