Can the BC NDP government’s plan to hike the province’s carbon tax to $50 a tonne by 2021 hold up in the face of a growing number of premiers opposed to the very idea of such a tax?
Raising the carbon tax by $5 a tonne every year until 2021 is presumably a cornerstone of the NDP government’s climate plan (which I noted here last week will be released later this fall).
Evidence shows raising the price on carbon usage is the most efficient way to lower greenhouse gas emissions. B.C.’s carbon tax has been around since 2008, and a number of studies suggest emissions have declined as a result.
However, as a tax on carbon grows in size, it can become a political hot potato.
Certainly, conservative premiers in Ontario, Manitoba and Saskatchewan think so. Doug Ford, Scott Moe and Brian Pallister all oppose the carbon tax, which likely plays well to what appears to be a growing right-wing populism taking hold in parts of this country.
Joining those three leaders in opposing the tax is Alberta United Conservative leader Jason Kenney, who looks – barring a major upset – poised to become the next premier of that province after next year’s election.
This mounting opposition to a key aspect of any economic plan to fight climate change presents a challenge to Prime Minister Justin Trudeau, who has vowed to introduce a carbon tax set at $20 a tonne starting in 2019, and rising to $50 a tonne in 2022.
Ford and Moe have threatened to go to court to block such a federal tax, but few legal scholars like their chances at victory.
Barring a successful legal challenge, the whole issue of a carbon tax will become a nasty political fight between at least a half dozen provinces and the federal government.
All of which will put B.C. Premier John Horgan in an interesting and potentially strong position when it comes to provincial-federal relations.
If Trudeau sticks to his guns and introduces a new tax next year – and there is no guarantee he will, given a federal election is looming on the horizon – Horgan will essentially be his only important ally among provincial premiers.
Their differences over the Trans Mountain pipeline expansion could be overshadowed by a strengthened relationship anchored on a controversial – and potentially political unpopular – tax on carbon.
Horgan may be able to use this scenario as a not-so-subtle form of leverage in extracting things from the Trudeau government. Infrastructure funding over and above what has been promised seems likely, as does even more money for spill protection along B.C.’s coast.
A potential fly in the ointment is if Trudeau blinks, and B.C. is left as the only province in the country with a carbon tax that will keep getting more expensive as time goes on.
What would be the impact on the B.C. economy if this province has a $50 carbon tax and pretty well everywhere else has nothing resembling one? Presumably, the impact would not be a positive one when it comes to attracting investment in all kinds of economic sectors.
Each $10 increase in the tax adds another two cents a litre to gas prices, and at $50 a tonne a lot of industries may feel a hefty pinch they would not feel if they were located in another province.
Still, I can’t see Horgan folding his cards on this, even if Trudeau caves. As I noted here last week, he needs a carbon tax – and a big one at that – to allow the LNG Canada project to fit within his climate plan.
That LNG project will emit 3.4-million tonnes of greenhouse gas emissions a year and that number will only increase as the project expands in size. So, putting a high price on carbon in order to drive the use of carbon down will become imperative.
However, Horgan may need the prime minister to hold his nerve and bring in that tax over the objections of so many premiers. Carbon taxes can be politically dicey, but they are increasingly vital to have any chance at fighting global warming.
Keith Baldrey is chief political reporter for Global BC. [email protected]
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