Is the carbon tax suffering from a failure to communicate?

Attacks on the carbon tax are both easy and counter‐ intuitive.

The federal price on car‐ bon, implemented in 2019, is still relatively new. After a pe‐ riod of unusually high infla‐ tion, Canadians are newly sensitive to the price of goods and necessities. And the carbon tax, by design, in‐ creases each year (on April 1, in fact).

Meanwhile, the benefits that derive from putting a price on carbon, and the greater economic and envi‐ ronmental harm that might result from lacking such a policy, are not immediately tangible - although Canada's greenhouse gas emissions are falling.

So when Conservative leader Pierre Poilievre en‐ courages his supporters to chant "axe the tax" and "spike the hike," he's aiming at an easy target.

But unlike most other tax‐ es, and everything else that could be said to be con‐ tributing to the cost of goods, the carbon tax comes with a rebate. In fact - as its propo‐ nents like to point out - it's estimated that most house‐ holds receive more from the rebate than they pay in ad‐ ded costs created by the tax.

Given that most people particularly those with lower incomes - are expected to re‐ ceive more from the rebate than they pay in additional costs, many households might actually end up worse off if the carbon tax is re‐ pealed.

For the sake of compari‐ son, consider federal excise taxes on fuel, which long pre‐ date the carbon tax. Since 1995, the excise tax has ad‐ ded 10 cents to every litre of gas. The resulting revenue is not rebated directly to households (although some people with a mobility im‐ pairment can apply for a par‐ tial refund).

But no opposition leaders or premiers are clamouring right now for Prime Minister Justin Trudeau's government to repeal those excise taxes perhaps because they gener‐ ate $5 billion annually for the federal government, $2 bil‐ lion of which is distributed to provinces to fund municipal infrastructure.

But the political value of carbon tax rebates depends on Canadians being aware that they're receiving them. A lack of public awareness might explain why the feder‐ al government recently changed the name of the payment from the Climate Action Incentive to the Cana‐ da Carbon Rebate.

If a rebate falls in a bank account and no one hears it

In January, Abacus Data asked Canadians in provinces where the federal carbon tax is applied whether they had received a payment from the federal government in the past week. Of the 49 per cent who said yes, the vast ma‐ jority correctly identified it as a rebate connected to the carbon tax. But that still left 51 per cent who said they hadn't received a rebate.

In fact, the federal govern‐ ment sent carbon rebates to 12 million Canadians in Janu‐ ary.

That finding by Abacus might be affected by the fact that, in the case of married and common-law couples, only one person receives the rebate. But the result only gets slightly better for the Liberal government when the question is worded more broadly. In November, a quarter of respondents told the Angus Reid Institute that neither they nor their house‐ hold had received a rebate in the past year. (Another 12 per cent weren't sure.)

Even among those who had received a payment, 54 per cent said they paid more in the carbon tax than they received in rebates.

Several factors may be un‐ dermining the Liberal gov‐ ernment's communication ef‐ forts. While energy suppliers specify the federal carbon charge on the bills they send to customers, banks are not obliged to clearly label the re‐ bates when deposits are made to Canadians' accoun‐ ts.

But when David Coletto at Abacus released his findings in January, he suggested an‐ other possible explanation the restrictions on govern‐ ment advertising the Liberals implemented in 2016.

From 2009 to 2015, the previous Conservative gov‐ ernment spent tens of mil‐ lions of dollars promoting what it called "Canada's Economic Action Plan" - a slo‐ gan used at first to promote the government's belated re‐ sponse to the Great Reces‐ sion and then applied to a broad swath of Conservative policy. The opposition parties howled at the use of public funds to promote the sitting government.

When the Liberals came to office they not only slashed spending on adver‐ tising, they also created new rules and oversight to limit how government advertising could be used. Ads produced by the federal government are now required to be "ob‐ jective, factual and explana‐ tory" and cannot be "selfcongratulatory or self-prais‐ ing in nature."

Is this a failure to com‐ municate?

If you want to know how per‐ snickety the non-partisan re‐ viewers of ads can be, the changes to ad scripts are posted publicly. In 2019, an ad proposed by the Canada Revenue Agency was flagged because one phrase - "the new Climate Action Incentive is making a cleaner economy more affordable for every‐ one" - was deemed to be self-congratulatory.

It's impossible to know ex‐ actly what the Liberals might have done in the absence of those rules. It's possible that the carbon tax and rebate would now enjoy better sup‐ port (or at least broader awareness) if it had been promoted like the Economic Action Plan.

But if it was a gross abuse of public funds when the Conservatives did it, it would be a gross abuse of public funds now. (Coletto was not specifically recommending that kind of massive advertis‐ ing campaign.)

Perhaps there's some ac‐ ceptable middle ground be‐ tween the relatively re‐ strained advertising of recent years and how government advertising budgets were used in the past. But the Lib‐ eral government's struggles to defend the carbon tax might simply indicate new challenges all governments face in communicating with voters - another idea Coletto has written about in recent months.

Convincing voters to ac‐ cept a new tax (even with a rebate) might be an eternal challenge (Brian Mulroney knew this well). The frag‐ mented media environment of 2024 might make it even harder. But if gaps in public awareness suggest the Liber‐ als need to make more of an effort, it doesn't necessarily follow that such an effort needs to involve government ads.

It's also fair to ask whether the arguments Trudeau's government has made have been good enough.

WATCH: Prime Minister Justin Trudeau defends car‐ bon tax in Alberta

In fairness to the Liberals, they might have assumed the carbon tax debate ended with the 2021 election - when the Conservatives, including Poilievre, ran on a platform that included a proposal to put a price on carbon. But just how much of the fight re‐ mains to be fought was demonstrated when Trudeau spent more than seven min‐ utes in Calgary on Wednes‐ day responding to a re‐ porter's question about the carbon tax.

"Your question, Rick, is sort of, well, that all makes sense, why are so many peo‐ ple still against it?" Trudeau said to the Calgary Sun's Rick Bell after laying out the logic behind the federal govern‐ ment's decision to imple‐ ment a carbon tax. "Well, that's a question that we all have to ask."

Maybe that's a question for everyone to ask. But it's most pertinent for Trudeau himself.

In response to an earlier question about the carbon tax, Trudeau said he under‐ stood that there's a lot of "political misinformation and disinformation" about the policy. But if "misinforma‐ tion" is polluting the debate, that only increases the bur‐ den on Liberals, as the au‐ thors of the policy, to cut through it.

Voters may ultimately de‐ cide they don't want the car‐ bon tax. If that happens, the first question to be asked will be whether Trudeau and his government did enough to sell it.