A climate-change plan that hides the cost of fighting climate change

By Christopher Thompson

Conservative Party Leader Andrew Scheer released his climate-change plan on Wednesday. Given that he has made the Trudeau government’s carbon-pricing regime a daily target for criticism, his plan invites examination.

It begins with a straightforward statement: “Canada’s Conservatives recognize that climate change is real and evidence from around the world clearly shows that there is a global warming trend.”

But how to fight it? To meet the greenhouse gas emissions cuts that Canada committed to in the Paris Agreement – that is, to reduce emissions by 30 per cent below 2005 levels by 2030 – Mr. Scheer would take a very different tack than the Trudeau government.

If elected, he would scrap the federal carbon tax, which is in effect in four provinces and will start to be collected in Alberta in January, and use regulatory means to encourage major industrial polluters to keep their greenhouse gas emissions at levels that will reduce Canada’s overall emissions.

Companies that exceeded those levels would be obliged by the government “to invest in research, development and adoption of emissions-reducing technology related to their industry.” The amount they’d have to invest would rise with every tonne of emissions that exceeded the set limit.

As well, Mr. Scheer would bring back a tax credit for homeowners who “try new energy-saving products and technologies.” The two-year program would allow people to save up to $2,850 a year on renovations.

And that’s pretty much it. The rest of the plan is devoted to developing green technology in Canada with the help of tax incentives, and to pursuing the aspirational goal of exporting that technology around the world. There is also something about looking into possible regulatory changes to reduce emissions in the cross-border trucking industry.

“Green technology, not taxes” is the plan’s motto. By taxes, the Conservatives mean the federal carbon tax. They argue that the tax, which raised the price of a litre of gas by 4.4 cents when it was imposed this year in Ontario, is a naked government cash grab that kills jobs and hurts working people.

But that claim is misleading and only works if you do as the Conservatives – as well as provincial conservative parties – have done and deliberately ignore the fact that the carbon tax on fuels is revenue-neutral for individuals. Most Canadians will get more money returned to them in the form of income-tax deductions than they will pay in carbon taxes at the pump or on their home heating bill.

The carbon tax is a transparent way of getting individuals and companies to reduce their fuel consumption by raising prices. It’s a regime that is working well in British Columbia, where the economy is thriving. It has also been effective in Quebec, in the form of a cap-and-trade regime, and Quebec’s economy is also strong.

Mr. Scheer won’t admit this but his plan would raise costs for Canadians, only in an indirect and opaque way. Companies that exceeded emissions limits would be forced to spend money on greening their businesses, costs they would pass on to customers through higher prices.

As well, the government would have to spend money to monitor compliance.

It’s all very odd. The Conservative Party wants to increase government intervention in the private sector and increase the size of government, in order to fight climate change, while the Liberal Party is the one that wants to use the market and price signals to accomplish the same thing.

The Conservatives are for feel-good government coercion that creates hidden costs; the Liberals are for a revenue-neutral, transparent tax that lets the private sector and individuals decide what is in their best interests. It’s supposed to be the other way around, people.

Mr. Scheer’s plan is basically designed for the voter who is worried about climate change but doesn’t want to know he or she is spending any money to fight it. The carbon tax doesn’t fit the bill, because voters can see the cost of a litre of gas go up. The Conservative climate-change plan, on the other hand, will raise Canadians’ cost of living, but no one will be able to directly pin that on Mr. Scheer and his party.

The Liberal carbon tax is not perfect. For one thing, it will need to rise significantly in the coming years if Canada is to meet its Paris commitments. But at least it has the quality of being honest.