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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.

Mike Colledge: What happens after the Conservatives axe the carbon tax?

Commentary

Supporters of federal Conservative leadership candidate Pierre Poilievre in Ottawa, March 31, 2022. Patrick Doyle/The Canadian Press.

In November 2015, on the heels of a federal-provincial meeting and as a federal government delegation prepared for the COP 21 Climate Change Conference, Prime Minister Trudeau commented, “We’ll demonstrate that we are serious about climate change…making decisions based on science…reducing carbon emissions, including through carbon pricing…” 

A price on carbon was a key plank of the Liberal election platform in 2015, and again in 2019 and 2021. With the Liberals forming a government following all three contests, the policy’s existence seemed all but cemented into the Canadian economic landscape.

The logic seemed clear. A price on carbon for consumers is one of the most efficient ways to reduce carbon emissions according to both economists and environmentalists. The carbon price would be revenue-neutral. The science behind carbon pricing supported by the voices of experts was supposed to carry the day. Citizens would understand how the tax works, adapt their behaviours to minimize their carbon footprint, and ultimately support not only the carbon tax itself but also the transition to a greener economy that it would facilitate. All this while crediting the government that had the foresight to introduce it.

It was a simple and overly optimistic view of behaviour change. A view that lacked an effective educational campaign explaining how the tax would work or sufficient external supports to assist Canadians in making the changes they needed to make. Chief among them is the widespread availability of affordable alternatives.

Progress on climate change became secondary to scoring political points

The carbon tax was an effective wedge issue in the 2019 federal election campaign. But it never seemed to evolve from wedge issue to effective, supported policy. Since 2019, instead of focusing on persuading the majority of Canadians who are concerned about climate change of the merits and practical benefits of carbon pricing, pro-carbon price supporters devoted much of their energy to criticizing (and marginalizing) the small minority of climate change deniers. This divisive approach coupled with rising concerns over affordability opened the door for Conservative leader Pierre Poilievre’s promise to “axe the tax.” Canadians have rewarded this message with commanding polling leads for the Conservatives.

The price on carbon and the top values of Canadians today 

Ipsos’ 10th Global Trends Study covering 50 countries and 90 percent of the world’s GDP shows that the values of autonomy, health, self-reliance, and informed consumerism are the top values across the globe and for Canadians. The common link between these values is a desire for people to make informed decisions for themselves.

At its core, the carbon tax is about encouraging choice. Had the federal government communicated this purpose more effectively, perhaps people would be making those informed choices today. Instead, the launch of the carbon tax was first left to the provinces to implement, but with looming federal government penalties for any province that did not meet the federal standards. The ensuing federal-provincial discussions ensured that the public in many provinces came to perceive the carbon price as a top-down dictate rather than a collaborative effort to combat climate change.

When finally introduced, its low price per ton of carbon starting point and gradual, annual increases likely seemed like the easiest positioning for day one. Instead, the annual April 1st increase has become an ongoing reminder that the government is collecting more tax each year. At a time when 72 percent of Canadians assume that the government will do little for them in the future. It begs the question: “Why are my taxes increasing?” Follow-up attempts have been made to explain how the price/tax is revenue neutral, but they have fallen on deaf ears, enforcing the adage, “If you are explaining, you’re losing.”

The government’s popularity and the demise of the carbon tax

There have always been some concerns about the carbon tax. According to an August 2021 Ipsos poll for Global News, three-quarters (74 percent) of Canadians agreed that they would be more supportive of a carbon tax if they knew the money collected was going directly to initiatives to combat climate change. But the price on carbon has always been closely tied to the governing Liberal Party. Support for the carbon tax is influenced greatly by support for the federal government overall.

A recent study conducted by Ipsos for the Montreal Economic Institute shows that Canadians are generally dissatisfied with the federal government’s management of public spending with 70 percent indicating that the government is not doing a good job of ensuring that funds are allocated to priority issues. The study also shows that three-quarters (77 percent) say their taxes are too high for the services they receive. Recent polling and byelection results show the government’s low popularity and this is a contributing factor to the “axe the tax” momentum.

Ignore climate change and the environment at your peril

If Poilievre wins a carbon tax election and follows through on his “axe the tax” promise, will we all breathe a sigh of relief? Some of us might. It remains to be seen how those of us experiencing a heat wave, dealing with urban air pollution, or looking out at the smoke from the forest fires will react. They may well say to Poilievre, “We agree the carbon tax wasn’t making a difference, now what is your plan?”

Climate change and the environment are still a big concern for Canadians. Seven in ten (73 percent) agree that “we are heading for environmental disaster unless we change our habits quickly.” When asked about top environmental priorities, the public places climate change alongside several other pressing concerns, such as recycling, reducing waste, reducing the use of plastics, and improving air and water quality.See here, here, and here.

Canadians still want climate change addressed and are more likely to see it as a problem that governments and businesses must solve (versus themselves). As individuals, we fool ourselves into believing that we are doing everything within our personal power to limit our carbon footprint. Almost six in 10 (57 percent) of Canadians say that they are already doing everything they can to save the environment.

Assuming the world unfolds according to today’s polls and the tax does indeed get axed. Look for Canadians to support what they see as more concrete actions from governments and businesses. They are also likely to call for stricter regulations and penalties on companies that do not meet their expectations.

For businesses, the choice will be to act to address climate change and other environmental concerns and report on their progress or respond to ever-stricter legislation and reporting requirements. Half of Canadians say they try to buy from brands that act responsibly even if it costs them more. Thanks to planned environmental, social, and governance reporting, Canadians will soon have ample information to judge businesses’ efforts and will gravitate their spending toward products that fulfill their needs while making them feel good about their own sustainability actions.

For governments, Canadians will look for tangible, concrete changes. Things like protecting and restoring forests and wetlands. Focusing on key sectors like agriculture and transportation, making companies report on their efforts to reduce their carbon emissions, and mitigation efforts to help communities manage through extreme heat and floods. The big challenge for governments will be paying for the climate and environmental initiatives that people want.

Don’t be surprised if a few years from now, Canadians look back and say “It is too bad we do not have a tax connected to carbon to raise the funds required to make real changes to the environment we live in.”

Mike Colledge

Mike Colledge is President, Ipsos Canada ESG Lead and Global Lead ESG Services. Mike has more than twelve years of working within both social and economic portfolios of the Government of Canada. Before taking on the leadership role for ESG in 2024 Mike led Ipsos Public Affairs and Corporate Reputation…...

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