Brown's Carbon Tax Can Work
May 1st, 2016 | M. Menuck

As depressing as federal politics may be at this time in Canada, with our Prime Minister engaging in a disgustingly staged smarty-pants show before the national media when he isn’t performing yoga poses before our international allies, those of us fortunate to live in the province of Ontario can at least find some solace provincially. After a near decade and a half in office that has seen the once mighty economic engine of the country reduced to have-not status with a public debt rivaling that of such fiscal basket cases as California and Greece, Ontarians finally seem to be tiring of the Liberal government. Premier Kathleen Wynne’s approval rating consistently polls in the low twenties and projections consistently show the Progressive Conservatives on track to win a majority government. Now the champagne bottles should not be popped just yet, as the PCs have been here before (three times in fact) and somehow managed to snatch defeat from the jaws of victory, but it is hard to deny that the efforts of new leader Patrick Brown, who campaigned on a promise to double down on ethnic outreach and rebranding the party, appear to have borne fruit.

Yet, despite this, there appears to be a degree of grumbling going on among the party faithful, apparently over the decision of the aforementioned Mr. Brown to come out in favour of a provincial carbon tax at the most recent PC convention. Given the instinctive “the only good tax is no tax” knee-jerk attitude of the party base, this has been taken by some to be pure treason. I would argue to those threatening to cut up their party memberships over the news that such a reaction is overly hasty, and that there is nothing contradictory about being conservative and also supporting a carbon tax.

Now there is one key qualification, which is the pledge by Patrick Brown that the carbon tax will be revenue neutral with every penny taken in by the government in new revenue from the tax being returned to the public in the form of tax breaks (yes, Stephane Dion’s much maligned “Green Shift” also made a similar pledge, but his definition of revenue neutral was rather shaky and included money given back to taxpayers in the form of social spending and other government benefits). While I expect all politicians to lie, it is one of my many inexplicable contradictions that I tend to assume they are telling the truth until proven otherwise, so I will give Patrick Brown the benefit of the doubt that he is being honest on this point. If that is so, then introducing a carbon tax is not so much a tax hike as it is a tax reallocation and one that the conservative movement should be able to get behind wholeheartedly.

The case for a tax on carbon is very similar to that of the case for a sales tax. Aside from the most fanatical of libertarians and anti-capitalists, we all acknowledge that taxes are a necessary evil needed to keep water coming out of the taps and a paved road at the end of our driveway. By shifting the source of such needed revenues from (presumably) taxes on general income to carbon, we would merely be changing from a tax on capital to a tax on activity, which is a principle conservatives generally support and advocate as activities are usually voluntary to some extent whereas everyone needs to earn a living in one fashion or other.

It’s also undeniable that anything a tax will be levelled upon will be a discouragement towards that particular thing to some degree. It therefore follows that reducing the disincentive upon income and earnings that is income tax in favour of taxes on something like carbon is a good thing, as it creates market incentives towards cleaner sources of energy and more energy efficient technologies in general. I certainly am not a born-again climate change zealot in the mould of Avi Lewis or Naomi Klein, which is a positon sadly taken by default by far too many members of the general public despite mounting evidence to the contrary, but one does not need to be an unthinking adherent to the theory of global warming to agree that a reduction in carbon energy is a good thing. However much we can debate the effects of greenhouse gases, the effects of pollution are beyond dispute. Furthermore, carbon energy is a finite resource, so incentivizing research into genuinely feasible renewable and alternative energy sources is in our long term interest and doing so through tax incentives over government regulation and direction is something to be encouraged not disavowed.

Smaller government and lower taxes are cornerstones of conservative ideology, but simply indulging in knee-jerk rejection of taxation in general is not. The adage that too much freedom leads to anarchy is also one that conservatives have learned to respect over the years. Harnessing the powers of the market to incentive positive developments for society, while also reducing the tax burden on incomes (which it should be pointed out disproportionately weigh on the lower socioeconomic classes of society), would appear to be a win-win course of action. Ontario PCers would therefore be encouraged to move past their initial distaste for the words “Carbon Tax” and instead consider the proposed policy in full. They may find that if done right, it is not such a bad idea after all.