Trudeau challenges premiers to suggest alternatives to carbon tax hike

Alright, welcome back. We’ve just got our hands on a letter from the Prime Minister addressed to some of the country’s premiers. In it, Justin Trudeau says when we last engaged with provinces and territories on carbon pricing in 2022, all of your governments either did not propose alternative systems or, with the exception of New Brunswick, proposed systems that did not meet the minimum standard for emissions reductions. However, we continue to remain open to proposals for credible systems that price pollution, reflect the unique realities of your regions, and meet the national benchmark.

This comes after mounting provincial pressure across the country against the Liberal signature climate policy. Seven provinces have opposed the planned April 1 increase of the carbon tax, and four at least want to testify in front of MPs this week. The fire panel is back to talk about that.

My favorite line in this letter is the first one: ‘Thank you for raising the issue of Canada’s carbon pricing system.’ I’m not sure he really means thank you, but the Prime Minister is essentially saying back to the premiers, ‘Okay, you don’t like our plan. What is your credible alternative to deal with this challenge?’ What do you make of this move?

Well, you know, I don’t know that you’re going to win a debate by sending a letter, but it is good to put all the arguments together in a letter so that it can be circulated, so that it can be easily passed around to caucus and to give you talking points across the country. They’re asking for a plan that is within a carbon pricing scheme, and fair enough. Nobody’s really offering alternatives. They have simple ones: to axe it, to get rid of it, and/or to at least not do the increase. So, you know, I don’t think that any of these folks that he’s dealing with are actually interested in a solution. I think that there’s probably a lot more partisan coordination going on right now to kind of keep this issue on the table. So, it was kind of a tactics meeting of what can we do? Well, let’s go testify at a committee. There we go, we’ve got a bunch of other spokespeople who can kind of keep this in the window.

As the tax increase comes in on April 1, it will probably not be as noticeable if it’s not pointed out. For many, it might not be quite as noticeable. So, you know, I think that they’re doing something smart politically in terms of keeping the energy into the debate, but it’s going to take a lot of fuel to kind of keep it going. And I pulled out that with fire season coming, I think more demand will come on them to actually have solutions and to have alternatives.

Well, Cheryl, that seems to be where the government wants us to go, right? And it’s interesting the Prime Minister is taking this on because Steven kbo can’t really fight with the premiers on sort of unequal footing. But in this letter, they’re trying to put what they view as the merits of their plan on the table, saying rebates are about to go up. But also saying it is critical to dispel the misconception that Canada’s carbon pricing system is a significant driver of inflation because that is demonstrably false. And they say, according to the Bank of Canada, the carbon price is only responsible for about 0.1 percentage points of annual inflation. They’re putting math on the table, and what’s been sort of a philosophy argument right? I mean, which is great, facts on the table are always a good thing, but in this current political environment, it kind of seems like that doesn’t matter. People will take any sort of, people have been taking that even that specific number that the Bank of Canada has said about the price and carbon and how much it juices or doesn’t juice inflation, and have been just going in a completely different way with it. Same thing with the PBO report, you can take the same number and make a completely different argument, and if your team is, if people are listening to your team, that’s what they’re going to go with, and that’s what they’re going to remember.

I do think it is interesting in this particular time for the Prime Minister to say, yet, hey, what is your plan? Where is your idea? Why haven’t you come up with something that is not just ‘we’ll get rid of it’ because that’s clearly not on the table. Obviously, yes, we know that the Liberals hurt themselves with the home heating oil carve-out, giving the opening, the door to saying we could pause it because we are willing to do it in this other environment. But by and large, the carbon price it seems is not going anywhere so long as the Liberals are in government. So to now say for the premiers to say, ‘Hey, we want to come to committee when there is no committee meetings Parliament is not sitting this week. They, there was no this action wasn’t taken last week when they could have at least said, “Okay, we want to go to the finance. I know it’s a little insight baseball, we want to come to the finance committee. We can request an emergency meeting. We can do like those types of things to actually get a committee meeting on the books and on the schedule, but that wasn’t done. So now you have an opposition-led committee that is not financial just for the ability and opportunity for these premiers and the conservative MPs to keep the issue at the forefront, give them the opportunity to get their social media clips and all the rest. Nobody is expecting that premiers are going to go for a committee and the prime minister is going to say, ‘Oh man, you know what, so and so got me once, he went to Ottawa, he’s like, ‘You’re right, let me pull the plug on this.’ No, this is politics, right?

And Kate, I get that, like, you know, the Liberals are trying to put out what they say is the mathematical underpinning of the signature policy. The premiers are pointing to the cost of living, the 3.3% increase in the price of gas. But look, we just had the hottest winter in Canada ever, according to the United Nations, are the hottest they’ve ever been. Alberta still has wildfires that started last year that the winter didn’t provide enough snow and precipitation to put out, and there’s already warnings of drought in Alberta. There are other numbers that come into this, and you don’t need carbon pricing to have a climate plan. But when does the conversation shift to actually what is your climate plan, you know what I mean? Like, this is something the country has to talk about if we’re not going to continue with the plan we have right now.

Yeah, and that line of argumentation I think also would have been welcome in October when they made a carve-out for home heating oil in Atlantic Canada, which they only did because they noticed or they acknowledged the cost increase that it would have on households. So you have a government trying to kind of cut both ways on this issue. They’re saying we are in dire need of a carbon pricing scheme to make sure that we’re curbing behavior and getting people to change their behaviors. But they’re also saying that you will be made whole or better off. Well, if that were the case, what’s the point of the tax at all, right? Are you introducing this to actually change behavior or are you doing it as a flow-through for a rebate? Which, to the PBO’s point, not everybody is being made whole by this. 60% of households in seven provinces are not being made whole this year. That jumps to 80% by 2030. So this is, you know, the argumentation that people are going to be made whole can’t really coexist with the argument that we need this to protect the environment. And they should be open to receiving alternative plans that aren’t based exclusively on a carbon tax, right?

And look, the carve-out’s national for home heating oil, but admittedly it was fueled by the politics of Atlantic Canada. So, and a backdrop of Atlantic MP. Listen, I totally get it, but as an Atlantic Canadian, I get yelled at when I don’t point out that this applies across the country. So I just wanted to lay that on the table.