CHARBONNEAU – Instead of axing the tax, axe the subsidies to Big Oil

CANADIANS MAY BE OUTRAGED at the carbon tax/rebate but give little thought to the subsidies they give Big Oil. The corporate fat cats would rather keep quiet your gift to them.

These subsidies cost Canadian taxpayers $6.03 billion. That’s about $214 per taxpayer every year.

And unlike the federal carbon tax, Canadians don’t get a rebate on subsidies.

Most middle and low income Canadians actually make money on the carbon tax/rebate. According to data from Statistics Canada, 94 per cent of households with incomes below $50,000 receive rebates greater than the carbon tax they pay.

Big Oil makes lots of money, so why do we have to subsidize them?

British Columbia, Alberta and Saskatchewan give more than $2.5 billion in royalty reductions and tax exemptions to the fossil fuel industry every year.

The glib leader of the Conservative Party, Pierre Poilievre, knows a populists slogan when he hears it. He wants to “axe the tax.” It’s a catchy phrase that rhymes, and appeals to fossil fuel consumers who don’t understand how the carbon tax/rebate works.

The carbon tax/rebate works to reduce greenhouse gas emissions in a way that conservatives should applaud. If you want to sell something that is wreaking havoc with the planet, increase the price. If you want to sell something relatively benign and you have plenty of it, lower the price.

It’s the genius of the “invisible hand” of the marketplace, as the father of modern economics Adam Smith would but it.

Think about other rebate scenarios. When was the last time you paid more for groceries and the grocer gave you back the increased cost?

Poilievre, a skilled career politician, knows ignorance when he sees it. He promises something he can’t deliver if he becomes prime minister.

He knows that the federal carbon tax is only being applied in Saskatchewan, Manitoba, Ontario and New Brunswick.

Sure, the price of carbon will increase in other provinces but only because those provinces agree with the feds that carbon pricing is the most effective way of saving us from the disaster of climate change.

If Poilievre gets in power, he’ll shrug and say: “oh well, I know I promised to axe the carbon tax but I didn’t realize that the feds only apply the tax to four provinces. It’s the fault of the provinces.”

B.C. can take some pride in being first in North America to understand the dynamics of the carbon marketplace.

Under a right-of-centre government, the BC Liberals put a carbon tax in place in 2008 on fossil fuels burned for transportation, home heating, and electricity. They reduced personal and corporate income taxes by an amount roughly equal to the tax.

Then in Ontario, the pre-Doug Ford PC Party was all for a revenue-neutral carbon tax.

In 2014, Preston Manning, the godfather of Canada’s modern conservative movement, came out in favour of carbon taxes.

Poilievre would rather we forget that carbon pricing is a worthy conservative idea.

If he were honest, Poilievre would return to conservative roots and forget about the populist chatter borrowed from south of the border.

David Charbonneau is a retired TRU electronics instructor who hosts a blog at http://www.eyeviewkamloops.wordpress.com.