Ottawa wrong to threaten PEI with a carbon tax

By Todd MacKay and Paige MacPherson

This column first ran in the Charlottetown Guardian and is now free to reprint.

Ottawa’s carbon tax policy is becoming cartoon-worthy. Remember the Simpsons episode when Mr. Burns fired baseball star Don Mattingly for failing to trim his sideburns, even after the player shaved half his head? Similarly, Prime Minister Justin Trudeau is threatening Prince Edward Islanders with a carbon tax even though the province is successfully cutting emissions.

Here’s the score: Prince Edward Island’s emissions dropped by 14 per cent from 2005 to 2015, according to Environment and Climate Change Canada. Under the Paris Accord, by 2030, Canada’s emissions are to be 28 per cent below 2005 levels. PEI is ahead of six other provinces in pursuit of that goal.

This raises a question.

“If the objective is to reduce carbon in the air, and we have a plan to do that, then why do we need a tax?” asked provincial Environment Minister Richard Brown. He’s rejecting the carbon tax. “We’re fighting for Islanders here.”

Opposition Leader James Aylward argues the Island is already taking important environmental steps.

“Not one of them required a carbon tax to achieve,” he said. “We can lead and protect our environment without picking the pocket of hard-working Islanders.”

Ottawa’s carbon tax is questionable. Canada produces 1.6 per cent of global emissions. A carbon tax won’t have much impact when big emitters, such as the United States, won’t impose one. But beyond the overall pointlessness, Ottawa telling PEI to reduce emissions by taxing carbon is like telling a ballplayer to trim non-existent sideburns.

Ottawa is demanding a carbon tax that will rise to $50 per tonne or about 11 cents per litre of gasoline. A University of Calgary study states the carbon tax could cost $788 per Island household. It’s a cost Ottawa is planning to impose on PEI even though it’s reducing emissions. This begs the question, is the carbon tax really about reducing emissions? Or is it just another tax?

Ottawa insists a carbon tax will make people use less fuel. But let’s check the score here, too. From 2005 to 2015, PEI’s net gas sales fell by 2.8 per cent, according to Statistics Canada. Despite that reduction, Ottawa remains determined to penalize people for the fuel they still need to use.

Here’s another important fact: Islanders already pay a lot of tax when they fill up. PEI’s provincial taxes on fuel add up to about 24 cents per litre. Combined with existing federal gas taxes, it’s already over $25 on every fill-up of a mid-size car. British Columbia’s provincial fuel taxes, including its carbon tax, add up to 22.3 cents per litre.

But Ottawa doesn’t care that Prince Edward Islanders are already paying through the nose for a basic necessity. Ottawa wants the carbon tax to force the price of gas, home heating and groceries even higher.

PEI isn’t alone in standing up to Ottawa’s carbon tax. Saskatchewan is taking Ottawa to court to block it. Ontario is joining the fray. If polls prove true, Alberta opposition leader Jason Kenney will fight the carbon tax as premier.  

Even Manitoba, which supports a carbon tax, is threatening to take Ottawa to court if the feds raise the tax too high. And while it’s tough to predict what will happen in any legal contest, Manitoba’s legal analysis argues that a province could credibly challenge a federal carbon tax by showing its own policies “would reduce GHG emissions just as effectively as the approved federal measures.”

In other words, Ottawa may not care about actual results, but the courts would. Happily, the numbers are on PEI’s side.

PEI taxpayers can’t afford to shrug off Ottawa’s carbon-tax. It will make life harder for Islanders even though they’re already helping the environment. Minister Brown, keep fighting for Islanders. The strength of PEI’s case can tip the balance against Ottawa’s flawed carbon tax.

Paige MacPherson is Alberta Director of the Canadian Taxpayers Federation.