KEN BOESSENKOOL AND MIKE MOFFATT
SPECIAL TO THE GLOBE AND MAIL
PUBLISHED OCTOBER 29, 2021

After more than a decade of hard, public democratic debate between the “no carbon tax” crowd and those advocating for a “carbon tax now,” the latter has won. Today, in Canada, there is no credible winning political coalition for any party that can be constructed without some form of carbon tax.

And that, we think, is worth a bit of a victory lap.

To understand how we came to that conclusion, a history lesson is in order.

For many supporters of carbon taxes as a way to address climate change, 2008 was a watershed federal election. On one side were the federal Liberals and their centrepiece policy, the Green Shift, that proposed a carbon tax with most of the proceeds rebated back to Canadians. On the other side were the Conservatives, who countered that the Green Shift was a “tax on everything.”

Stephen Harper’s Tories decisively won that vote, and mythologies around Canadians’ appetite for a carbon tax began to catalyze from there.

The narrative among the right was that fighting tax increases was far more electorally rewarding than promising to implement new ones governing carbon. A concurrent mythology grew in many quarters on the left, that carbon taxes were politically toxic. And for some, this easy mythology hardened into orthodoxy.

But the orthodoxy was challenged from time to time. Even before the Green Shift election, the provincial Liberals in B.C. (a province-specific coalition of federal Tories and right-of-centre federal Grits) brought in a carbon tax balanced by equivalent tax cuts and rebates. The BC Liberals went on to win the next election, even though the BC NDP spent a good portion of it railing against the provincial carbon tax. The provincial NDP eventually flipped on carbon taxes, and the policy remains in place in the province today.

Ontario and Quebec, meanwhile, passed legislation to create cap-and-trade systems in 2009, arguably choosing the cap-and-trade approach to avoid saying that unpopular phrase, “carbon tax.” Quebec implemented its cap-and-trade system in 2013, which is operating to this day. The Ontario Liberals, on the other hand, implemented cap-and-trade in 2017, only to have it repealed by the Ontario Progressive Conservatives who, in the 2018 election, actively campaigned against the imposition of any carbon tax. (Full disclosure: one of us worked on this platform.)

The Alberta New Democrats announced their intention to introduce a comprehensive provincial carbon tax in 2015, which took effect in 2017. The newly created United Conservative Party ran in the next election on repealing that tax, and when it won the next election handily, it did just that.

In the meantime, the federal Liberals introduced a national carbon tax in 2018 to serve as a “backstop” for any province that didn’t implement an equivalent system on its own. Alberta, Ontario and Saskatchewan vowed to wage a legal fight against this federal backstop. In the 2019 federal election, Conservative leader Andrew Scheer joined this fight, campaigning on repealing the federal carbon tax. But he and his federal Tories lost to Justin Trudeau’s Liberals, who formed a minority government in 2019, doubled down by proposing a significant increase to the carbon tax, and were in power when the Supreme Court found that the federal backstop was, despite the protestations of the premiers of those provinces, constitutional. After Mr. Scheer stepped down as federal Conservative leader, Erin O’Toole took over and proposed his own form of the carbon tax, a “personal low-carbon savings account” that would replace the Liberals’ government-centric plan. Another election was held, and the Conservatives lost again. Once again, the carbon tax itself was deemed politically palatable.

As a result of all these democratic battles, then, all Canadians today pay some sort of carbon tax – whether of provincial design, federal design, or some combination. Alberta now has its own industrial carbon tax but allows the federal government to collect and distribute the revenues from a retail carbon tax; Ontario’s version will soon come online.

So the carbon-tax axioms we thought we knew have been tested across the country at least twice since 2008, and multiple times in some jurisdictions. Canadians from coast to coast have had multiple opportunities to vote on the issue, in elections where the ballot question was something like “carbon taxes are an unaffordable tax on everything” or some variant of “carbon taxes are essential tools for fighting climate change.” Carbon taxes, as a policy, survived them all.

It’s time, then, that we took stock of whether the hoary old narratives still hold. As two policy wonks from the two main Canadian political traditions, we are here to say: It doesn’t. There is no longer a viable political coalition to be built around fighting carbon taxes.

Don’t just take our word for it. Our friends at Clean Prosperity (where one of us chairs a volunteer strategic advisory group) commissioned a 5,000-person poll from Leger that was conducted in the days following September’s federal election. When asked what the top priority of the incoming government should be, more Canadians surveyed said “climate change and its effects on Canada” than “the level of taxes Canadians pay.” Interestingly, that difference was even starker among younger folks (18-34) and older folks (65+) than it was among those in between those age groups. Unsurprisingly, the very top spots were taken up by “the post-pandemic economic recovery” and “managing the fourth and subsequent waves of the pandemic.”

So at a high level, more Canadians think the government should prioritize climate change than how much we’re taxed. That, we suspect, is a big, er, shift since 2008.

And when asked whether they could support a political party without a credible climate plan, a clear majority of those surveyed (57 per cent) said they could not, while just over a third (36 per cent) said they could. The rest didn’t know. Again, concern about a party’s climate plan is higher among the young and the old than among those between; perhaps the kids are convincing their grandparents of the need for action. Interestingly, differences are smaller between males and females than among those of different ages.

On questions of the need for “clear targets” including “moving to net zero,” three-quarters of Canadians agree with these statements of ambition, with a mere 15 per cent to 16 per cent respectively opposed. The remainder don’t know. This is also reflected in a myriad of questions around whether the various political parties or provinces should be doing “more,” “less,” or some middle ground. “Less” rarely scores above 15 per cent among any demographic, and is more commonly closer to 10 per cent.

Clearly, the Canadian appetite for more action on climate policy is resounding. Only the smallest group of Canadians think we should be doing less.

But what about on the specific question of carbon taxes? Do Canadians want us to do more for everyone else, but not pay more themselves?

The Leger poll asked respondents, “do you support or oppose a carbon tax policy as a way to address climate change?” – as straight-up a question as can be imagined on whether Canadians are open to carbon taxes. And there was good news on that front: an absolute majority (52 per cent) of Canadians do support them. Only 34 per cent say they oppose the use of carbon taxes for climate change. That’s not nothing, but it’s decisive in this way: In Canada, you can’t build a winning coalition with only one-third of the public in your corner.

While support is slightly higher among the younger set, it is pretty steady through the age groups. The bigger differences, not surprisingly, come regionally: Equal numbers of people (44 per cent) are for and against carbon taxes in Alberta, straight-up. Next door in B.C., majority-support of 55 per cent matches that in Quebec, with opposition to such taxes in the low-30s in both provinces. Ontario’s 905 region slots in between Alberta and B.C./Quebec, with the rest of Ontario aligning more with B.C. and Quebec.

But by sweetening the pot – or, as we’d prefer to call it, tailoring the policy and executing it well – you can bring along a chunk of those against the carbon tax. Indeed, the survey asked what respondents thought of a policy where “all the money from the tax was being rebated back to families and businesses.” That increased support for a carbon tax to 61 per cent, with opposition dropping to 27 per cent. This formulation is most popular in Atlantic Canada (65 to 22), and even in Alberta, this style of tax – which is actually already in place there, in the form of a federal backstop – gets 60-per-cent support and lowered opposition to 30 per cent. Prefer cutting income taxes to providing rebates? That doesn’t change much across demographics, region or income level.

So the answer is clear: The mythologies from 2008 are dead, and carbon taxes are here to stay. The only thing that’s left to do now is to productively argue about the best way to design and implement carbon pricing in Canada. And with that hard part behind us, and the eminently reasonable work to come, our two political movements will happily resume our disagreements.