Carbon tax shell game

Ontario Progressive Conservative Leader Patrick Brown has been a carbon taxer from the start. Last weekend Brown, joining the self- described caped crusaders at the Ecofiscal Commission, nailed the carbon- tax policy to the masthead of the Conservative’s run for power. With an election set for next year, some say the strategy could succeed, which it might — but only if Ontario voters buy into the fiscal shell game the party is trying to pull off.

As Andrew Coyne has concluded, the new Brown platform is mostly a load of vapid mush. It nicks and ticks at hundreds of trending political topics, and makes a few stabs at good policy — such as promising to kill the Green Energy Act — but otherwise Brown’s ship sails off in many dubious directions.

This is especially true of the party’s new carbon-tax plan, a shifty numbers game in which Ontario’s middle class will be asked to vote to pay for their own tax cuts.

The headlines followed the con: “Leader Patrick Brown’s electoral blueprint includes tax cut.” The party platform has a big-typeface claim of a “22% tax cut for the middle class.”

That’s the sales pitch, but keep an eye on the peas. What the headlines don’t explain is that the 22 per cent tax cut for middle- income taxpayers will be paid for by an 81 per cent increase in the existing 14.7- cent provincial tax on a litre of gasoline. As with all carbon taxes, the tax is paid disproportionately by lower- and middle-income taxpayers.

According to information in the Brown platform’s “fiscal plan,” by 2022 Ontario citizens and industry will be paying $5 billion in higher prices for gasoline and other fossil fuels — the money collected first by Ottawa then sent to Ontario. Between 2018 and 2022, a Conservative Ontario government would receive $ 15 billion in carbon- tax revenues to pay for income-tax reductions for lower and middle income taxpayers worth $7 billion.

The shell game appears to have been carefully orchestrated in cahoots with the Ottawa-based EcoFiscal Commission, a self-appointed commission headed by economists funded by green- tinged foundations; EnviroEconomics, headed by environmental economist Dave Sawyer; and CleanProsper- ity, a carbon- tax- supporting outfit headed by Mark Cameron, a former policy adviser to Stephen Harper with links to assorted sustainable/environmental organizations. CleanProsperity’s board includes radical green political fixer Bruce Lourie, a major force behind the Ontario Liberal’s Green Energy Act fiasco.

Just two weeks ago, these organizations coincidentally published brief supportive blurbs that appear to endorse the Ontario carbon tax plan. How did Ontario’s PCs hook up with this lot? Worth investigating, but the main story at the moment is the Ontario Conservative endorsement of Ottawa’s carbon framework.

Under the plan, Ottawa will begin collecting a $10-a-tonne carbon tax next year. The tax will rise to $50 by 2022, when total revenue will hit $5 billion a year (according to a reference to a two-page note from EnviroEconomics). Since carbon-tax economists say a carbon price would have to be $200 a tonne to be effective, this is just the beginning.

Exactly how these monies will be distributed is unclear in Brown’s fiscal plan. While EnviroEconomics estimates carbon- tax revenue in 2022 will be $ 5.1 billion, the fiscal plan claims only “net” carbon-tax revenue of $2.4 billion. Where does the money go? Whatever the breakdown, it will be inexplicable to voters.

Brown justifies the carbon tax as a superior replacement for the Kathleen Wynne Liberal cap-and-trade plan. Cap and trade uses regulation to limit the volume of carbon emissions by industry and forces corporations to buy carbon-emission permits on an international market. The Ontario cap- andtrade regime is part of an open- market trading connection with California and Quebec.

A straight carbon-tax plan avoids the regulation and goes straight to a tax that, in theory, will raise the price of fossilfuel energy and lead to a reduction in demand.

The likely benefit of switching to a straight tax on fossil fuels is all theory and no facts. All carbon- tax data crunching is dependent on economic models that may or may not reflect reality.

A brief note from the EcoFiscal Commission says the existing Wynne Liberal Ontario cap-and-trade system would deliver a lower carbon price that “might drive more emissions reductions in global terms, thanks to a more ambitious cap and the use of revenues to support low-carbon technologies and other emissions-reducing activities.” On the other hand, a new Brown Conservative direct carbon tax would raise more revenue but would also deliver more emissions reductions within Ontario.

And on still another hand, according to the footnoted comment from Dave Sawyer at EnviroEconomics, “The trade-off would be lower total GDP, with the carbon tax and recycling to income tax reductions outperforming the proceeds recycling scenario.”

That’s not much of an election slogan. And, in the context of the Ontario Progressive Conservative Party’s new election run, totally irrelevant whatever it means. The objective is to tax taxpayers more via a carbon tax so that politicians can reward taxpayers with tax cuts.

That, ladies and gentlemen, is climate policy in action.

ONTARIO’S PC LEADER PLANS TO CUT TAXES BY RAISING TAXES.