Canada's Latest Climate Challenge

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In the topsy-turvy world of climate-change altruism, Canadians young and old have learned that what matters is not what they do, but what they are seen to be doing. As David Suzuki has been telling us forever, “It's a moral issue. The issue of slavery was not an economic issue. The issue of climate change is not an economic issue.”

We know Suzuki is right because the only climate consensus in Canada—a thinly populated, northern industrial state sitting on boundless energy resources—is that even the most draconian self-sacrifice we might make in the name of “tackling climate change” will have virtually no impact on the Earth’s climate. Rather, as we are reminded practically daily, what matters is that we are seen to step up. “Canada is a small player in the grand scheme of things,” says veteran Globe and Mail columnist Gary Mason. “And what we do to reduce GHG emissions will make an insignificant dent in bringing about overall change. But that is hardly the point. We have to do our part. We have to have the moral conviction to address this problem before it’s too late—if it’s not already.” Quite right, adds political scientist David Moscrop. Canadians have a “duty” to “help set a standard for other countries who may be reluctant to give up their creature comforts.” Such earnest appeals appear to arise out of a genuine belief that it is within Canada’s power to change the course of world history by the force of its own example, as if the United States, China and India—the world’s Big-3 CO2 emitters—are waiting on the sidelines to see what kind of bullet Canada is willing to take.

So it comes as no small shock to the collective Canadian psyche that, according to a new study published by Canadians for Clean Prosperity (CCP), the federal Liberals’ proposed carbon-tax scheme will actually make individual Canadians richer. “The vast majority of households, regardless of income level,” the report claims, “would receive more money in the form of carbon dividend cheques than they would pay in carbon taxes.”

Wow.

What are we to make of such a dramatic plot twist in the country’s carbon-pollution morality play? The National Post’s John Ivison broke the report’s jaw-dropping findings last week, calling them a “game-changer.” He and others buy the essential logic of the CCP’s analysis, namely that because carbon taxes will be collected disproportionately from industrial emitters rather than individuals, they will end up not only fattening the incomes of Canadian households but redistributing wealth. Here’s the key section of the CCP document (p. 7):

We see that the largest benefit goes to the lower income families, and to those in the more emissions intensive provinces of Alberta and Saskatchewan. An upper income family in Ontario would expect to receive only about $15 more in carbon dividends than they paid in carbon costs in 2020, while a single parent household in Saskatchewan would receive $1,397 more back than they pay out. So even with an equal per capita payment, the net result of a carbon dividend system would be highly progressive. Almost all family and household types could expect to receive more money in their carbon dividend cheques than they paid out in direct and indirect carbon fees.

Again, wow.

Critics of the CCP report point out, quite rightly, that the costs of the carbon tax to Canadian businesses will themselves be passed on to consumers and therefore act as a brake on profitability and growth. “The theoretical benefits of the Clean Prosperity carbon tax rely on an assumption that higher taxes won’t cause business closures, job losses or reduced capital investment,” writes the Financial Post’s Matthew Lau. “Their carbon tax proposal isn’t just on shaky ground—it’s grounded in an alternative magical universe where business decisions are made independently of profits, and where taxes on businesses generate government revenue without anyone paying the cost.”

But the real “magical universe”—for Canadians who have internalized the message that we must sacrifice our material progress for the sake of the Earth—is likely to be the ethical one. Our politicians will undoubtedly savour the opportunity to pitch carbon taxes as net-beneficial to Canadian households—a maneuver that might well detoxify federal-provincial feuding and perhaps even mitigate real-world energy poverty. We’ll have to see. But what about Canadians themselves? Will they not recoil at the optics of profiting personally from the destruction of the planet? Will they not fall into paroxysms of guilt and anxiety for spending their carbon dividends on even bigger SUVs or even more sumptuous vacations in the Caribbean? Above all, how will it look to the Americans, the Chinese and the Indians who are waiting and watching, even now, to judge whether Canada has the fortitude to really step up?

Thanks to the CCP, we’re about to find out.