National Post

CORCORAN … Canada’s carbon taxapalooz­a.

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We hereby declare this to be Carbon Taxapalooz­a Week. The objective is to acknowledg­e and deplore the great stampede of provincial government­s to tax the hell out of fossil fuels.

Some recent examples: Last week a Quebec tax committee called for a phasedin 5-cent-a-litre increase in gasoline taxes. Alberta didn’t wait for a committee report; its new budget added a 4¢ tax on gasoline starting immediatel­y. Ontario is about to announce plans to join California’s capand-trade carbon emissions reduction scheme, essentiall­y a carbon tax on industry. Whether the Liberal managers of the Ontario debtopia will also impose a new gasoline tax in its new budget remains to be seen. Any bets?

Nationally, the campaign to accelerate the provincial attack on fossil fuel consumers will this week move into higher gear. On Tuesday, Canada’s Ecofiscal Commission, a self-appointed group of allegedly market-oriented economic policy wonks, will release a report calling for the provinces to adopt “carbon pricing” to help Canada tackle climate change. And on Wednesday, the head of the Ecofiscal Commission — McGill University’s Chris Ragan — will host a broadcast seminar titled “The Business of Carbon Pricing in Ontario.”

So there we are, Canada, suddenly infested with politician­s and high-end thought leaders plotting and scheming to bring the magic of carbon pricing to our gas tanks and economies.

Until now, Ontario hasn’t had much interest in carbon pricing, preferring instead to fight climate change through all manner of regulation and non-market price-fixing schemes. Instead of a carbon price to promote change in its coal-fired plants, Ontario moved in with sledgehamm­er regulation­s and shut the plants down. Then, instead of letting markets work to replace lost coal power, Ontario brought in feed-in-tariffs, a massive subsidy regime that has given Ontario consumers some of the highest cost electricit­y in the developed world.

Ontario’s fondness for markets has hitherto been non-existent. But now, having exhausted a range of bad policies, Ontario’s environmen­t minister, Glen Murray, is pushing to adopt another set of allegedly less bad policies. Last December, on the eve of the muddled Lima, Peru, climate talks, Mr. Murray joined Quebec, California and British Columbia enviro ministers in a joint statement calling for “immediate collective action” to fight climate change.

That collective action, apparently, involves Ontario joining the existing California-Quebec carbon-trading scheme. Because it involves a “market mechanism” whereby individual companies buy and sell a regulated quantity of carbon emissions, cap-and-trade is considered by some economic theorists as superior. The emission rights are created and regulated by the state or province, and prices are supposedly set in the market where the rights to emit are trading among corporate carbon emitters.

Nobel economist Ronald Coase is said to be the father of pollution trading. In practice, however, the theory that carbon capand-trade regimes are market-based and therefore avoid the costly burden of central planning and regulation is one of the great economic delusions of carbon tax advocacy. The Quebec and California systems involve thousands of pages of regulatory instructio­n and conformity. Government­s control the carbon market, right down to the carbon sequestere­d in trees. To obtain carbon offsets in the California forest sector, companies are required — via a 100 page regulatory instructio­n — to essentiall­y convert their business into a micro carbon-counting exercise.

California has sold more than $2 billion in carbon allowances under cap-and-trade since its inception in 2013. Ontario reportedly has its eye on $1-billion to $2 billion, although these schemes take years to set up and no cash will be landing for some time. Mostly, the Ontario cap-and-trade operation appears to be another PR hoist for Mr. Murray, who has already made a name for himself defending honey bees against a likely mythical pesticide scare.

Cap and trade tax revenues, like direct carbon taxes, are ultimately borne by consumers and soon find their way into government slush funds. California Gov. Jerry Brown has promised to use part of the capand-trade revenue to pay for a $68 billion bullet-train boondoggle. Quebec projects revenues of $3.3 billion between now and 2020, the money allegedly dedicated to renewable energy and other worthy green projects.

Over at the Canada Ecofiscal Commission, the thought leaders are keen backers of cap and trade, but if not carbon trading, a straight carbon tax will suffice. Both Mr. Ragan, of the commission, and Mr. Murray like to promote the idea that British Columbia’s $30-a-tonne carbon tax, equivalent to 7¢ on a litre of gasoline, has been effective. As Mr. Murray said in his joint statement with California and the provinces, the B.C. carbon tax has “reduced fossil fuel use by 16%” since it was introduced in 2007.

Evidence for this claim, often made, is far from clear in any statistics. Ottawa’s data on greenhouse gas emission shows no change in B.C. carbon emissions between 2005 and 2012. British Columbians, in other words, are paying a carbon tax that does nothing but slosh around in general government revenues, with no environmen­tal benefits.

The provinces and Canada’s Ecofiscal Commission are leading a carbon tax attack on consumers

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