After months of touting how much better his climate plan was going to be, and how it was going to replace the Liberals’ “carbon tax,” Erin O’Toole delivered a damp squib on Thursday morning, declared it a masterpiece, and that he would like a cookie, please. While I understand why certain people in the climate community are gritting their teeth to praise the Conservatives for finally coming to the table with a carbon price and offering a proposal with actual modelling that shows it might be effective if taken at face value, I am under no such obligation to offer Mr. O’Toole any cookies for his efforts because in order to make it look like he’s not swallowing himself whole – and have no doubt, he absolutely is – he has to lie about what he’s doing. And he has to lie a lot.
The first lie is to pretend that the status quo, the Liberal government’s carbon price backstop, is a tax, and by tax, we mean something that goes into government revenues. Andrew Scheer liked to say that the government’s carbon price kept rising because they needed to pay for their “out of control spending,” and O’Toole hasn’t deviated from that talking point. Of course, that’s not how the system works in those provinces subject to it – all revenues get returned to those provinces, and if the province has not designated a method of recycling the revenues (such as income tax cuts), it is returned to households in the form of rebates. For most households, they get back more than what they pay into it because they also capture the revenue from commercial and industrial emitters. The remaining funds are distributed to schools, hospitals, and so on in order to fund green upgrades. None of this money goes to federal coffers, and Conservatives will lie by omission when it comes to rebates and low-income households.
Why this matters is because O’Toole and his party are going to try to sell people on the notion that theirs isn’t a tax, it’s a levy, or a “mechanism of mandatory savings for a particular purpose,” as they have already tried to peddle. Of course, because they are using the very same pricing mechanism as the current system, they can’t call it a tax and theirs not – the only difference is where the revenues are recycled. It’s also hilarious because they have also tried to call the Canada Pension Plan a “payroll tax” and not mandatory savings program or deferred wages – which it really is – and when this is pointed out to them, they play semantic games about it.
And their revenue recycling system? Hoo boy. They are proposing that instead of households getting rebates, all carbon prices paid will be funnelled into “Low Carbon Savings Accounts,” which will operate like Air Miles points, which you can redeem for “green” things like bus passes, bicycles, energy-efficient furnaces, or electric vehicles. The more carbon levies you pay, the more you get back, but conversely, if you have very few expenditures, you get very little back, which doesn’t provide an incentive to reduce your carbon the way the current rebate system does. It also doesn’t help low-income households, but really rewards high-income and high-spending households, unlike the current system. O’Toole insists that the government won’t administer these LCSAs, but a private sector “consortium” will, like how Interac operates – but this should be absolutely alarming to everyone.
The amount of data that is going to be collected from consumers to make this happen is enormous, and aside from basic privacy concerns, that kind of consumer data is extremely valuable to the market. There’s a reason why Air Miles and Aeroplan has such a high valuation – the value of the data on consumer purchases is enormous. Does the government of Canada get to control that data? Does the consortium? Additionally, it only captures direct costs when supply chains are an issue, and landlords could be collecting points that really their tenants are the ones spending the money. It would require a huge expansion in the bureaucracy to administer, especially when they are promising carbon points on things like locally-grown foods, and determining what does and does not qualify would be an enormous logistical challenge to manage. And because this system may wind up being too unfeasible to manage, we may yet see O’Toole have to quietly scrap it and keep a form of the current rebate system with his own particular tweaks to insist that it’s different – no really!
In many places, O’Toole’s new plan simply adopts measures currently in place, like the output-based pricing on large industrial emitters, or the clean fuel standard – which, oops, Conservatives were deriding as a “hidden carbon tax” very recently. Looks like another place where they have swallowed themselves whole! In other places, the plan is way more nonsensical, particularly around the insistence that this plan will definitely work with the provinces, and that this will be a plan of national unity. That promise of “unity” will be hard to square if he keeps his promise about going harder after heavy emitters, because that means targeting Alberta and Saskatchewan to do more, which is where O’Toole’s voter base is.
More than anything, their promise to replace a transparent, market-based pricing system with one that is opaque, heavily regulatory, won’t incent change, delves into industrial policy, and which will have worse outcomes (because they insist on keeping the carbon price low) is a very curious choice – and one that they will try to sell with yet more lies. As much as certain people are saying that this plan is serious (through gritted teeth), it’s really not – it’s a bit of theatre that is designed entirely to try and take the issue of climate off the table at the next election by pretending they have a comprehensive plan, so that they can attack on other fronts – like jobs, and the economy. And as much as O’Toole is hoping for cookies for this plan, he may wind up with a number of knives in his back from his own party who was promised repeatedly that he was going to kill the “carbon tax,” and he even insisted that Peter MacKay was going to pull a Patrick Brown and accept a carbon price. Looks like that was another lie too. Funny that.
Photo Credit: Toronto Star
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