Conservative carbon-tax obsession will cost us
Count on higher income taxes as a consequence
The Nov. 30, 2015, election that brought the Liberal party to power in Newfoundland and Labrador marked the demise of the last nominally Conservative government in the country. After the election of a Liberal federal government the previous month and the defeat of the once-mighty Alberta Progressive Conservatives in the spring, observers wondered whether Conservatism, if not conservatism, might be on the way out.
Since that time the political landscape has undergone some subtle alterations. Should the united Conservative Party win Tuesday’s election in Alberta (if it does — experience teaches there is no sure thing in Alberta politics) it will join a chain of six Conservative/conservative provincial governments stretching all the way from the rockies to the Bay of Fundy, together representing more than 80 per cent of the country’s population.
Of course, just how conservative these governments really are may be doubted; the country would seem less to have shifted right than Conservative parties have shifted left. Ontario Conservatives are congratulating themselves for having given the opposition little to shoot at in last week’s provincial budget, which is true enough: for in it the Conservative government of Premier doug Ford promised to
spend very nearly as much as the left-wing Liberal government it replaced.
Indeed, under the Ford government the state will noticeably expand its reach, with a massive public transit construction program, dental care for seniors and a new childcare credit, even as it maintains the outgoing Liberals’ policy of subsidizing electricity rates, all of it out of borrowed funds. The target date for eliminating the province’s deficit is now 2023-24, assuming the expansion continues uninterrupted. The province’s net debt will remain in excess of 40 per cent of GDP for years.
Alberta’s UCP, under former federal Conservative minister Jason Kenney, would seem to offer a more robustly conservative alternative: the party platform talks of encouraging charter schools, plus there’s a vague nod toward health-care reform But even it merely calls for freezing spending, in what was already one of the biggest spending governments in the country, at the levels it reached under the NDP. A UCP government would slash the province’s corporate tax rate — but leave intact NDP hikes in personal income taxes. It would also leave in place the $15 minimum wage.
Between them, the two parties offer a snapshot of modern conservatism. After a brief period of ambition in the 1970s and the 1980s, when Conservative governments wanted to “roll back the frontiers of the state,” what Milton Friedman called “the tyranny of the status quo” has returned with a vengeance. At its most radical, conservatism now dreams of holding the state within its latest frontier, with all of its gains preserved intact. It might cut a tax or two, but it will never cut spending, or not in any way that might be detected.
And while Conservatives like to talk of their fondness for free enterprise, the truth is government will be involved in virtually every area under a Conservative government — subsidizing this, regulating that, providing services through state monopolies that could be provided by private markets — as it would have under a Liberal or NDP. Progressive parties are full of ambitious proposals for expanding the state. Conservative parties have no plan whatever to contract it.
The exception, of course, is carbon pricing, which has become the bête noire of Conservative parties across the developed world; opposition to it is now the badge of Conservative identity. Incoming Conservative governments that wouldn’t dream of, say, breaking up the bureaucratic-union stranglehold on the public schools, feel no qualms about abolishing carbon taxes.
The Ford government scrapped the previous Liberal government’s cap and trade plan, almost as its first act in office; a Kenney government would do the same with the Ndp’s carbon tax. Saskatchewan, which has never had a carbon tax, has challenged the federal “backstop,” which went into effect this month, in court; hearings began this week in an Ontario court on a similar challenge by the Ford government, with the UCP as an intervener.
They will almost certainly lose, meaning the only thing the provincial Conservatives will get for their opposition to the carbon tax is the opportunity to have it imposed by the federal Liberals. But even if they do not, this is a peculiar hill to die on for conservatives. Carbon pricing was first proposed, after all, as a market-friendly alternative to costlier traditional regulatory and subsidy schemes; its adoption by the left, as I’ve written before, is the biggest win for markets in a generation — or could have been, if Conservatives had been smarter about it.
Instead what do we see? On the one hand, Conservatives arguing for precisely those same costly regulatory and subsidy schemes that have failed so signally to date (where they have any policies at all — we are still waiting for the federal Conservatives’ plan). And on the other, progressive parties arguing that carbon pricing must be supplemented by regulatory measures, on the grounds that “pure” carbon pricing is politically unsaleable — in part thanks to Conservative opposition.
What might have been a choice between regulation and carbon pricing has instead become a choice between regulation-plus-pricing, on the left, or regulation-only, on the right: between needlessly-costly and maximum-costly. Conservatives could and should have argued for carbon taxes as a replacement, not only for regulation, but for other taxes, using the revenues collected from carbon taxes to slash personal and corporate tax rates. But that opportunity, too, was passed up, so count higher income taxes as another cost of the Conservative carbon tax obsession.
The worst of it is, having invested all their energies in this pointless, counterproductive fight, Conservatives have lost all interest in presenting a conservative alternative in other areas, beyond unfunded tax cuts. But they’re in power now, and I suppose that’s what matters.
THE POLITICAL LANDSCAPE HAS UNDERGONE SOME SUBTLE ALTERATIONS.