The introduction to the Conservatives’ new climate plan reads like their party is having an argument with itself.
It derides the Liberal government’s carbon-pricing model as a “tax hike.” Then it recognizes that carbon pricing is “the most efficient way to reduce our emissions.” Then it circles back to familiar arguments against the policy it’s just endorsed, including that it places an unfair burden on Canadians when some trade partners (including the United States) have not adopted the same approach.
This glimpse into the Tories’ inner monologue reflects what their leader, Erin O’Toole, has been going through. He has been trying to appease voters who believe his party needs to get serious about climate change, including through the market-based mechanism that should theoretically appeal to the centre-right, without alienating party members who consider any such concession a betrayal.
But give Mr. O’Toole credit. Attempting this nearly impossible tightrope walk, he has arrived at an agenda that – while deeply flawed in places – is a much more credible emissions-reduction strategy than anything the Conservatives have put forward previously.
Unfortunately, getting to the meat of the plan requires first getting past the bizarre place it has landed on the carbon-pricing question. The Tories would keep charging a levy on polluting fuels, but rather than return the revenues to taxpayers via rebates as under the current model, they would create individualized green savings accounts. Every time Canadians filled their gas tanks, they would have to pay money in; they would be able to take money out to help pay for climate-friendly goods such as bicycles or energy-efficient furnaces.
There are many reasons to be skeptical about this idea, starting with the implementation nightmare that anyone who has watched governments grapple with relatively straightforward IT challenges can imagine. Speaking of logistics, it’s unclear whether the policy would only apply in provinces that don’t have their own carbon-pricing systems, as with the Liberal version, or all of them.
It would also be more regressive than the current approach (which aims to have lower and middle-income earners come out ahead), helping the biggest consumers fund purchases they might make regardless. And since carbon pricing is mostly supposed to disincentivize spending on certain things, creating a customer-rewards program for those purchases seems counterproductive.
To make matters worse, Mr. O’Toole is proposing not just to drop the Liberals’ plans to raise the price to $170 a tonne by 2030 – which is a reasonable choice – but to lower it to $20 a tonne from the $40 that it is now, before gradually raising it back to $50. Rejecting any continuity if there is change in government needlessly undermines carbon pricing’s ability to encourage climate-friendly investment decisions.
That concern about unpredictability also applies to the Tories’ (otherwise more orthodox) proposal to keep the existing, separate carbon-pricing system for large industry. The plan says they will “be prepared” to keep increasing its price as the Liberals would. But it adds uncertainty by stating they would first try to link the industrial price to that of trading partners such as the European Union and the U.S., despite the latter not currently having one nationally.
Despite all that, the significance of the Conservative Leader embracing carbon pricing in any form shouldn’t be lost.
But it’s beyond that particular policy where the greater progress in this plan can be found.
Last election, under Andrew Scheer, the Conservatives promised to do away with carbon pricing and offered little by way of substantive policy alternatives. In fact they also planned to abandon or weaken other aspects of the Liberals’ climate agenda, making their purported commitment to Canada’s emissions-reduction targets laughable.
Under Mr. O’Toole, they are promising to go beyond the Liberals on some other fronts, to make up for not raising the carbon price as the government currently plans.
That includes not just keeping but increasing the ambition of the Clean Fuel Standard – a complex policy to mandate lower carbon intensity in fuels sold domestically, which they previously attacked as another tax grab.
To help lower transportation emissions, they are promising to require that by 2030 at least 30 per cent of all vehicle sales are electric. Known as a zero-emissions vehicle mandate, it’s a policy – strongly opposed by auto manufacturers – that the Liberals have considered but thus far eschewed.
To lower emissions from buildings, they are promising a more comprehensive retrofit strategy than Ottawa has offered to date. It includes regulatory changes, public-private partnerships and a suite of programs to help industry be ready to meet demand and homeowners know how to take advantage.
Some of the promises, such as funding for carbon capture and for small modular nuclear reactors, would help industries toward which the Tories have generally been supportive. Pledging to consider new taxes on frequent fliers and purchasers of non-electric luxury vehicles is more surprising.
As a whole, it adds up to an acknowledgment of a reality that the Conservatives have heretofore denied: Relying less on carbon pricing to meet climate targets means relying more on some combination of new spending and new regulations.
There are many caveats. Some of the plans are rather vague; others are made to sound easier to implement than they would be. Some of the policies the Conservatives are proposing could be implemented by the Liberals as soon as next week’s budget, taking away their additionality.
And there were complaints from the Conservative base within hours of Thursday’s launch, especially around carbon pricing’s inclusion in any form, raising the question of whether this plan is built to last.
Mr. O’Toole will require some fortitude to stare that down. But if he campaigns unapologetically on what he has put forward, the next election will involve a debate about whose climate plan is better, not whether one is needed at all.
The federal carbon-pricing law introduced in 2018 has been ruled to be constitutional by the Supreme Court of Canada after a challenge by three provinces, but what is carbon pricing anyway and how will it affect consumers? Note: This video has been updated to use new wording set by The Globe and Mail to describe carbon pricing.
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