Excellent blog, Nate. Keeping in mind that we are not economists, I have a bigger issue with the Parliamentary Budget Officer's report than the absence of counterfactual climate cost calculations (which are admittedly difficult to measure given many abstract contextual factors).
Conservatives have been playing up the economic fallacy of *double-counting the same economic costs* in order to fabricate an imagined negative fiscal impact on the economy. Conservatives have been telling us that the carbon taxes are passed onto consumers (fair enough) but then also telling us that the carbon taxes create new costs for business (which is impossible to the extent that businesses are passing those costs onto consumers). I respectfully believe that the PBO is engaging in this same fallacy in his report when factoring in "Differential impacts on the returns to capital" to the "economic impact" of the tax. What is arguably missing from his report is that while businesses are (mostly) not formal recipients of the rebates, *the rebates offer an advantage for businesses* insofar as they supplement employees' livable incomes and thus depress employees' demand for higher wages. If the PBO is not considering the upside of the rebates to business income, then his report does not really give a proper aggregate value for all the gains and losses to most Canadians (never mind the unmeasured prevented climate costs).
Where I would find fault with the government however is in the inconsistent application of the tax. Setting aside the tax exemptions, imposing the policy as a "backstop" to provincial policies creates unnecessary disparate inter-provincial legal regimes for businesses in the way that a single nationwide tax would not. Also, I have to disagree with the idea of advancing the other climate programs alongside the tax. Really believing in the tax forces one to the logical conclusion that virtually all other GHG-reduction programs are *redundant* complications to the economy.
Best I've read of a balanced overview of the carbon levy. Well written for most to understand, though challenge remains with Poilievre's loud and funded disinformation campaign flooding the airwaves. This here must be shared wide and deep.
Excellent piece. I will add, any time the private sector is allowed to pollute unchecked, we have to pay for the clean up through tax payers dollars. See orphan wells as an example.
Sorry Nate, there is zero empirical evidence of man made climate change.
C02 is not a pollutant, it is the gas of life. Canada is the last country, that should be trying to set the example, large country, small population, lots of trees. Please watch the new movie. Climate The Movie. By the way, sorry to here about Terry's health issues. An old contemporary and neighbor of his.
I do understand that something needs to be done.I would just feel better if the USA/Mexico/China/Russia and India would also understand! Someone does need to go first.............but @ what cost? If the rebates will help most..................why not keep the rebates and just use them to offset? Trying to make sense of this....................
I agree, Nate. The carbon tax should go up in April, and it should stay in place past 2025. And this is why Trudeau needs to step down as leader ASAP, because he is dragging the Liberals down. With a new (even interim) leader, the Liberals have at least a faint hope of holding the CPC to a minority of seats. With him as leader, the CPCs will get a towering majority, and "axing the tax" will be one of the first things they do.
Excellent blog, Nate. Keeping in mind that we are not economists, I have a bigger issue with the Parliamentary Budget Officer's report than the absence of counterfactual climate cost calculations (which are admittedly difficult to measure given many abstract contextual factors).
Conservatives have been playing up the economic fallacy of *double-counting the same economic costs* in order to fabricate an imagined negative fiscal impact on the economy. Conservatives have been telling us that the carbon taxes are passed onto consumers (fair enough) but then also telling us that the carbon taxes create new costs for business (which is impossible to the extent that businesses are passing those costs onto consumers). I respectfully believe that the PBO is engaging in this same fallacy in his report when factoring in "Differential impacts on the returns to capital" to the "economic impact" of the tax. What is arguably missing from his report is that while businesses are (mostly) not formal recipients of the rebates, *the rebates offer an advantage for businesses* insofar as they supplement employees' livable incomes and thus depress employees' demand for higher wages. If the PBO is not considering the upside of the rebates to business income, then his report does not really give a proper aggregate value for all the gains and losses to most Canadians (never mind the unmeasured prevented climate costs).
Where I would find fault with the government however is in the inconsistent application of the tax. Setting aside the tax exemptions, imposing the policy as a "backstop" to provincial policies creates unnecessary disparate inter-provincial legal regimes for businesses in the way that a single nationwide tax would not. Also, I have to disagree with the idea of advancing the other climate programs alongside the tax. Really believing in the tax forces one to the logical conclusion that virtually all other GHG-reduction programs are *redundant* complications to the economy.
Right on. The tax on pollution is less than 2% of government's revenues - as seen in the pie chart here: https://www.canada.ca/en/department-finance/services/publications/annual-financial-report/2023/report.html#revenues. Scrapping it may be a good political make-believe win, but will certainly not turn life around for Canadians living in financial hardship, as the opposition claims. Total lie.
Thank you Nate for the helpful analysis.
Best I've read of a balanced overview of the carbon levy. Well written for most to understand, though challenge remains with Poilievre's loud and funded disinformation campaign flooding the airwaves. This here must be shared wide and deep.
Excellent piece. I will add, any time the private sector is allowed to pollute unchecked, we have to pay for the clean up through tax payers dollars. See orphan wells as an example.
How to get more attention to this? Given the incendiary scare tactics spouting easy & false answers.
Sorry Nate, there is zero empirical evidence of man made climate change.
C02 is not a pollutant, it is the gas of life. Canada is the last country, that should be trying to set the example, large country, small population, lots of trees. Please watch the new movie. Climate The Movie. By the way, sorry to here about Terry's health issues. An old contemporary and neighbor of his.
Good reporting on the energy transition is available at Energi Media - https://energi.media/
such as this article:
https://energi.media/news/the-die-is-cast-on-the-clean-economy-canada-needs-to-stay-in-the-game/
I do understand that something needs to be done.I would just feel better if the USA/Mexico/China/Russia and India would also understand! Someone does need to go first.............but @ what cost? If the rebates will help most..................why not keep the rebates and just use them to offset? Trying to make sense of this....................
I agree, Nate. The carbon tax should go up in April, and it should stay in place past 2025. And this is why Trudeau needs to step down as leader ASAP, because he is dragging the Liberals down. With a new (even interim) leader, the Liberals have at least a faint hope of holding the CPC to a minority of seats. With him as leader, the CPCs will get a towering majority, and "axing the tax" will be one of the first things they do.