Carbon tax debate feels a little bit like Brexit

It's hard to explain a complicated issue using simple political slogans

One of the most potent tactics of the United Kingdom's Brexit campaign remains a big red bus that travelled the land urging voters to reject staying in the European Union.

The bus was emblazoned with the words “We send the EU £350 million a week,” adding that the money could be better spent on the nation's national health service.

That message resonates today as one of the key falsehoods that convinced a bare majority of voters in 2016 to support leaving the EU, which is now seen widely as an economic disaster.

The amount sent to the EU each week, for example, failed to take into account EU funding received by the U.K.

Canada's carbon tax debate is starting to take on a similar feel — although even its most ardent opponents or supporters would probably acknowledge it's not as immediately consequential economically.

Opponents suggest removing the carbon tax will cure inflation, while supporters insist it plays a crucial role in fighting global climate change.

Like with Brexit in the U.K., different interpretations of the facts can lend credence to different perspectives.

A little more than a year ago, the independent parliamentary budget officer Yves Giroux released a report examining the carbon tax and the rebates to assess their effects on households.

Interestingly, both Liberal Prime Minister Justin Trudeau and Conservative Opposition Leader Pierre Poilievre cite Giroux's reporting to bolster their polar opposite views.

Giroux has clearly stated that about 80 per cent of people paying the federal carbon tax receive more money back in rebates.

But he has also pointed to mitigating factors like an expected dip in incomes related to an expected decline in economic activity.

That could mean people will be paying more in carbon taxes than they receive in rebates.

Giroux also cautions against discounting the negative effects of climate change in calculating the overall economic repercussions of the tax. We need not remind folks of those serious fiscal consequences in Saskatchewan, given the forest fires and drought in recent years.

For Poilievre's Conservatives, all this complex information has been distilled down to simple slogans like “Axe the Tax” and “Spike the Hike.” Trudeau's Liberals, conversely, accuse carbon tax foes of lacking a climate action plan.

But those who really believe the carbon tax's removal will magically solve inflation should prepare to be disappointed; the governor of the Bank of Canada, Tiff Macklem, estimates carbon pricing contributes 0.15 per cent to inflation without even considering the benefit of the rebates.

TAX PROTEST

Regardless, people protested the recent carbon tax increase in groups that resembled the folks who staged the so-called Freedom Convoy against pandemic mandates in 2022.

Ironically, one of the carbon tax's most ardent opponents, Saskatchewan Premier Scott Moe, offered an unintentional argument in favour of carbon pricing while appearing before the House of Commons finance committee last month.

In response to a question, Moe answered that his government had considered alternatives to the carbon tax, but found them “too costly,” just like the federal carbon tax, which only applies to provinces without their own plans.

Saskatchewan remains the only province in Canada without an emissions reduction target, even as it receives the second highest carbon tax rebates in the nation.

And yet the province, which has stopped collecting the carbon tax on home heating, still collects the heating tax from many of those living in condominium buildings, perhaps tens of thousands of people.

Plus, the province collected $326.3 million in what it labels an output-based performance standard from the electricity sector in the last budget and plans to collect another $280.9 million more in the current budget.

Moe has admitted this is essentially the carbon tax with another name, after the province adopted its own electricity program to replace the federal one.

Yet it is still labelled as the federal carbon tax on Saskpower bills.

Like Brexit, carbon pricing is difficult to understand and even tougher to explain, which enhances the appeal of simple slogans, regardless of their accuracy.