Carbon pricing is conservative policy that works

Guest Contributor
December 6, 2023

By Catherine McKenna

Catherine McKenna is a former minister of environment and climate change in the Justin Trudeau Liberal government who introduced Canada’s national carbon pricing system in 2017. In 2022, as Chair of the United Nations High-Level Expert Group on Net Zero, she issued a global report on bringing greater integrity to net-zero commitments by business, financial institutions, cities and regions.

Canadians know that extreme weather caused by climate change – devastating wildfires, storms, floods – already costs us billions of dollars. Canadians can also see we are now in a global race with the United States, Europe and China to attract investment in clean energy that creates growth and good jobs.

So you would think that serious politicians would agree that carbon pollution can’t be free – that it should be priced with predictable increases to encourage people and businesses to choose cleaner, less expensive energy solutions that also create good jobs and grow our economy.

You would be wrong.

Life is full of ironies. Using pricing to change behaviour is a strategy drawn from conservative playbooks. By setting a price, a market can work its magic and people can make the best choices for their businesses and families.

This is the logic at the heart of Canada’s approach to meeting its climate commitments and driving carbon pollution out of our economy and environment.

But because I’m not a conservative and know that markets often hurt people who can least afford it, I made sure that the federal approach to carbon pricing had a special protection built-in: it’s revenue neutral. This means that the money raised by putting a price on carbon is transparently rebated in the form of a quarterly Climate Action Incentive rebate made directly to Canadians’ bank accounts.

This can seem complicated but it’s not. Yes, the price of fossil fuels will rise, but most Canadian families are better off with rebates and the choice really is theirs: use the money to offset rising energy prices or use it, alongside other government incentives, to save more money long-term by switching to less costly forms of heating and transportation.

This isn’t something I expect our political opponents to advertise, but it doesn’t stop it from being true. Nor does it change the fact that Canada’s carbon pricing system follows the same approach successfully pioneered by conservative politicians.

Think premier Gordon Campbell who created Canada’s first carbon pricing system in British Columbia. Quebec premier Jean Charest made common cause with the all-American Republican governor Arnold Schwarzenegger to set up a carbon market that, despite opposition in Quebec and California, propels both economies forward.

Windfall tax needed on oil and gas industry

But we have today’s federal Conservatives refusing to take lessons from their own. And remember that while we are in a fossil fuel climate crisis, the oil and gas industry plays a double game, generating massive profits they return to shareholders while charging consumers exorbitant prices. At the same time, they demand huge public subsidies to clean up the pollution they cause, while walking away from their already modest climate commitments.

This is why an oil and gas windfall tax is overdue. It would address the climate crisis and improve affordability by helping families transition to lower-cost, clean energy. According to the Parliamentary Budget Office, the same windfall tax currently paid by Canadian banks and insurance companies, if paid by the largest Canadian oil and gas companies, could generate $4.2 billion in proceeds in just five years.

The problem here isn’t carbon pricing. It’s our reliance on outmoded carbon-intensive technologies, including home-heating systems.

A windfall tax can help Canadians make the switchover.

Though we might not always like it, the bottom line is governments exist to do hard things, and fighting climate change is about as hard as it gets. Voluntary action and goodwill aren’t enough. Neither is magical thinking or the willful ignorance of scientific fact – or, in this case, basic economics.

Not only do Canada’s Conservative politicians want to eliminate the most effective and efficient policy that actually works, the reality is that behind their rhetoric it is clear they have no credible plan to tackle climate change.

Canada is a country that can do hard things. We don’t shrink from a fight or shirk our responsibilities. Climate change is the fight of our lives. We have to hold the line on across-the-board carbon pricing and keep moving forward.

Pierre Poilievre and the Conservatives have no credible plan – only to pass on the biggest environmental and economic debt ever to our kids and grandkids.

Watch CBC's Rosemary Barton's interview on YouTube with Catherine McKenna from COP28.



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