Showdown on Climate Change

Doug Ford, the new leader of the Ontario Provincial Conservative Party, is set to seriously undermine Canada’s effort to bring emissions from fossil fuels to a safe level. If elected Premier, Ford will repeal programs and policies enabling Ontario to assume its fair share of the necessary reduction.

The Federal and Provincial Governments (except Saskatchewan) worked out a Pan-Canadian Framework on Clean Growth and Climate Change. The Framework is necessary to cut GHG emissions, a responsibility which Canada assumed in the Paris Accord. The Framework puts a “price” on carbon, which, in the longer term, will induce industries and citizens to reduce consumption of fossil fuels.

The Framework allows Provinces to choose the price mechanisms. Ontario has an infrastructure known as “cap and trade” already in place.  Ontario industries that consume fossil fuels must purchase a “cap” – essentially a permit to discharge GHG emissions to a level approved by the Ontario Ministry of the Environment and Climate Change.  If the holder of a cap is more efficient in its consumption of fossil fuel, it can trade the unused portion of its permit to another industry that has exceeded the level of emissions allowed under its permit.

The other mechanism for putting a price on carbon is a carbon tax. British Columbia has had a carbon tax for ten years during which provincial emissions declined. All residents and businesses pay a tax on fossil fuels they consume.  The Province remits much of the revenue obtained by this tax back to individual taxpayers.

If a province does not accept responsibilities under the Framework, the Federal Government will tax fossil fuels and/or impose caps on industry emissions in that province. The moneys received by the Federal Government will be returned to the province in which it was collected, either to the provincial government or directly to its citizens.

Back to Doug Ford’s promises. His campaign is “populist”: a promise to reduce taxes and slash government expenditures to lessen the burden on taxpayers.  He has promised to revoke the Ontario Cap and Trade Program as one of his first steps.

Ford will then be forced to confront the Federal Government when it imposes taxes on the sale of fossil fuels.  Ford will find it more difficult to foster resentment towards the Federal Government when the carbon tax money is being returned to voters.

Ross McKitrick, a professor of economics at Guelph University and a climate change sceptic, notes that “: Ford’s priorities will lead to an inevitable showdown over Ottawa’s carbon-pricing mandate”.

This showdown will be a big step backward as it will frustrate effective reductions of carbon emissions for several critical years.  Given this inevitability, Ontario voters should let Ford know that unless he drops promises that will undermine Ontario’s role as a climate change leader, he won’t get their votes.

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