No Joke: Trudeau’s Carbon Tax Starts Today
Bob Manning is a New Brunswick entrepreneur and business owner.
What’s the price of carbon?
That depends on what Justin Trudeau says. Next door, they developed a made-in-Nova Scotia carbon cap and trade system that will cost consumers about an extra penny per litre of gas and one per cent more for electricity. They expect this program will reduce carbon by 650,000 tonnes between 2019 and 2022. Trudeau deemed this proposal acceptable.
But here in New Brunswick, under the previous government, our plan was not to have a plan. The government of the day said they would move existing gas tax revenue into a new climate fund. Trudeau didn’t like this plan, so he is imposing a harsh “federal backstop” tax instead – starting today. Unfortunately, this is no April Fool’s joke.
The current provincial government is fighting this tax in court, but there is no guarantee they will succeed. And where were New Brunswick’s 10 Liberal Members of Parliament in this disagreement between the provincial and federal governments? Conspicuously silent.
Punished For Hitting Targets
Why is New Brunswick being singled out? Are we evil climate changers recklessly pumping out more carbon than ever before as the ice caps melt and the oceans rise?
Actually, the opposite is true. Between 2005 and 2015, carbon dioxide emissions in New Brunswick dropped from 20.3 to 14.1 megatons. We are actually ahead of the Paris Climate Accord targets where Canada pledged to reduce emissions to 30 per cent below 2005 levels. For New Brunswick, that means 14.3 megatons. We’re already past that.
New Brunswick incurred some pain to reach and exceed this target, with NB Power closing generating stations that were significant emitters of carbon dioxide. But that’s not enough for our Prime Minister. He is imposing new rules on New Brunswick that will make people in this province do more heavy lifting. We’ll see prices for gas and electricity rise sharply compared to other Atlantic provinces.
You might wonder why we’re being punished for doing the right thing and hitting the target?
Adding insult to injury, the rebate New Brunswickers will receive is the lowest of the four provinces having a carbon tax imposed on them. Will $256 for a family of four (so about $64 per person) cover the increased costs that will come with this new tax in New Brunswick? It seems unlikely.
Open Your Wallets
We don’t yet know the true cost of the carbon tax for New Brunswickers. But we know there will be a cost, so get ready to open your wallet a bit wider for a host of everyday goods and services, starting with your gas bill. Gas prices in New Brunswick are expected to go up 4 cents per litre overnight (that’s four times higher than in Nova Scotia and Prince Edward Island).
According to calculations done by the provincial government, if you drive a truck, you’ll pay about $150 more this year for gas. If you heat your home with oil, you will pay nearly $110 more this year. And then there are the hidden costs as the carbon tax gets passed on to consumers by businesses, as the cost of every new tax inevitably does.
NB Power recently warned that the carbon tax will add $18 million to its operating costs in 2020. It already sought a 2.9 per cent price increase for residential customers beginning in April. That increase won’t cover the costs of the federal backstop carbon tax, so consumers should be prepared for another price hike in 2020.
Impact of Carbon Tax In Atlantic Canada for 2019
So, it’s clear the carbon tax isn’t treating Canadians equally. Keep that in mind when your local MP trumpets the “rebate” you will be getting from the federal government.
And make no mistake, the carbon tax is a tax. The money it takes from consumers and businesses in New Brunswick is being rolled into the federal government’s general revenue fund rather than being earmarked for investments into new technologies to address climate change.
Tackling Climate Change
Now, all of this doesn’t mean climate change isn’t real. Anyone paying attention understands that our climate is changing, that we are in the midst of a warming cycle, and that human-created carbon dioxide emissions are a big reason why. We need to address this, and quickly.
Implementing a cost for carbon is bound to be complicated. But the carbon tax imposed on New Brunswick is poorly conceived and executed. Taxes like this are a crude way to shape behaviour. They actually serve to disincentivize innovation by simply passing the cost on to the consumer. Why would a business bother to invest in new technologies to cut their emissions when they can maintain the status quo and have the consumer pick up the tab?
Canada is a smart country filled with bright innovators who are ready to tackle the challenge of climate change. We need to unleash their creativity, not stifle it with yet another tax that takes money from the pockets of Canadians and makes our businesses less competitive.
And if a carbon tax is to be imposed, at a minimum the pain should be distributed equally across Canada. Today, New Brunswick will pay more than its fair share.
That’s just wrong.
Bob Manning is a New Brunswick entrepreneur and business owner raising his family in Saint John. He is past Chair of Enterprise Saint John and the Saint John Chamber of Commerce and is a former Board Member of the Canada Revenue Agency. He writes an occasional column for Huddle addressing important business issues.
Huddle publishes commentaries from groups and individuals on important business issues facing the Maritimes. These commentaries do not necessarily reflect the opinion of Huddle. To submit a commentary for consideration, contact editor Mark Leger: [email protected].