Ontario is signing onto a failed initiative led by two jurisdictions best known for their high tolerance of government debt, mismanagement and corruption.
(This column originally appeared in the Toronto Sun)
By: Candice Malcolm
According to recent media leaks, the Wynne government is just days away from unveiling a new cap and trade program, the latest euphemism for a carbon tax. Rather than calling it what it is, a tax, the government prefers to construct a complex and obscure carbon “market” to put a price on emissions. Much like a tax, the scheme will result in billions of dollars being transferred away from taxpayers and into the coffers of the cash-strapped provincial government.
A key argument used in favour of implementing a carbon scheme in Ontario is that we’ve has fallen behind on our commitment to the Western Climate Initiative, or WCI. The Wynne government continues to whisper to journalists that Ontario has already signed onto the WCI, and that other members include Quebec and California.
Considering how frequently we hear about the WCI and Ontario’s commitments to it, there are surprisingly few details being written about the initiative itself and the framework Ontario will be joining.
What Premier Wynne likely doesn’t want Ontario’s taxpayers to know it that the WCI has proven to be a hopeless failure; so much so that four out of five charter members have already walked away.
WCI started in California in 2006 by none other than Arnold Schwarzenegger. The former movie star turned governor managed to convince four other Western states to join together and create the Western Climate Initiative. Hence the name. In 2007, membership was expanded to include a handful of Canadian provinces and a few more US states.
But then 2008 happened. WCI lost its momentum and its member states lost their appetite to bring in a comprehensive taxing scheme in the midst of a deep recession.
The financial crisis was just the beginning of WCI’s woes, and soon many questions began to surface about its structure and governance.
WCI was incorporated as a non-profit corporation in the state of Delaware; registered anonymously in the state known for its lax corporate laws. Why would a government initiative from California be set up as a shell corporation in Delaware?
Watchdogs once again cried foul when the CEO of the California Air Resources Board – the governing body put in charge of overseeing the WCI’s cap and trade scheme – was also listed as the WCIs Chairman of the Board. How could the person in charge of overseeing the auction also be the auction’s Chair?
In 2011, Arizona, New Mexico, Washington, Oregon, Utah and Montana formally withdrew from the WCI, and BC and Manitoba politely stepped away.
The so-called Western Climate Initiative was left with only three members: California, Quebec and Ontario.
Even if you believe carbon taxes are necessary to curb greenhouse gases, there must be broad consensus in order for them to work. If one province or state imposes carbon taxes while its neighbours do not, the carbon-taxed jurisdiction puts itself in an economic disadvantage without doing any environmental good.
It’s like voluntarily tying one hand behind your back for a fight.
That’s why Premier Wynne is pretending there is a broad consensus, rather than being honest about the sham that is the WCI. Behind the spin, it is clear that Ontario is signing onto a failed initiative led by the two jurisdictions best known for their high tolerance of government debt, mismanagement and corruption. Three’s company.