Vows to cut carbon tax put PCs in awkward fix
All the Progressive Conservative party’s leadership candidates are skeptical of carbon taxes, seeking support from party members who hate them even more, but their party is counting on billions of dollars in carbon- tax money to pay for its election promises.
They need the cash even more than the Liberals. That’s an awkward position for a party of tax- fighters, one Doug Ford, Christine Elliott and Caroline Mulroney have to reconcile.
Before Patrick Brown abruptly quit the Tory leadership Jan. 25 facing allegations of sexual misconduct, he’d delivered his party a “People’s Guarantee” for the June election. Whoever succeeds him will inherit it, with little time to change its dozens of promises or re- run the detailed accounting work they led to.
Brown had been elected leader without promising a carbon tax and shocked Tories when he announced he supported one at a convention in Ottawa in March 2016. In retrospect, that was a critical point for his abbreviated leadership, the moment a lot of conservative Progressive Conservatives began doubting him.
The Tories’ People’s Guarantee talks about ditching the provincial Liberals’ cap- and- trade system in favour of the broader carbon tax the federal Liberals say they’ll put on any province that doesn’t have a carbon-pricing system by the end of this year. The feds will tax carbon emissions and give the proceeds to the province.
The People’s Guarantee calls that “opt( ing) in to the federal carbon price backstop.” The federal tax is much heavier than the cap- and- trade system Ontario already has. The current system sells carbon- emitting permits in auctions. The Ontario government projects a take between $ 1.4 billion and $ 1.8 billion a year for the next several.
The Tory plan expects switching to the federal carbon tax would mean $ 2.4 billion in extra revenue. It’s right there in a handy chart that sums up the accounting: “Net New Federal Carbon Price Revenue,” it says, with numbers that rise to $ 2.4 billion in 2021. The sooner Ontario gets out of the cap- and- trade business, a footnote adds, the more money we can expect from the feds.
I’ll say that again: The Progressive Conservatives expect to make about three times as much money off carbon pricing as the Liberals do.
The Liberals plan to spend their cap- and- trade money on green projects, from transit to energyefficiency retrofits totalling $ 1.9 billion a year.
The Tories would cut income taxes ($ 3.2 billion) and small- business taxes ($ 150 million), give parents tax credits for child care ($ 389 million), enhance sales- tax credits
($ 589 million) and give drivers tax rebates for buying winter tires
($ 19 million). Plus a bunch of other little boutique tax cuts and credits.
They want to cut the provincial government’s tax take from everything other than carbon by nearly $ 4.6 billion. They also have about $ 2 billion in new things they want to spend money on, from subsidizing hydro bills to improving services for children with autism. The extra money from the Trudeau carbon tax covers one- third of the Tories’ promises.
The People’s Guarantee pledges $ 2.8 billion in unspecified cuts.
If a new Tory government just sticks with the provincial Liberals’ cap- and- trade system instead of opting into the richer federal carbon tax, the $ 2.8 billion in magic cuts becomes $ 5.2 billion. If Premier Elliott or Mulroney or Ford finds some way out of pricing carbon altogether, the hole is $ 7 billion.
Watching the leadership candidates struggle with this isn’t pretty. Ford promises to kill carbon taxes and make up the lost money in “efficiencies.” If Justin Trudeau imposes a carbon tax, Ford said, he will stop it.
The possible solutions are deeper spending cuts, cancelling promised tax cuts, raising other taxes, or deficits. Or stick with Brown’s plan. The Progressive Conservative party has to decide what it’s going to be, and it needs a leader who will tell us.