Why conservatives are wrong.
Because they're conservatives.
Why conservatives have it wrong about Trudeau’s carbon tax
Saskatchewan Environment Minister Scott Moe recently described the Trudeau government’s announcement as “National Energy Program 2.0.” Premier Brad Wall argues it’s going to siphon $2.5-billion out of the province and $1,250 a year out of the pockets of the average family. We don’t see how that arithmetic adds up.
Yes, any extra tax, no matter how small, is deplorable if the levy is unnecessary, or the money wasted. But in the case of the carbon levy, every cent raised remains within the province. Each province can design its own system and use the money however it likes. Not one red cent has to go to Ottawa.
A conservative provincial government, like Mr. Wall’s Saskatchewan Party, could decide to take advantage of higher taxes on gasoline, diesel, natural gas and coal to lower taxes on things everyone wants more of, like income and investment. A conservative-minded premier could promise to turn every dollar of carbon levy into a dollar in tax cuts. That would make for an interesting contrast to Alberta and Ontario, which are largely planning on spending their carbon billions.
The idea of making a carbon tax “revenue-neutral” was pioneered by B.C. The $1.2-billion a year raised by its $30-a-tonne carbon tax is used to lower the province’s middle-class income tax rate and provide benefits for lower-income British Columbians. Some carbon-tax cash is also used to support the province’s film industry – so, no, it’s not perfectly revenue-neutral. But it’s close.
Consider the opportunity for a province like Saskatchewan. A middle-class taxpayer there currently pays more basic provincial income tax than someone with the same income in B.C., Alberta or Ontario. A carbon levy would allow the province to lower income tax rates, as B.C. did – with no need for spending cuts or deficit financing.
Or Saskatchewan could cut its provincial sales tax, currently 5 per cent. That would not be economically wise, but it might be politically popular. (The Harper government, which lowered the federal GST from 7 to 5 per cent, certainly thought so.)
Why conservatives have it wrong about Trudeau’s carbon tax - The Globe and Mail