Pay me now or pay me later - From the Cluttered Desk with Keith Roulston

Whether it’s in the U.S. or, recently Canada, there is much talk about federal elections; a little more than a month away in the U.S. and just about any day in Canada after the NDP withdrew its support from the federal Liberal government.

 

In the U.S., the results remain in doubt with 80 million voters stubbornly sticking with Republican choice Donald Trump, despite several convictions in court and more defeats possible in cases his lawyers have managed to postpone until after the election while he hopes to win and, as president, make the cases go away.

 

Here in Canada, there seems to be no doubt, according to multiple polls, that the unpopularity of Prime Minister Justin Trudeau will see a Liberal defeat and a new Prime Minister in Conservative leader Pierre Poilievre. 

 

But how closely do Canadian voters study Poilievre? He has relentlessly attacked the government’s carbon tax, saying he will drop the tax as an early measure.

 

Writing recently in The Globe and Mail, columnist Andrew Coyne called out the Conservative leader. “But Mr. Poilievre saw through the public. He understood that the public are deeply, almost perversely, hypocritical on this as on most things: they want something done about the climate but they want someone else to pay for it. Or, perhaps: they are prepared to pay for it, if they have to, but they want to be lied to about it.”

 

There is no doubt that the Prime Minister and his government undermined their own argument for the tax, when they curried 
favour with voters in Atlantic Canada by exempting their home heating oil from the tax, leaving other Canadians to question 
why they should pay tax from which their eastern neighbours were exempted.

 

There is also no doubt, Coyne says, that the government has not managed to get through to the public on a consistent basis how the tax works. It uses market forces to convince Canadians to reduce their pollution that is causing climate change. We pay a tax, increasing the cost of a tank of gas or furnace oil, but to offset that we receive a quarterly grant that, for most of us, exceeds the money we pay. 

 

But most of us don’t see the refund, which is quietly deposited in our bank accounts, but we do see the extra tax on a tank of gas. The average person still gets back more than they spend, but people who drive more miles or whose home inefficiently uses heat, pay more. (To be clear, because I’m retired and don’t drive much, I come out ahead. Two of my daughters, who drive miles to work, no doubt pay more than they receive.)

 

But as Coyne says, “Even though the policy is well designed overall, the federal government has failed in terms of explaining it to Canadians. Most people, for example, don’t know they are getting quarterly rebate cheques that, for the vast majority of 
them, fully offset the impact on their monthly budgets. And many of those who notice the cheques don’t see why they make sense, even though the carbon price still incentivizes them to reduce their own emissions.”

 

Meanwhile, many opponents of the tax conveniently forget the rebates and make it appear as a tax that simply increases our cost of living. But people like Poilievre don’t propose any alternative to reduce the amount of carbon we are putting into the air, causing forest fires in northern Canada and giving southern Canadians such polluted air that many will be sick.

 

“Though opposition to carbon pricing is certainly legitimate,” Coyne writes, “any serious political opponent surely needs to state their preferred alternative. But it’s pretty quiet on that front. It almost makes you think they don’t care about climate change.”
And in some cases, they don’t. Electors in Alberta and Saskatchewan that provide oil and natural gas to the world think only of the short-term benefit they receive: the jobs and taxes.

 

Many consumers, even in eastern Canada, don’t want the good things they enjoy, like overseas vacations, to end. Let’s just go on the way we are and let our grandchildren solve the problem. 

 

Coyne lays out the arguments. “First, carbon pricing costs a lot less than alternative policies, even though the high costs of those alternatives tend to be hidden.

 

“Second, carbon pricing creates incentives for innovation, as the incentive urges technological innovators to seek ways to reduce the cost of emissions.”

 

And finally, Coyne argues, carbon pricing works. “Carbon pricing has already reduced emissions in B.C. and Quebec and other jurisdictions that got a head start. It’s working today in the rest of Canada, and it will have even more impact in the future if we let it rise over time, as planned.”

 

Will we stick with it, or bail out?