The SNC Lavalin affair could fill this column every week but there’s life beyond the latest political scandal, so we’ll tackle the upcoming increase in energy prices courtesy of the Pan-Canadian Framework on Clean Growth and Climate – the federal carbon pricing plan aka the dreaded carbon tax (cue ominous organ music).
To believe the memes and slogans peppering the internet recently, we’ll all be one step closer to the poor house as a result of this blatant tax grab (sarcasm off). Provinces that didn’t already have some form of carbon pricing were given the choice to create their own system or default to the federal plan. Several provinces have already had some form of it; BC was a North American leader when it began levying $10/tonne more than a decade ago.
The federal plan starts with a levy of $20/tonne of CO2 equivalent emissions which is a standardized measure of the greenhouse gases (GHGs) that are released into the atmosphere from burning a particular substance. It will increase by $10/tonne/year until it reaches $50/tonne in 2023.
An average-sized coal fired power plant emits 4.6 million tonnes of CO2 annually. A small SUV produces about 5 tonnes in a year based on 20,000 km of mixed highway and city driving. Plenty of calculators are available to get some idea of your own carbon footprint. One such site is www.carbonzero.ca/calculate
Premier Pallister’s plan didn’t meet the federal criteria and so, beginning April 1st, Manitobans will see price increases on those products that emit significant quantities of GHGs as determined by the federal backstop plan. Gasoline at the pump will increase by 4.4 cents/litre. Other fuels will see increases as well. Hydro power itself is mostly emission free but consumers will see a pass through of costs such as the fuel used by MB Hydro’s fleet.
There’s no question that products and services will become more expensive depending on the degree to which their inputs are subject to carbon pricing. Groceries are mostly trucked in and the fuel to power those trucks will cost more, leading to some level of price increases of goods on the shelf. Someone providing agronomy services to farmers will need to factor the increased operating costs of vehicles into their services.
To offset the extra cost and to create an incentive to reduce usage of high GHG producing goods and services, most of the collected money will be returned to Manitobans in the form of a rebate paid at the time of filing their tax returns.
Called the Climate Action Incentive, the first adult in a household receives $170. A spouse (or the first child in the case of a single parent) in the same family gets $85 and subsequent children $42. A typical family of four would receive $339. An additional 10% or $40 in this example is paid to folks living outside of Winnipeg, recognizing the lack of alternative transportation options in rural areas. As the carbon price rises over the next few years, the rebates will increase as well.
The economic principle behind this sort of pollution pricing is sound. We see it everyday in the choices we make at the grocery store and in how we change our consumption habits. Consumers respond to costs and change their behaviour accordingly. Where the costs of carbon intensive products and services increase more than those that are less polluting, we can expect people will be encouraged to perhaps drive less, use public transportation more, buy more fuel-efficient vehicles, insulate their homes better, source more locally grown food, and the list goes on.
Farm fuel is exempted from the carbon tax. Other inputs such as fertilizer will experience varying levels of price increases. While the intent of the federal carbon pricing program is not to harm the competitiveness of sectors such as agriculture that need to deal in world markets, there must be ongoing discussions and efforts to ensure price increases don’t harm the livelihoods of our farm families.
The time for action was yesterday – actually it was twenty years ago – and we’ve squandered our short window of opportunity by not tackling this decisively. Prior to 2006, before Stephen Harper took the reins of government, Canada was a leader on the world stage. We punched above our weight, using persuasion and ‘soft power’ to bring other countries into agreements on reducing GHG’s.
The decade that followed recorded our shameful withdrawal from that role of honest broker. Instead, we became the only country to pull out of the 1997 Kyoto Protocol, the world’s first comprehensive attempt to get the countries of the world to cut emissions. We earned an embarrassing five-in-a-row Colossal Fossil awards along with a special Lifetime Unachievement Award at the annual United Nations COP climate conferences. That cemented our reputation for longstanding failure to make meaningful contributions and, in fact, blocking and stalling progress.
It was hoped that the Liberals would reverse this dismal period of inaction and outright hostility to proposing and implementing serious efforts. Trudeau’s record is a mixed one at best. The Pan-Canadian Framework on Clean Growth and Climate is far from adequate but at least it’s a first step. We’ll improve on it if Doug Ford and Scott Moe and Brian Pallister and Jason Kenney don’t torpedo it first. Unfortunately, human nature is such that it’s much easier to be against something than to propose real solutions, especially when you can score easy political points with misleading slogans like “it’s just a tax grab.”
We’ve proven that we can take on monumental problems. The 1991 Canada-US acid rain treaty tackled the cross-border damage from factory air pollution in both countries. The Montreal Protocol of 1987 phased out the chemicals causing a thinning of the ozone layer that protects the earth from harmful radiation. All countries of the world signed on.
Canada can and should be a world leader and as all good leaders know, setting an example is one of the most effective ways to convince others to follow. To those adamantly opposed to pricing pollution, I would ask what their plan to tackle climate change is. If their solution is more inaction: questioning the science, putting the burden on the market or industry to come up with solutions, or waiting for other countries to sign up, then we’re very likely leaving our children and grandchildren a climate debt of such enormity, that they cannot hope to pay it off.
This ‘carbon tax’ or any other isn’t the answer by itself, but it’s part of the solution. Paying for what we put into our shared atmosphere seems like a good place to start. Those who choose to emit less GHGs will be rewarded. Sounds like something we could support, doesn’t it?