On the day Erin O’Toole tacitly gave up his party’s opposition to carbon pricing (“We recognize,” he said, “that the most efficient way to reduce our emissions is to use pricing mechanisms”) he still struggled to explain why his proposal for a lower price on carbon was more altruistic than the policies Conservatives have spent more than a decade condemning.
“I have said it is a pricing mechanism for consumers,” O’Toole told reporters on Thursday. “It is not a tax.”
O’Toole surely knows that Conservatives would never accept such dissembling from a Liberal or NDP leader. But if O’Toole has a problem here, it’s likely with the Conservative supporters who have been told repeatedly and loudly that a carbon price for consumers is thoroughly bad policy — and perhaps with the Conservative MPs who have been carrying that message to those supporters for years.
WATCH: Conservative Leader Erin O’Toole rolls out his climate plan
O’Toole’s announcement could still count as progress. Justin Trudeau’s Liberals and Canadian voters have pushed climate policy in this country toward action and the Conservative Party is now moving in that direction — both by accepting the logic of carbon pricing and by tabling a plan that puts some real effort toward explaining how a Conservative government would meet Canada’s emissions targets.
But the ultimate questions for voters will be how well the Conservative proposal would work and how its impacts would compare with the existing Liberal policy. Those questions will require more study in the days and weeks ahead.
O’Toole proposes to repeal the current federal carbon levy — currently set at the equivalent of $40 per tonne of greenhouse gas emissions and set to rise to $170 per tonne by 2030 — with a new fuel levy that would start at $20 per tonne and rise to $50 per tonne. O’Toole also would change how the revenue is used.
Under the Liberal policy, which applies only in provinces that have not implemented their own carbon prices, 90 per cent of the revenue is rebated to households in those provinces on an equal basis. The other 10 per cent is directed toward special funds for schools, hospitals, businesses and municipalities.
The Conservative proposal would direct revenue into individual “low carbon savings accounts” — each time you purchase gas, for instance, an amount equivalent to the Conservative fuel charge would go into your account.
The money in your account could then be used for government-approved and environmentally friendly purchases, such as a public transit pass, a new bike, energy-efficient home improvements or a new electric vehicle. (Businesses would have access to their own savings accounts.)
O’Toole claims his policy isn’t a tax because the revenue doesn’t go to the government. To help make this argument, the Conservatives suggest that the Trudeau government, or some future government, might start diverting the money to other uses.
The Conservatives and Liberals trade places
But that hypothetical skips over that detail about the federal carbon price only applying in provinces without carbon prices of their own. If the recalcitrant conservative premiers in Alberta, Saskatchewan, Manitoba and Ontario introduce their own carbon pricing policies, the revenue going to the federal government drops to zero.
Ideologically, the two major federal parties have now swapped roles in the perennial debate over whether government intervention is a good thing. Now, it’s the Liberals saying Canadian households should be free to decide what to do with the carbon rebates, while the Conservatives would dictate how Canadians can spend their own money.
“The carbon savings account is an interesting idea,” said Stewart Elgie of the Smart Prosperity Institute. “The devil will be in the details.”
Administering the policy would be complicated, Elgie said, and the savings accounts could end up being used for purchases that would have been made anyway, or that wouldn’t have significant impacts on emissions. Transit passes, for instance, might be purchased by people who already use public transit. And the Conservatives would still have to negotiate with the provinces in order to proceed.
Independent modelling conducted by Navius Research found that the Conservative plan’s projected emissions reductions would be broadly similar to what’s expected from the current Liberal policy. Still lacking is an analysis of how the costs and benefits of the Conservative plan would be distributed across households and income levels.
The fact that O’Toole capped his carbon price at $50 per tonne — even as he acknowledged that carbon pricing is the most efficient way to reduce emissions — could be a concession to the anti-pricing sentiment his party has fostered over the last decade. But to help compensate for a lower price, the Conservatives say they would introduce “flexible regulations” setting new mandates for fuel emissions and the sales of zero-emission vehicles — regulations that likely would come at a higher cost.
Winners and losers
The Navius analysis found that overall GDP would be slightly higher in 2030 under the Conservative plan. Dave Sawyer, an environmental economist, tweeted that while businesses might be better off under the Conservative plan, households would be worse off and the cost would fall largely on medium- and lower-incomes households.
The Liberals were quick to note on Thursday that the plan would leave those who burn more fuel with more money to spend. (Here’s how the Liberals put it: “The more you burn, the more you earn.”)
Those who earn more do tend to use more fuel — but the current federal rebates are distributed equally across households. As a result, the Parliamentary Budget Officer has estimated that most households end up receiving more in rebates than they pay in additional costs — with the highest-earning households paying the most and medium- and lower-income households receiving the most.
There are other questions about the Conservative plan. The party hedges on the future course of pricing carbon emissions from large industrial emitters — a Conservative government might stick with the current price schedule, or it might not. The plan doesn’t include a commitment to climate change accountability legislation (a Liberal bill is currently before Parliament).
A large part of O’Toole’s challenge might be simply to convince Canadians that he’s sincere about this. Less than a month ago, Conservative members rejected a resolution that would have declared climate change to be real. Years before that, Stephen Harper’s Conservative government failed to follow through on its promises and plans.
But while the content of the new Conservative plan is debatable — and it remains to be seen how well it will be received by Conservatives — it’s also still possible to see it as a significant step forward for climate policy in Canada. If multi-partisan consensus is how public policy endures, Canada may have moved closer to a sustainable approach to combating climate change.
“After years of carbon price wars, the partisan divide over a climate policy in Canada just got a lot smaller,” Elgie said, “and that’s a good thing for our environment and our economy.”