Ontario Premier Doug Ford won the election in part by campaigning against economy-wide carbon pricing, calling it “job killing”, a “tax grab”, and likely to induce a recession. Economists have pushed back on that claim, and a new analysis by EnviroEconomics in partnership with Canadians for Clean Prosperity puts numbers to the competing positions of the provincial and federal governments.
The bottom line: Ford government’s “Preserving and Protecting our Environment for Future Generations: A Made-in-Ontario Environment Plan” will cost households $210 per year more than the federal backstop by 2022, and $179 more in 2030.
The biggest difference, according to EnviroEconomics researchers Dave Sawyer and Seton Stiebert? The federal plan rebates much of the carbon tax revenue back to consumers, leaving all but the wealthiest households better off.
Cost per tonne of emission reduction is also an important factor. Carbon pricing, which economists generally regard as the most efficient way of cutting emissions, is less costly than regulations, which are relied upon more heavily in the Made-in-Ontario Environment Plan. According to the analysis, each tonne of carbon removed under the Made-in-Ontario Environment Plan would cost an average of $62 in 2022 and $69 in 2030. Under the federal backstop, it costs an average of $40 in 2022 and $45 in 2030.
“In their climate plan, the Ontario government states they are looking for a balanced approach that builds a healthy economy and healthy environment,” said Michael Bernstein, executive director of Canadians for Clean Prosperity, in a release. “If the government were serious about this objective, they would adopt a carbon tax and rebate program.”
The likelihood of the current Ontario plan supplanting the federal backstop is, for now, speculative at best. A successful court challenge to the federal plan could grant the Ford government its wish, as could the defeat of the federal Liberals in the October 2019 federal election. Leader of the Opposition Andrew Scheer has promised to kill the carbon tax if elected.