ottawa –
Canada’s air pollution bill is supposed to help combat global warming, but as its fifth anniversary approaches, there has never been a hotter moment in Canadian politics.
Conservative leader Pierre Poièvre has successfully convinced Canadians that carbon prices are to blame for inflation, earning him the grudging respect of Prime Minister Justin Trudeau for his “abolish the tax” campaign. There are so many.
Of course, Prime Minister Trudeau disagrees with Poièvre.
But he believes the Conservative leader’s message will not work in an atmosphere where the cost of living dominates discussions at most dinner tables, as has been the case for months, if not years. admitted that it was.
Prime Minister Trudeau is convinced in October to extend his signature climate change policy to a three-year exemption from heating oil after persistent pressure from the Atlantic Caucus and plunging approval ratings in East Cost polls. Was.
There are several arguments for this move. Carbon pricing was designed to increase the reason to switch to greener fuels, since heating oil costs four times as much as natural gas, but the incentives already existed.
But the response was swift. Premiers in other provinces immediately called for similar treatment for natural gas, which is more prominent as a heating source in areas outside of Atlantic Canada.
Saskatchewan Premier Scott Moe has promised to end the federal government’s carbon price in January.
The Northwest Territories’ new premier says fuel has been so expensive in the north for too long that people would have already switched to it if there was an alternative, calling for a complete exemption from carbon pricing for local communities. requested.
And First Nations in Ontario have filed a lawsuit claiming they are excluded from the carbon price rebate program because they can only receive it if they file federal income taxes. Many of those serving in the Reserves are not.
Meanwhile, a Conservative private member’s bill to exempt natural gas and propane used on farms from carbon prices attracted attention because Poilievre had made it a priority to pass it.
Bill C-234 passed the Senate in mid-December and had to be revoted in the House of Commons with several amendments.
As amended, the bill would be limited to a temporary exemption for propane used to dry grain. If passed with support from the Conservative Party, the National Democratic Party and the Bloc Québécois, which voted in favor of the bill for the first time, the new exemptions would be in place.
All this makes it clear that the carbon price conflict will continue until 2024.
Prime Minister Trudeau is adamant he has no intention of opening the door to further exemptions.
The Liberals intend to work with First Nations to make the rebate system work better for them, and to discuss possible adjustments with the Northwest Territories. But the Prime Minister said there would never be any further carve-outs.
Michael Bernstein, executive director of the advocacy group Clean Prosperity, said he believes Trudeau.
“We do not anticipate that the current federal government will further dismantle or waive any programs that we have in place,” Bernstein said.
If Poilievre wins the next election, the consumer side of carbon pricing will surely disappear as quickly as he puts pen to paper.
“Mr. Poièvre’s position on this issue is very clear,” Mr. Bernstein said.
But carbon pricing is a complex policy, and involves more than just fuel taxes on gas stations and home heating bills.
Poièvre’s “abolish taxes” mantra leaves it unclear exactly how much of the plan he would eliminate. He expressed openness to preserving some form of industrial carbon pricing.
The consumer carbon price, or what Ottawa calls the fuel price, applies to the fossil fuels people buy to run their cars, heat their homes and keep the lights on.
Large industrial emitters, including more than 560 organizations and companies including oil sands, mines, automakers and natural gas power plants, do not pay carbon prices for the fuels they buy to operate. Instead, they pay based on a portion of the amount they actually emit.
The system is similar to one planned by former Conservative prime minister Stephen Harper but not introduced in 2007.
In both versions, companies that emit above the set limits pay a price.
Most economists agree that carbon pricing is the most effective way to reduce emissions, and business leaders generally prefer carbon pricing.
“From an economist’s perspective, this is the most efficient way to reduce emissions with the least amount of government intervention, mandates or regulation,” said Heather Exner-Pillow, special adviser on energy policy at the Business Council of Canada. It’s not too much,” he said.
“It’s just focused on emissions. And if you can reduce your emissions, you pay a lower price. So it’s very simple. Pick your favorite, pick a sector. There is no. We leave everything to the market. Work.”
The Liberals have introduced both carbon pricing and regulation, and in some cases those policies can conflict with each other.
Exnerpilot said companies would generally prefer carbon prices alone because the regulations are more prescriptive and typically more costly to implement.
Climate change comes at a high cost, but the policies that address it also come at a cost to businesses and families.
Harper himself acknowledged this in 2007, saying in an interview with the Toronto Star, “We can’t reduce greenhouse gases, and we can’t force them, without incurring some short-term economic cost.” Ta.
Currently, consumers pay about 14 cents per liter of gasoline and 12 cents per cubic meter of natural gas in carbon price. They’re getting their money back through rebates the Liberals call “climate action incentives.”
90% of carbon pricing revenues are returned to households in this way, with the remaining 10% going to climate subsidy programs for small businesses, schools, hospitals, and other government agencies.
The rebates aim to prevent most households from losing out on carbon pricing, while leaving them with an incentive to reduce their fossil fuel consumption and save more. No matter how much fuel you use, people get the same amount.
According to the Parliamentary Budget Office, if the carbon price reaches $170 per tonne in 2030, the average Canadian household will get $388 more in rebates than it pays in carbon pricing. Low-income households that pay less for fuel will benefit even more.
Much of the burden will fall on small and medium-sized businesses. Even if small businesses pay a carbon price, they can still apply for subsidies to reduce emissions but receive no rebates.
The Canadian Federation of Independent Business estimated in March that small businesses would pay out nearly half of the total revenue collected from carbon prices, with most of it going back to consumers.
Abolishing carbon pricing would reduce incomes for the vast majority of households and could have major international consequences.
Europe is likely to start imposing border adjustments and import taxes on goods from countries that do not have a minimum carbon price.
“This needs to be considered,” Bernstein said.
“For Canada, our ability to maintain the international competitiveness of our exports may depend in part on whether we have an effective carbon pricing program.”
However, he acknowledged that this is difficult domestically.
A Leger poll conducted by the Canadian Press in September found that while nearly three in four respondents were worried about climate change, only a few would be willing to change their behavior if it meant some cost. Only 2 out of 5 people said so.
Bernstein said support tends to increase when Canadians are asked more specific questions explaining the carbon rebate program, adding that the federal Liberals have been bad at communicating about the program.
The confusing-sounding “climate change incentives” were initially included as a line item on tax returns. It will now be paid out as quarterly direct payments, similar to those for families of young children, the elderly and people with disabilities. However, many still do not understand what it is.
Mr Exnerpillow said the constant political battle over whether carbon pricing is maintained is harmful because it reduces predictability.
But even if voters elect leaders who dismantle the system, companies will continue with their own climate change plans, although the timeline could change once carbon pricing and regulation are gone, he said. she stated.
He said that regardless of what the Conservatives do or don’t do, “they are committed to tackling climate change in their business plan to shareholders”.
“But they clearly intend to do it in a way that works for the business and remains competitive and profitable.”
This report by The Canadian Press was first published Dec. 31, 2023.