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Stephen Staley: Bring on the carbon tax election 

Commentary

Conservative Party Leader Pierre Poilievre at a press conference in Ottawa, Aug. 29, 2024. Patrick Doyle/The Canadian Press.

Joe Biden was elected in 2020 with a single, dual-prong mandate: occupy the Oval Office and not be Donald Trump. On that core mandate, he was wildly successful. He achieved his lifelong goal of becoming president and averted (at least temporarily) Trump’s second term.

Being a lifelong politician, however, Biden had long idolized Franklin Delano Roosevelt and soon declared his ambition to be the most consequential president since FDR, the longest-serving president in the history of that great republic.

The problem of course was the inherent gap between his actual mandate and his own interpretation. Swing voters—those who decide elections—had effectively voted against Trump, not affirmatively for Biden.

Elections have consequences as it’s famously said. No one disputes that. Controlling the levers of power matters. But as in the case of Biden, sometimes politicians desire to be far more consequential than voters actually want them to be. They can misinterpret their mandate and get themselves into eventual political trouble. So much so that the U.S. now seems on the precipice of possibly doing what Biden was supposed to stop: re-electing Donald Trump.

Which brings us to Justin Trudeau. Elected in 2015 with a mandate to emit cool vibes, run modest deficits to theoretically grow the economy “from the heart outward,” and make Canadians feel better about their environmental contributions with a modest carbon tax, Trudeau in hindsight entered office with an inflated sense of his mandate.

He was soon running large-scale deficits, raising the carbon tax far beyond what he promised, and carrying out an economic strategy consisting of low-cost labour and deficit-finance corporate subsidies. This was not the modest plan to provide a stronger economy, competent management, sweet vibes, and a radically improved environment with no corresponding negative impacts on Canadians. This was something far different.

One could argue (I certainly would) that on any of these conditions, the Trudeau government has been a failure. That said, as the lovely editors at The Hub breathe a sigh of relief, I won’t litigate all of its failures…neither you nor I have that much time on our hands here.

So let’s just pick perhaps the most consequential: the carbon tax.

As Sean Speer recently pointed out, the original carbon tax promise from Trudeau was deliberately vague, and even as recently as 2019, the Environment minister at the time promised the cost wouldn’t rise above $50 per ton. Today it sits at $80 with a plan to increase it every single year until it hits $170 per ton by 2030.

No one voted for that.

Even if you accept the premise that part of the mandate the Trudeau government received from Canadians included some kind of “price on carbon” it was a narrow mandate that contained conditions. It must leave Canadians with more money in their pockets. It would have an impact on climate change. It has not. It has failed both those conditions.

Now, even today the government claims that every hike to its carbon tax leaves nearly every Canadian with more money in their jeans each month. Yet the Parliamentary Budget Office has demonstrated it’s not true. Depending on where one lives, there are losers up and down the income distribution. Put differently: the carbon tax inflicts pain on Canadians and the Canadian economy far beyond anything Trudeau promised.

The government acknowledged as much when it exempted home heating oil from its carbon tax last year. That move was a desperate attempt by the prime minister to placate his Atlantic caucus, but it wasn’t just about crass politics. It was an admission that the notion tax made people richer was obviously nonsense.

The government itself acknowledged a $25 billion hole in Canada’s GDP as a result of the carbon tax, in addition to the PBO’s assessment that the average Canadian household pays more under the carbon tax.

Over the past few years, as the crater in the Canadian economy grew larger and the promises of Trudeau’s carbon tax rang hollow, Canadians began to voice their displeasure. And for good reason. There were over 7 million visits to Ontario food banks last year. Every year for the past three years have been record-breaking visits for food banks across the country. Ontario now has over 1,400 tent encampments. There are 35 in Halifax alone. GDP per capita hasn’t grown in several years. The grim economic data is voluminous and well-reported here at The Hub.

As painful as the carbon tax is today, it’s barely begun its eventual quadrupling, on its way to the equivalent of 61 cents per litre of gas. In spite of all the evidence of the carbon tax’s failure and the loud and growing objections from Canadians, the government is determined to keep increasing it. Every April 1, the carbon tax goes up. A very unfunny joke on Canadians.

The prime minister’s determination to keep jacking up the cost of his carbon tax in the face of obvious failure and overwhelming opposition seems nearly religious in its fervour. You could credibly argue that Trudeau believes in his carbon tax more than anything else. He seemingly believes in it more than his own self-interest.

To return to where we started, in his determination to proceed with quadrupling a tax that Canadians overwhelmingly oppose, the prime minister is mistaking being elected with a broad endorsement of all of his most deeply held policy goals. Elected on a mandate to make Canadians better off, his carbon tax has done the opposite, and Canadians are paying the price.

Disagree with that assessment? There is a simple way to hash it out.

Put it to the people of Canada in an election campaign, and let them render their verdict on the efficacy of Trudeau’s signature policy. Academics, politicians, and columnists have had years to make the case for and against the carbon tax. Canadians have had years of living with the consequences, and are staring down the barrel of further massive increases.

It is long past time to move the debate around Trudeau’s carbon tax out of the halls of power and parliament and put it to the people of Canada at the ballot box. It’s time, as Pierre Poilievre has put it, for a carbon tax election.

Editor’s note: A previous version of this story stated that the carbon tax currently “sits at $65 with a plan to increase it every single year until it hits $130 per ton by 2030.” The carbon tax is currently $80/tonne, scheduled to increase to $170 by 2030. The Hub regrets the error. 

Stephen Staley

Stephen Staley is a Senior Advisor at the Oyster Group. He formerly served as a Bank Executive and as Executive Assistant to Prime Minister Stephen Harper. He lives and works in Toronto.

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