Catherine McKenna says “Do right by the planet” and get the carbon tax rebate before a heat-wave kills you

“It’s not often you get to talk to people about the good news when you file your taxes,” she remarked at a downtown Ottawa H&R Block before unveiling the government’s wealth redistribution scheme called the “climate action incentive rebate”.

McKenna said it was available “immediately after filing (your) taxes” and eight out of 10 people in Ontario would “receive more money than they pay.” Barely a fortnight before her carbon tax kicks in April 1 – $20/tonne for greenhouse gas emissions in 2019, increasing $10 bucks a year to $50/tonne by 2022 – it sounded too good to be true that families of four now qualified for $307 government climate cheques, $154 for individuals.

Rising insurance costs against natural disasters in Canada had increased from $400 million to $2 billion, according to McKenna and her government “was making it no longer free to pollute in this country”, as if the burnoff from a gas-fired home furnace system was on par with spilling raw sewage into a pristine waterway. According to data from McKenna’s own department, in 2017 municipalities dumped the equivalent of 86,000 Olympic-sized swimming pools of untreated waste – 215 billion litres in all – into the nation’s lakes, rivers and oceans.

It’s also worth pointing out that Canada’s annual greenhouse gas emissions – 704 million tonnes in 2016 according to government figures – constitute less than two per cent of the global total, so taxing ours under guise of saving the planet from their noxious proliferation is akin to emptying a five-gallon pail through a pinhole.

No matter, McKenna’s latest climate change, carbon tax message delivered in the capital Friday was a toned down compared to her more ominous performance at a Hamilton H&R Block two days earlier. There McKenna spoke of heat waves “that are litterally killing people” and misrepresented the carbon tax as sanction for carbon pollution causing them rather than what it actually is: a penalty for using energy derived from fossil fuel.

“If (pollution’s) free then there’s going to be more of it. And I know I talk to kids and I say, what do you think will happen if it’s free,” McKenna said. “I’m looking at some kids right here and they’ll probably say there will be more pollution.”

In Ottawa, the carbon tax was to “do right by the planet, said McKenna. In the Steel City, her energy-as-pollution, carbon tax ruse included a shout out to British Columbia’s recent economic success under its provincial carbon tax regime: proof the federal model would work. “Guess what? Their emissions have gone down and they have one of the fastest growing economies in the country,” McKenna declared

But the province’s own data tells a different story – B.C.’s economy and emissions are growing in spite of a carbon tax. According to its figures, the province emitted 63.3 million tones of greenhouse gas in 2015, an increase of 1.6 per cent over the previous year. What’s worse is the province remains far from achieving its goal of reducing GHG emissions by 33 per cent of 2007-levels; currently B.C.’s emissions are just two per cent less than that benchmark year. The largest GHG contributor for B.C. is energy products – upstream oil and gas production – while second is transportation; energy required to move goods.

So how come B.C.’s carbon tax is not working out the way Mckenna envisions?

“Because of two fundamental issues. Elasticity of demand and the absence of substitutes,” says Sprott School of Business professor Ian Lee. “Sixty-five per cent of households in Canada rely on natural gas for heat and if you include propane and oil, it’s over 80 per cent – does anybody seriously believe that we’re going to stop heating our houses at minus-25 because you put a carbon tax on?”

In other words, B.C. produces more GHG emissions because heightened economic activity there demands more energy on top of basic requirements. In the absence of substitutes, said Lee, there is no alternative but fossil fuel.

“It’s not a discretionary good like candy, you’ve got to heat your house in the winter, you’ve got to put fuel in your vehicle to get to work, or to transport goods to market,” he said. “Those are not debates.”

Conservative MP Garnett Genuis is a longtime critic of the carbon tax, and takes aim at McKenna’s simplistic economics, “Whereby if you tax something people will consume less of it – for some things that can be true, in this case I don’t think it’s at all true.”

“Generally speaking the goods that people are using that create carbon emssions, are necessities, home heating fuel, taking their kids to family activities, going to the gorcery store and in some cases commuting,” said Genuis. “The carbon tax is designed to make everything that uses energy more expensive. That’s not a side effect of the policy, that’s the intent of the policy.”

Back in Hamilton, McKenna suggested that people could “save even more money” by changing their conventional lightbulbs to LED, buying a smart thermostat which start at $220 and changing their behaviour by “using public transit.” But Genuis said of those in more rural settings, “Most don’t have public transportation as an easy option.”

Supporting McKenna’s assertion that most Ontarians would come out ahead with her rebates is University of Calgary economist Jennifer Winter, who estimated that a $20/tonne carbon tax increases the annual cost to an Ontario household by $283. However based on federal government projections the $20/tonne regime would increase gasoline prices by 4.4 cents/litre, for a family of four whose breadwinner commutes to work, $307 would barely cover the additional annual cost of a daily 100km roundtrip.

“The debate has become very, very religious and by that I mean the religion of the Middle Ages when beliefs had a compelling hold over the minds that people don’t want to dare question any aspect of it,” said Lee of how McKenna has framed the debate around a moral imperative to save the planet. “We’re not having debates anymore, or thoughtful analysis – when I point out the elasticity problem, I’m accused of involving macro-economic theory and not dealing with the problems of global warming.”