Green shift in Ontario taxes?

Wynne’s cap-and-trade is smoke and mirrors.

(This column originally appeared in the Toronto Sun)

By: Candice Malcolm

Ontario Premier Kathleen Wynne’s plan for imposing a new carbon tax regime is a house of cards. The scheme starts to falter under even the slightest weight of inquiry; the more we learn, the worse it gets.

Ontario signed the Western Climate Initiative in 2008; the Liberal government has had almost a decade to fiddle with the plan, and yet, when Premier Wynne announced the cap-and-trade scheme on Monday, the details were missing.

Even worse, the facts that were provided do not stand up to simple scrutiny.

This is what we know so far: the province will cap emissions allowed in each industry and bring in a corresponding permits to fund infrastructure and new projects aimed at reducing emissions. Then, the government will create a process to reward companies that reduce greenhouse gas emissions, and that the scheme will fall into a long-term plan to join the Western Climate Initiative cap-and-trade market, which includes Quebec and California.

Let’s go through each of these points, just so we don’t miss anything.

The provincial government will place a ceiling on emission allowed from each industry. Who will set this ceiling? Bureaucrats and politicians? How does drawing an arbitrary line in the sand help us when most places around the world have no limit whatsoever. This is like placing handcuffs on Ontario’s industries and making our province less competitive.

The proceeds from the scheme will go towards new projects that reduce emissions. So, the new revenues flowing into the Wynne government’s coffers won’t go towards debt repayment, balancing the budget or cutting taxes for hardworking Ontario workers? Nope. Instead they’ll go to fund more government pet projects.

The government will then create a process to reward companies that reduce greenhouse gas emissions. The plan is to create a slush fund for the Wynne government to dole out corporate welfare “rewards” to friendly corporations. Sounds like a recipe for cronyism and corruption.

This is part of a long-term plan to join what the government and several media outlets called the “largest cap-and-trade market, which includes Quebec and California.” Includes? That word suggests that Quebec and California are two of many jurisdictions signed up to the Western Climate Initiative. In reality, this initiative includes only Quebec and California. Every other jurisdiction – including four of the five founding US states – has already left the agreement.

Also, the world’s actual largest cap-and-trade market is the Emissions Trading scheme in Europe. As Lorrie Goldstein pointed out in his recent column, the EU’s cap-and-trade market is plagued with corruption, tax fraud, special deals for friendly companies, and worst of all, it doesn’t actually reduce emissions.

Aside from these vague points that are more like platitudes, we were told that the scheme will include a 2.5 or 3 cent increase on gasoline. Taxpayers will get hit up, while few special corporations are rewarded.

Premier Wynne and her Carbon Tax Minister Glen Murray like to point out that many economists agree with placing a price on carbon. What the Wynne government conveniently doesn’t like to point out is that these economists recommend changing the entire tax structure so governments tax carbon emissions rather than income. These economists call for reducing income taxes to correspond with increases to carbon taxes or a government-set carbon price.

So, Premier, where are our tax cuts?