July 1 could be the beginning of the end of the carbon tax

EEver since Canada’s national media decided to cover the united conservative political campaign against the federal government’s introduction of a carbon tax as if it had a legitimate chance of success in the Supreme Court, there has been much misunderstanding about what a carbon tax is . The technical mechanism by which the government charges a carbon fee doesn’t matter as much as the game being played with Canadians’ general lack of citizenship knowledge. Or, as the Supreme Court said in its 2021 summary of the failed case to declare the carbon tax unconstitutional: “The majority noted that the term “carbon tax” is often used to describe the pricing of carbon emissions. However, they said this has nothing to do with the concept of taxation as understood in the constitutional context. As such, they also concluded that the fuel and excess emissions levies imposed by law were constitutionally valid regulatory levies and not taxes.”

In all fairness, an underrated failure in all of this is that our national media breathlessly covered this decision as anything other than a massive waste of taxpayers’ money.

Embarrassing.

Because our national media didn’t report it that way, not many people have any idea what the carbon tax is. And while we all fundamentally understand how punishing it will be on our car-dependent lives, we don’t understand who is to blame. Because the issue is complex and a lot of people will benefit from our mass misunderstanding. You should love the carbon tax. Very angry. Make sure you’re angry at the right people.

A Brief History of Carbon Fees in Canada

Alberta was the first province to pass legislation enabling carbon pricing in 2003. Ralph Klein’s Conservative government passed legislation it hoped would reduce emissions 50% of 1990 levels, or 87.65 megatons per year. The price of carbon in 2003 was $15 per ton (it will be $65 per ton on July 1, 2023). Alberta’s carbon policy has changed a lot since then, with legislation being amended, repealed, not enforced, or not written with enough enforcement mechanisms to change behavior. This is one of many complex reasons why Alberta is Canada’s most polluting province Today.

In 2007, Quebec became the first province to approve something called a “carbon tax”, and soon after, ExxonMobil came to support of it. At the time, ExxonMobil CEO Rex Tillerson told the media that he believed carbon taxation would be fairer, and he is quoted in The Guardian in 2009 as saying: tax strikes me as a more direct, transparent and effective approach.”

In 2014, a bunch of policy supernerds, including Paul Martin (former Liberal Finance Minister), Jim Dunning (longtime Alberta MLA and close to succeeding Klein), and Preston Manning (who founded the farther-right Conservative splinter party, the Reform Party) began Canada’s Ecofiscal Commission. This organization still exists to advocate for a price on carbon.

In 2015, Justin Trudeau was elected, promising to put a price on carbon, and did so for a few years later in 2018.

What is the point of a carbon tax?

Without a carbon tax, carbon pollution is free. If pollution is free, businesses that exist to make money will be incentivized to pollute. The history of carbon taxation is full of conservative policy thinkers, because until about 2018 it was the flagship conservative solution to climate change. For those too young to remember a time in Canadian politics when the Liberal and Conservative parties were still tied to their namesake ideologies, Conservatives loved a good market-based solution. And if the market says pollution is expensive, companies will find solutions that cost them less, so they pollute less. That is it. That’s the whole theory in a nutshell.

How theory meets real life is where the problems arise and where this debate gets complex. While the price on carbon is designed to solve climate change, it can only do so by punishing us. And this is only possible thanks to decades of political and economic choices that have prioritized profit and disposable consumption over sustainability. Pollution has been an invisible subsidy to Western economic growth, and we are now so dependent on this subsidy that even a small increase in our accounting by July 1, 2023 threatens to ruin us financially.

And while it is very tempting to blame Trudeau, Tim Houston or even Mike Savage, the truth is that our politicians as a class of people have been failing us for years, and there is no easy way out of this hole. Our society has been fiscally or environmentally unsustainable for over 20 years and it will hurt to get out of this hole.

The politics of carbon

“The overall trend between 1990 and 2021 has been an increase in greenhouse gas emissions [greenhouse gas] emissions,” reads a government of Canada website. While some sectors saw declines, the oil and gas industries stepped up their pollution game. And Canada’s largest year-over-year emissions growth sector in a single category is in transport, especially in trucks and SUVs. This is one of many fascinating failures of government regulation over the past 30 years that will eventually punish you at the pumps.

Over the past 30 years, American auto giants have deliberately pushed to produce and sell vehicles in the light truck category. The reason for this, according to former editor of Jalopnik And Road and rail, Bob Sorokanich, is due to the regulatory environment of car manufacturing in the United States. As he explained The War on Cars podcast, the safety and emission requirements for passenger cars were much stricter than those in the light truck category. No one thought about making passenger cars in the light truck category – instead automakers focused on the family mover of the passenger category: the minivan. Then automakers realized that the emissions targets weren’t as strict in the category of vehicles that were expected to be used only for work, so they started making pickups and SUVs and marketing them as family cars. This was considered good (for the car manufacturers) because of the higher margins possible from lower safety and environmental standards. And since Canadian politicians are often too cowardly to have regulations stricter than those of our largest trading partner, Canada’s personal transport emissions chart looks like this:

The reason the price of carbon feels unfair is that it *is* unfair. It is fundamentally unfair that government policies for economic growth and prosperity are supported by subsidizing pollution and monopolizing our transportation methods. It is almost impossible for us to safely move around our cities without a car. And one of the main reasons why there are no transportation options other than cars is because of our pattern of suburban development. Which should be great in theory, but in practice has given economic growth and prosperity to developers and left behind a tax base that cannot support sustainable municipal services. Which in turn has eroded the power of public institutions. And these patterns of unsustainability that are woven into all aspects of Canadian life have led to eroding the middle class.

At the end of this generation scam, we’re holding the sack and we’re all about to be hosed down en masse. All of our politicians are yelling at us that we should be mad at another group of politicians, but none of them are telling us how we’re going to stop using carbon. Or how we will reduce our dependence on carbon in the future.

The reason this should be scary is that either pollution has to become more expensive, or the climate is going to get worse. At the provincial and federal level in Canadian politics, there are no politicians putting forward comprehensive policy proposals or a plan for the future that is both achievable and sustainable. Cheap oil, cheap debt and cheap pollution have funded Canadian growth so far, and everything we do in Canada depends on those subsidies. The longer our politicians continue to fight for the carbon tax instead of telling us what they think society should look like without these subsidies, the longer we will remain in danger.