Federal Liberals are fighting the climate change issue one refrigerator subsidy at a time
If a family has to buy a new refrigerator because the carbon tax makes the power bill more expensive, that’s success in Ottawa’s view, even if it’s tough for that family. But the rules are different for big business. On Apr. 1, the federal carbon tax kicked in in Manitoba, New Brunswick, Ontario and Saskatchewan.
The tax will add 4.4 cents per litre to the price of gasoline – rising to 11 cents by 2022 – and drive up the cost of everything from home heating to groceries. The rationale, the federal government says, is to incentivize behavioural changes by making prices higher, since it hopes you won’t be able to buy as much gas and thus you’ll drive less. Besides, with a plan to rebate the money via a tax credit, it insists you won’t actually be out of pocket. In fact, the politicians promise you’ll actually be better off!
Ignore that fact that many essential goods – and especially the use of energy sources such as gasoline - are known as inelastic goods because demand remains relatively constant despite price changes. In other words, Canadians still need to drive to work and drop their kids off at school even if Ottawa pushes up the price at the pump. British Columbia has proven this point as its emissions are still rising, despite its carbon tax. And never mind that the Trudeau carbon tax is set at level far too low to get Canada anywhere near its own emissions targets, defeating the entire purpose of the tax.
A better question, highlighted by an announcement made by Environment Minister Catherine McKenna, is why the government’s ingenious plan to tax Canadians into prosperity doesn’t also apply to Canada’s wealthiest corporations? McKenna’s big reveal was that her government is giving a $12
million taxpayer handout to Loblaw so that the company could upgrade the refrigerators in its stores, all in the name of helping fight climate change.
It would have been hard for McKenna to pick a less sympathetic recipient. Owned by one of Canada’s richest families, and recently embroiled in controversies over tax evasion and a bread price-fixing scheme, Loblaw turned a tidy profit of more than $800 million last year.Which brings us to an obvious question: if a new carbon tax is the best way to get Canadians to cut their carbon emissions, why does Loblaw get a subsidy instead? While grocery stores will pass on their carbon tax costs to consumers, they’re now cashing corporate welfare cheques from Ottawa. It’s almost as if the government is admitting that when it comes to businesses, piling on new costs is harmful. And yet it expects us to believe the opposite when it comes to Canadians trying to stretch their family budgets. For a government that says it’s focused on the middle class, it has been unbelievably generous with large, mostly profitable corporations, with handouts to Bombardier and Toyota, not to mention its seedy subservience to the now-infamous SNC-Lavalin that sparked an unending scandal.
The Trudeau government was already having a tough time convincing skeptical Canadians the carbon tax would actually make them better off, rather than costing them money, while doing nothing to help the environment.
Now the government has piled on an additional contradiction.
Ottawa is using the carbon tax to pressure middle-class families into buying new fridges, but, if it’s one of Canada’s wealthiest families flanked by a flock of lobbyists, Ottawa is all to happy chip in millions from taxpayers for new coolers.
Aaron Wudrick is the Federal Director of the Canadian Taxpayers Federation