Ted Falk has a column in the Carillon that’s supposed to be about keeping the people in Provencher informed about what’s going on in Ottawa and how it will affect us. Unfortunately, it reads like a political ad campaign. These days, that means an attack ad.
Ted’s latest column is titled “Carbon Tax?“, but it contains no actual information about any proposed carbon taxes; instead, he brings up the subject as a pretext for talking about Justin Trudeau. He attacks Trudeau for saying “Canada needs to have a price on carbon,” but neglects to mention that Trudeau is late to the party: scientists, economists, and politicians from around the world have been proposing carbon taxes for years, even decades, and it was a major part of the Green Party of Canada’s platform long before the rise of Trudeau. It was even part of the Liberal platform long before Trudeau became leader. So let’s get past the political mudslinging and actually talk about a carbon tax and the effects it could have.
First, what is a carbon tax? Simply put, a carbon tax recognizes that carbon emissions actually cost us – in environmental damage and climate change (and all of the dangers associated with them), and in health care (which is the biggest government cost), just to name a few. Currently, we’re not paying for carbon emissions; this is what economists call an “externality”, which is when we’re able to push costs out of the equation (or “externalize” them), leaving them to be paid later or by someone else. To put it differently, we’re letting our children or our grandchildren pay for what we’re doing now. Trudeau’s statement, then, that we need to have a price on carbon, is true. It’s the same thing as saying that we need to clean up our own messes, that we need to pull our own weight, or that we need to be accountable for the real costs of our lifestyles and economic choices. This is not complicated economics, it’s a straightforward question of taking responsibility for ourselves. A carbon tax gives us the ability to do that by taxing carbon emissions, usually by taxing fossil fuels (which is where carbon emissions come from).
So gas prices will go up with the addition of a carbon tax. The province of British Columbia has had a carbon tax for several years now, and they haven’t noticed a big hit to their economy as Ted suggests we all would. What they have noticed is that people drive less. That’s good news, and exactly the kind of change that a carbon tax aims to bring: people think twice about driving, and get more efficient with their trips. People carpool more, or choose to tele-commute, or work closer to home (or live closer to work). These changes are good for us socially and environmentally, and the revenues raised can be dedicated to dealing with the damage we’ve already done and working against the developing climate crisis.
Of course, a carbon tax would also raise the costs of most consumer goods. Ted mentioned that it would make farming more expensive, and that’s true; farming is one of our biggest sources of carbon emissions in Provevncher. It would also affect other industries. I’m a second-generation truck driver, and my grandfather worked in rail transport; I know that everything you own came to you on a truck or a train, or both. An increase in the cost of transport will lead to higher prices on virtually everything. But once again, this will have an effect on our behaviour as consumers: things that have traveled further will have a higher price, reflective of their higher carbon footprint. This will encourage us to buy locally and bolster the local economy, while at the same time making us less dependent on oil-intensive transport industries whose costs go up and down with oil prices.
Even so, a carbon tax would cost people more. Ted’s right about that. But what Ted failed to mention is that a carbon tax like the one that the Green Party has been proposing for years would replace income tax. So while our goods would cost more and our gas would cost more, we’d have our entire paycheck each month to pay for it, not just our after-tax earnings. With more income to work with, Canadians have more choices that allow them to keep more of their earnings. Want to avoid gas taxes? With the extra money you have from not paying income tax, you can either a) afford to pay those taxes at the pump, or b) afford a new electric or hybrid car that requires less gas altogether! A carbon tax actually allows Canadians to make more responsible and progressive decisions that will make us all better off immediately, and especially over the long run.
Ted also said that a carbon tax would make us less competitive on the global market, and drive businesses to other countries, “killing jobs.” That’s the same logic that has led this current government to repeatedly cut corporate taxes, so that Canada has one of the lowest corporate tax rates in the developed world. Our cuts in corporate taxes have not led to corporations re-investing their savings into our economy and creating more jobs; rather, they’ve been sitting on that money for years, or awarding it as bonuses or as part of ever-increasing CEO salaries. Lowering business taxes has not led to more jobs, and adding a new tax will not change the fact that Canada has a market of over 30 million customers and one of the most stable economies in the world, making it a great place to do business.
I think, and I’m far from alone on this, that a carbon tax makes a lot of sense and would be good for us individually and good for our economy. I’d be happy to be proved wrong, if there are better alternatives. Ted Falk has missed a great opportunity to actually talk about a carbon tax and its potential to change the way Canadians are taxed, and change the way we spend our money, for better or worse. Instead, he’s chosen to use it as a platform to try to make us scared of Justin Trudeau. We should expect better from someone elected to represent us and make decisions on our behalf.
What do you think about the way that we’re taxed? Should we tax goods (income, goods and services), or bads (pollution, cigarettes and alcohol, garbage, etc.)? I’d love to hear from you!