Ace in the hole on climate change

The Liberals bent in the face of opposition this week, but they can’t break

The federal Liberals may be taking a pragmatic approach to their carbon tax plan by softening the blow to heavy emitters.

We are, after all, living beside a U.S. president who once believed global warming was a plot hatched by the Chinese to hurt American business and is already wreaking economic havoc in some key Canadian competitive sectors with punitive tariffs and ongoing trade uncertainty. On Thursday, Donald Trump moved to roll back a measure that was meant to reduce greenhouse gas emissions from cars and trucks.

Yes, this all threatens the competitive position of Canadian industries — particularly those who export — and the Trudeau government cannot risk the flight of business.

This is a different continent than the one in 2015 when a newly-elected Justin Trudeau had an environmental ally in Barack Obama.

But pragmatism is one thing. Politics is another.

The Liberal carbon tax has become one of the country’s political hot buttons and on the political front the government dropped the ball.

The Trudeau government ceded ground this week on both sides of the climate debate and most remarkably ceded ground to conservative opponents who are focused solely on killing a tax while offering nothing on the environment themselves.

The Doug Ford government at Queen’s Park, its ally, Saskatchewan Premier Scott Moe and their federal cousin, Conservative Leader Andrew Scheer, tripped all over themselves in their haste to pronounce this was a victory for their content-free, bumper sticker claim that a carbon tax is nothing more than a cash grab.

Ontario Environment Minister Rod Phillips Thursday dug deep in the hyperbole bag, referring to the Trudeau plan as “job-killing”, that invites “economic catastrophe” and would be “devastating.”

Consultation with industry had always been a component of the Liberal plan and those involved say that consultation had been formal, open and constructive.

But the decision to deliver higher rebates to heavy emitters was merely posted to the government website on a sluggish late July Friday afternoon, a move that even those who support the initiative agreed was ham-handed.

There was no ministerial statement, no media availability, certainly no press conference at the National Press Theatre followed by media appearances by Environment Minister Catherine McKenna.

Nothing, until it was revealed by The Globe and Mail, allowing critics on both sides to fill the information void until the government held a technical briefing Thursday — six days after it posted the information on its website.

David McLaughlin, the director of climate change for the International Institute for Sustainable Development and an adviser to the Manitoba government says since industry does not want a carbon tax, its only alternative is to lower the threshold at which they must pay for emissions.

“Their message is that their only certainty was more taxes. Give us a break,” McLaughlin said. “But this will mean more emissions.”

There will be more opportunity for business to make a case for further breaks before the federal plan is implemented.

Right now this change, described as “fine-tuning” by a department official, only applies to Ontario and Saskatchewan who will not play by Ottawa’s carbon tax rules. A change in government in Alberta would add another huge player to that list.

That, McLaughlin says, means the pan-Canadian framework envisioned by Ottawa no longer works because it was predicated on provincial cooperation.

On cue, Ontario Attorney General Caroline Mulroney announced her government will challenge the constitutionality of the federal carbon tax at the Ontario Court of Appeal.

There is a danger that voters might choose Ford-style thought bubbles over the technicalities of an output-based pricing system. But that won’t come from the courts.

The Liberals bent on this file in the face of opposition this week, but they can’t break.

They have an ace to play. Essentially Mulroney will spend up to $30 million of taxpayers’ money in a futile court challenge that will be dead on arrival.

Ottawa will impose a carbon tax, but the revenue that comes back from the tax will be delivered directly to Ontario residents — by Trudeau, not Ford.

It’s hard to see Scheer campaigning in Ontario in 2019 vowing to take away rebate cheques. That would be an unprecedented “cash grab back.”