Our Reaction to Ontario PC Revenue Neutral Carbon Tax Plan

In Newsletters
Scroll this

Last week, Ontario PC Leader Patrick Brown announced his “People’s Guarantee” election platform, which featured a revenue neutral carbon tax – with carbon revenues refunded as tax reductions – as a central plank. On Sunday, the Toronto Sun published our thoughts on the plan. I argue that “the PC’s carbon tax swap is a win-win for the environment and the economy,” as it will reduce emissions in Ontario more than cap and trade, while returning all revenues to households and businesses, giving the economy a boost.

Read our thoughts in the Toronto Sun

More reactions to the plan can be found in economist Trevor Tombe’s piece in Macleans and this blog post by economist Dave Sawyer of EnviroEconomics.

Saskatchewan Tries a Regulatory Approach

Saskatchewan finally released its long-awaited climate plan, which they argue is an alternative to carbon pricing. While their plan acknowledges the “very real problem of climate change,” the actions it proposes fall short.

The plan contains a grab bag of new regulations and new program spending, but neither the economic costs nor the emissions effectiveness of the plan are described, leaving that for future consultations. A few targets are mentioned, but overall provincial targets or costs per tonne of reduction are not given. The plan does include a form carbon pricing system for large industrial emitters, with revenues to be invested in a technology fund. But by excluding oil and gas and electricity, the carbon pricing system would cover only about 6% of Saskatchewan emissions.

Saskatchewan’s plan may set the province up for a confrontation with the federal carbon pricing “backstop” mechanism, which the federal government has said it will impose on provinces whose plans fall short of the national standard. The province may be left with expensive and inefficient regulations, but still have to face a federal carbon price anyway.

Canada’s Ecofiscal Commission has written a great piece on Saskatchewan’s climate plan here.