Carbon taxes will push up the cost of everything

The two key things to understand about Prime Minister Justin Trudeau’s national carbon-pricing scheme are that it will increase the prices of and/or taxes on almost all goods and services and that it will keep going up for decades to come.

It’s not going to end with the $10 charge per tonne of industrial carbon dioxide emissions Trudeau announced for 2018, rising by $10 annually to $50 in 2022.

As of Feb. 21, 2017, an internal federal finance department document entitled, Key Design Features of the Federal Carbon Pricing Backstop, explains: “The overall approach is to be reviewed by 2022 … to confirm the path forward, including continued increases in stringency in future years and expert assessment of stringency and effectiveness of the various carbon pricing systems across Canada.”

What that means is Trudeau’s $50-per-tonne carbon price for 2022 isn’t a ceiling, but a floor that all provinces and territories have to meet, one that will continue to rise post-2022, costing Canadians billions of additional dollars annually.

Further, Trudeau’s national carbon price, as expensive as it will be for Canadians, is nowhere near high enough to reduce Canada’s emissions to Trudeau’s pledged targets to the United Nations of 17 per cent below 2005 levels by 2020 and 30 per cent below by 2030.

As the National Post reported in March, based on an Environment Canada document, Environment and Climate Change Minister Catherine McKenna was advised shortly after taking office that Canada’s carbon price would have to be $100 per tonne by 2020 (not $50 in 2022), to achieve Trudeau’s 2030 target.

And that was assuming a national carbon price starting in 2015, not 2018, or for that matter 2019, when Trudeau’s plan will come fully into effect.

The document also said Canada would need a carbon price of $200 to $300 per tonne by 2050 to meet future emission-reduction targets, again assuming a 2015 start date.

Canada will only be able to achieve Trudeau’s targets, as the UN has noted, if it purchases billions of dollars of carbon allowances on international carbon markets.

Unfortunately, these markets are riddled by fraud.

Finally, let’s clear up a report earlier this month by the Canadian Press that argued that a recent Conservative fundraising email claiming Trudeau’s national carbon price will increase the price of “everything’’ contained “a lot of baloney.”

While the Conservatives should have said “almost everything,” in calling the claim “a lot of baloney,” CP downplayed the comments of the main expert it consulted.

That was Chris Ragan, an economics professor at McGill University and chairman of Canada’s Ecofiscal Commission, who actually said, as CP reported: “I guess, in principle, I would probably say there is nothing where the price won’t go up, but in practice there will be a whole range of things where you won’t even notice a price increase.”

Perhaps not initially, but that’s only because Trudeau’s carbon price is $10 per tonne to start (with some provinces giving rebates) and will rapidly rise in future.

Plus, the added costs will be hidden in the retail price of most goods and services, or the provincial and federal taxes applied to them.

Meaning Canadians will be hit for billions of dollars to pay for Trudeau’s national carbon-pricing scheme, which will not achieve its goals.

Lorrie Goldstein is a columnist with the Toronto Sun, part of the Postmedia Network. This first appeared in the Toronto Sun.