Ford’s promise on energy policy displays ignorance
The Liberals have screwed up a lot, but cutting fuel taxes won’t improve our air
If Doug Ford’s Progressive Conservatives are elected in June, they’ll cut Ontario’s gas taxes 10 cents a litre, he promised Wednesday, because prices don’t matter, the whole discipline of economics is bull and climate change isn’t real.
They appear to have most people on their side. An Ipsos poll for Global News released this week found that 72 per cent of Ontarians think carbon taxes are just a cash grab and 68 per cent think the effects are just symbolic.
One conclusion you could reach is that we collectively wish that governments would make the price on carbon emissions a whole lot higher, so it would really make a difference. That’s probably not what we meant, though, and Ford went the other way Wednesday, announcing he’ll cut the price of gasoline by 10 cents a litre, partly by eliminating the current cap-and-trade regime and partly by just cutting the provincial tax on gas.
“Ours is the only party that understands that gas is an absolute necessity that not only gets people around, but also fuels our economy,” Ford said at an Oakville gas station.
(One hundred per cent of the Tory promises so far are either to spend more money or cut provincial revenues. This one will cost the treasury $1.2 billion, the party says, nearly half the $2.6 billion the provincial gas tax brings in each year. The Tories would keep gas-tax transfers to cities intact, they say.)
“These guys don’t know what they’re doing to the people of Ontario,” Ford wrote in an email blast to supporters (or someone did over his name) right after. “They think if they make gas expensive enough, people will drive less.”
Well ... yeah?
People might not drive less, if gas is more expensive. Some would. They’d walk or bike or combine errands better. Others would favour more efficient cars. Because that’s how the most basic principle of economics works: If gasoline is more expensive, people will burn less of it by making the decisions that make the most sense for them. Ford argues this is dumb.
The New Democrats, meanwhile, argue for regulating the price of gas, and push numerous other economically unsound ideas, like subsidizing electricity when it’s at its most expensive. But we expect that from them. The Tories are supposed to be the party of accepting grim reality.
Let’s reflect on how the Liberals got us all here.
They closed Ontario’s coal-fired generating stations, replacing them with much cleaner gas plants. That cost money, not least because of the billion-dollar decision to take two gas plants out of politically sensitive locations near Toronto, but it was a big deal for the environment. It cut air pollution sharply and has been Canada’s biggest contribution yet to fighting climate change. The last smokestack at the last plant came down this year.
After that, the Liberals’ environmental record is a litany of high-minded screw-ups.
They chose to massively overpay for wind and solar power to get more renewable energy into Ontario’s supply and launch a new industry manufacturing parts for windmills and solar farms. It didn’t work: Suppliers stuck around only as long as the subsidized construction projects did. Wind farms’ neighbours despise them and hate the Liberals for railroading them.
Now the same party that touted its green-energy projects for years never misses a chance to point out it’s not ordering up any more.
They messed around with wind power in the Great Lakes, encouraging projects and then halting them at election times while making civil servants gin up bogus scientific cover. That’s cost US$28 million in one trade claim and another case is going to trial imminently.
And then there’s the market in carbon-emissions permits with Quebec and California, the “cap-and-trade” system to attack climate change. The policy is fine but it’s been sold under false pretences.
Cap-and-trade systems are the business-friendly approach to climate change. The companies that buy permits are those that need them most, those that get the most bang for every buck they pay to emit greenhouse gases. Cap-and-trade was Canada’s official climate-change policy under Stephen Harper.
The Liberals claimed their cap-and-trade system would be revenue-neutral, which was obviously not true. They’ve been taking the roughly $2 billion a year it brings in and spending it on environmental initiatives, from beefing up the insulation in social housing to funding transit projects. That’s all arguably worthy but you don’t make a tax — which this is, at its core — revenue-neutral by spending the money it brings in.
The Tories under Patrick Brown planned to replace the cap-and-trade system with a broader carbon tax, offset by an assortment of income tax cuts. That would have approached revenue-neutrality.
Ontario’s Green party has an even simpler proposal: Tax carbon emissions, put all the money in a separate account, and share it with every Ontarian. They call it “fee-and-dividend,” which is a little bit cute, but it would mean no laundering it through the government’s general accounts or trying to keep multiple tax increases and decreases balanced every year.
Ford promises to bail out of the carbon market, which will be tricky and probably require refunding billions for permits we’ve already sold, and replace it with nothing.
Ultimately, nobody is responsible for aggressive ignorance but the people pitching it, but the Liberals have made sensible environmentalism radioactive. High-minded screw-ups are still screw-ups.