Ever since Canada’s national media decided to cover the unified conservative political campaign against the federal government’s implementation of a carbon tax as though it had a legitimate chance of succeeding in the Supreme Court, there has been a lot of misunderstanding about what a carbon tax is. The technical mechanism by which the government levies a fee on carbon doesn’t really matter as much as the game being played with Canadians’ general lack of civics knowledge. Or, as the Supreme Court said in its 2021 summary of the failed case to declare the carbon tax unconstitutional: “The majority noted that the term ‘carbon tax’ is often used to describe the pricing of carbon emissions. However, they said this has nothing to do with the concept of taxation, as understood in the constitutional context. As such, they also concluded that the fuel and excess emission charges imposed by the Act were constitutionally valid regulatory charges and not taxes.”
In all honesty, an underrated failure in all of this is that our national media breathlessly covered this decision as anything other than a massive waste of taxpayer money.
Embarrassing.
Since our national media didn’t cover it that way, not a lot of people have any idea what the carbon tax is. And even though we all fundamentally understand how punishing it will be to our car-dependent lives, we don’t understand who’s to blame. Because the issue is complex, and a whole bunch of people stand to benefit from our mass misunderstanding. You should be mad about the carbon tax. Very mad. Just make sure you’re mad at the right people.
A brief history of levying fees on carbon in Canada
Alberta was the first province to pass legislation that would allow for carbon pricing in 2003. Ralph Klein’s conservative government passed legislation that it hoped would get emissions down to 50% of 1990 levels, or 87.65 megatonnes per year. The price of carbon in 2003 was $15 per tonne (it will be $65 per tonne on July 1, 2023). Alberta’s carbon policies have changed a lot since then, with legislation that has been altered, repealed, not enforced or not written with enough enforcement mechanisms to change behaviour. This is one of a set of many complex reasons why Alberta is Canada’s top polluting province today.
In 2007, Quebec became the first province to pass something called a “carbon tax,” and shortly after it did, ExxonMobil came out in support of it. At the time, ExxonMobil CEO Rex Tillerson told the media he believed carbon tax to be more fair, and is quoted in The Guardian in 2009 saying, “As a businessman it is hard to speak favourably about any new tax... But a carbon tax strikes me as a more direct, a more transparent and a more effective approach.”
In 2014, a bunch of policy super nerds including Paul Martin (former Liberal finance minister), Jim Dunning (longtime Alberta MLA and almost Klein’s successor) and Preston Manning (who started the further-right conservative splinter party, the Reform party) started Canada’s Ecofiscal Commission. This organization still exists today to advocate for a price on carbon.
In 2015, Justin Trudeau got elected, promising to put a price on carbon, then did a few years later in 2018.
What is the point of a carbon tax?
Without a carbon tax, carbon pollution is free. If pollution is free, companies that exist to make money will be incentivized to pollute. The history of carbon taxation is full of conservative policy thinkers because, up until about 2018, it was the flagship conservative solution to climate change. For those who are too young to remember a time in Canadian politics when the Liberal and Conservative parties were still tied to their namesake ideologies, conservatives used to love a good market-based solution. And if the market says pollution is expensive, then companies will find solutions that cost them less, which in turn means they will pollute less. That’s it. That’s the whole theory in a nutshell.
How theory meets real life is where the issues arise and where this debate gets complex. While the price on carbon is designed to solve climate change, it can only do so by punishing us. And this is only possible due to decades of political and economic choices that have prioritized profit and disposable consumption over sustainability. Pollution has been an invisible subsidy of Western economic growth, and we are now so dependent on this subsidy that even a minor increase in our accounting of it threatens to ruin us financially on July 1, 2023.
And while it is very tempting to blame Trudeau, Tim Houston or even Mike Savage, the truth is that our politicians as a class of people have been failing us for years, and there is no easy way out of this hole. Our society has not been fiscally or environmentally sustainable for well over 20 years, and getting out of this hole is going to hurt.
The politics of carbon
“The overall trend between 1990 and 2021 was an increase in GHG [greenhouse gas] emissions,” reads a Government of Canada website. While some sectors saw decreases, the oil and gas industries upped their pollution game. And Canada’s largest single-category year-over-year emissions growth sector is in transport, specifically in trucks and SUVs. This is one of many fascinating failures of governmental regulation over the past 30 years that will end up punishing you at the pumps.
Over the past 30 years, there has been a deliberate push from American auto giants to produce and sell vehicles in the light truck category. The reason for this, according to former editor of Jalopnik and Road and Track, Bob Sorokanich, is due to the regulatory environment of automotive manufacturing in the United States. As he explained to The War on Cars podcast, the safety and emissions requirements for passenger cars were much more stringent than those in the light truck category. No one thought to make passenger cars in the light truck category—instead, automakers focused on the passenger category family mover: The minivan. Then, automakers realized that emissions targets weren’t as stringent in the category of vehicles expected to be work-only vehicles so they started making and marketing pickups and SUVs as family cars. This was seen as good (for the automakers) due to the higher margins allowed by lower safety and environmental standards. And since Canadian politicians are often too cowardly to have regulations stricter than our largest trading partner, Canada’s personal transportation emissions chart looks like this:
The reason the price of carbon feels unfair is that it *is* unfair. It is fundamentally unfair that government policies for economic growth and prosperity have been underpinned by subsidizing pollution and monopolizing our transportation methods. It is almost impossible for us to get around our cities safely without a car. And one of the main reasons there are no transportation options other than cars is because of our pattern of suburban development. Which, in theory, was supposed to be great, but in practice has given economic growth and prosperity to developers and leaves behind a tax base that can’t support sustainable municipal services. Which in turn has hollowed out the power of public institutions. And these patterns of unsustainability being woven across all aspects of Canadian life have led to the hollowing out of the middle class.
We are left holding the bag at the end of this generational scam, and we are all about to get massively hosed. All of our politicians are yelling at us about how we should be mad at a different set of politicians, but not one of them is telling us how we’re going to stop using carbon. Or how we’re going to reduce our dependence on carbon moving forward.
The reason this should be scary is that either polluting has to get more expensive or the climate is going to get worse. At the provincial and federal levels in Canadian politics, there are no politicians putting forward comprehensive policy proposals or a plan for the future that is both achievable and sustainable. Cheap oil, cheap debt and cheap pollution have funded Canadian growth up to this point, and everything we do in Canada relies on those subsidies. The longer our politicians keep fighting about the carbon tax instead of telling us what they think society should look like without these subsidies, the longer we remain in danger.