Michael Taube: New Democrats haven’t learned from their Liberal carbon tax mistake

The federal and provincial NDP are retreating away from Trudeau's imploding carbon pricing scheme, but not to the degree they need

Published Sep 19, 2024  •  Last updated 0 minutes ago  •  4 minute read

NDP leader Jagmeet Singh speaks to the media at the party's caucus retreat Thursday, Sept. 12, 2024 in Montreal. Photo by Christinne Muschi/THE CANADIAN PRESS

Guess who’s become the most vocal critic of Prime Minister Justin Trudeau’s federal carbon tax? Brace yourselves: the NDP.

The first attack came from NDP leader Jagmeet Singh. He supported the Liberal carbon tax in the House of Commons, and sang its praises to the highest mountain top. Singh isn’t singing from the same political songbook any longer, however. He dropped his support for Trudeau’s pet project last week like a bad habit. The NDP leader now desires a policy that won’t “put the burden on the backs of working people, where big polluters have to pay their fair share.” His party will release its own plan in a few months’ time.

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The coup de grâce came courtesy of B.C. NDP Premier David Eby. He leads the province that’s most to blame for Canada’s unnatural infatuation with carbon taxes, but walked away from it, too. Eby slammed the Liberals for “politicizing” the federal carbon tax with large hikes and provincial exemptions. He said B.C. would eliminate this tax from consumers and, if Ottawa removed the federal backstop, would make “big polluters pay the carbon price.”

Miracle of miracles! The impossible became possible! New Democrats have finally seen the light!

Well, not exactly.

The NDP ended the controversial supply and confidence agreement it had with the Liberals earlier this month. Singh and his senior advisors privately know that Pierre Poilievre and the Conservatives would win a big majority if an election were held today. Hence, they’ll support the Liberal minority government on a case-by-case basis and start the process to leapfrog the Liberals and become the leading voice of progressive-leaning Canadians. The best way to do this is to strike out on your own, and not be dragged down by being associated with Trudeau’s mediocre and ineffective leadership. Taking ownership of the carbon tax is part of the NDP’s forthcoming election strategy, it seems.

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B.C.’s New Democrats have a similar concern. They’re neck-and-neck in the polls with John Rustad and the BC Conservatives, who have never formed a provincial government but have emerged as a real political alternative, causing the right-leaning BC United (the old BC Liberal Party) to suspend its election campaign. Eby and his senior advisors know the provincial election, which must be held on or before Oct. 19, is a toss-up. They also know that many British Columbians are fed up with Trudeau’s federal carbon tax. As the old saying goes, if you can’t beat ‘em, join ‘em.

Here’s the other part of the equation. While it’s a pleasure to see Singh, Eby and other progressives wash their hands of Trudeau’s carbon tax, even if it’s mostly for political purposes and personal gain, it’s not like most Canadian conservatives haven’t warned them about the blindingly obvious problems with it.

The carbon tax is a regressive policy that adversely affects overall market outcomes through social costs rather than private costs. It’s unnecessarily increased the role of the state in our daily lives. It’s crippled our domestic economy. It’s given Trudeau billions of additional taxpayer dollars to waste. It’s also played a significant role in increasing the affordability crisis that has adversely affected many hard-working Canadians and their families.

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Trudeau’s position that a carbon tax would be revenue-neutral was a non-starter, too. Many left-leaning economists and policy analysts have touted this position for decades, but it’s complete nonsense. A tax that’s collected by any level of government is absorbed into the system and cannot be specifically returned in a different guise. The Fraser Institute proved this in a 2017 analysis of B.C.’s supposedly revenue-neutral carbon tax. It clearly used smoke and mirrors to claim revenue neutrality, when in fact it “was no longer solely relying on new tax measures to offset the carbon tax revenue and instead began using pre-existing tax reductions in its revenue neutral calculation.”

The B.C. premier at the time? Christy Clark, who wasn’t a New Democrat — and should have known better.

Hence, the carbon tax is nothing more than a regressive Pigouvian tax. Named after the late British neoclassical economist Arthur C. Pigou, the United States-based Tax Foundation defined it as “a tax on a market transaction that creates a negative externality, or an additional cost, borne by individuals not directly involved in the transaction.” This includes the price of carbon, which affects overall market outcomes through social costs rather than private ones.

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The Liberal government, as Singh correctly noted, has used the federal carbon tax as a means of political and economic interference. In doing so, it’s caused a negative impact on everything from high food prices to the escalating price of gas. Many Canadians have been hurt in the process, but Trudeau and his merry band of Liberal sycophants are blind to this obvious reality.

If federal and provincial New Democrats were clever, they would stop considering ways to rinse, revise and rejuvenate crippling carbon taxes. They should focus on policies they believe could help improve the lives of individuals and families that don’t involve additional taxation. Alas, this type of strategy is far too taxing for Canada’s socialists.

National Post

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