Round One goes to Ottawa. But the courtroom war against the federal carbon tax continues – waged by a fraternity of conservative provincial governments with more of an eye on immediate political returns than ultimate legal outcomes. They’d be happy to win in court, of course. But that’s not why they’re there.
On Friday, the Saskatchewan Court of Appeal, the province’s highest court, ruled that the federal carbon tax is constitutional. Unfortunately, that doesn’t come close to settling the matter. Saskatchewan Premier Scott Moe called it the first game of a seven-game series; from another angle, it looks more like the first act of a three-ring political circus.
Either way, legal challenges are likely to keep this matter before the courts, and in the news, until after the fall federal election. There’s a good chance it will eventually end up at the Supreme Court.
The constitutional issues at stake are complex, as demonstrated by the fact that though the majority of the Saskatchewan court upheld Ottawa’s power to bring in carbon pricing, two of five judges disagreed.
However, given the existence of the federal Goods and Services Tax, which is constitutional, operates from coast to coast to coast, and applies to virtually everything, and given the constitutionality of federal excise taxes on diesel fuel and gasoline – which like the GST have been around for a generation – it’s hard to believe that Ottawa lacks the power to craft some kind of national tax on carbon.
But for those provincial governments that have declined to implement their own local carbon pricing, thereby triggering the federal backstop – Saskatchewan, Manitoba, New Brunswick, Ontario and, just as soon as new Premier Jason Kenney can scrap the previous government’s carbon tax, Alberta – this fight isn’t really about constitutional law. It’s about making political hay out of opposition to the tax.
And out there on the hustings, especially in rural and suburban Canada, if you’re talking about taxes and gas prices, it’s always a good day for hay.
Ironies abound in our current politics, and the irony here is that the carbon tax is not, despite the slogans of every Conservative, Progressive Conservative and United Conservative Party, a giant “tax grab.”
On the contrary, if Canadians do the math, rather than looking for truth in political memes, most will find that the carbon pricing scheme is actually a small cash giveaway. The non-partisan Parliamentary Budget Officer says that in the four provinces currently affected by the federal carbon tax, 80 per cent of households will end up with more money in their pockets, not less. Most taxpayers will get back more in carbon tax rebates than they’ll pay in carbon tax.
Ottawa has committed to leaving every cent of the carbon levy in the province in which it is raised, with nearly all of the money raised rebated directly to taxpayers.
Some tax. Some grab.
The further irony is that the carbon tax started life as a conservative idea – developed by economists, designed to leverage the free market and leave decisions in the hands of individuals rather than central-planning bureaucrats. It first came to Canada a decade ago, under the right-leaning Liberal government of British Columbia. It was all kind of boring.
Bonus irony: The arrival of a 4.4 cents a litre gasoline tax, meaning an extra two bucks or so on the average fill-up, is not a national crisis. And it’s hardly the top issue facing the Kenney government in Alberta, or Premier Doug Ford in Ontario.
In the case of Mr. Ford, he inherited Canada’s lowest-spending and lowest-revenue province, and he’s pushing both spending and taxes lower. Voters will feel this. He’s squeezing the education system; it’s unclear how that will play out, but it may upset parents. He’s promising to redesign the health care bureaucracy, with uncertain consequences. And using a plan sketched out on the back of an envelope, he’s seizing control of the capital-spending side of Toronto’s transit system – the politically rewarding ribbon cutting – while leaving the city with less money to actually operate transit.
All of those moves carry risks.
Which is why, for conservative governments and parties, making the carbon tax their No. 1 issue is their No. 1 misdirection strategy. It’s supercharged, high-octane political fuel.