Saying “there is no vaccine against a polluted planet. It’s up to us to act,” Prime Minister Justin Trudeau released a bold strategy to reach (or exceed) Canada’s 2030 emissions target.
The cornerstone of the plan, and arguably the central issue in the next election, is the proposed increase to the price on pollution. Until last week, Canada’s carbon levy of $30 per tonne was slated to go no higher than 2022’s increase to $50 a tonne. Now, the levy is set to increase in $15 increments every year thereafter for the next eight years, eventually hitting $170 per tonne by 2030.
Carbon pricing has long been viewed as sound economics but shaky politics. Economically, it makes sense: increase the cost of pollution, and people are incentivized to pollute less. Politically, it’s a harder sell. While the goal is not to raise revenues, but rather to change behaviours (and save the planet), the policy still bears the stigma of a traditional tax. That the government is forging ahead on this suggests it is confident that public opinion has crossed a threshold on climate action.
A counter-argument to the Conservative’s “tax grab” narrative is the Liberals intention to provide cheques directly to most Canadians, four times a year, to offset any increased costs borne by the policy. Still, opponents of pricing carbon have often attacked the rising prices of gas and heating fuel, with some success (you’ve probably already heard that the “carbon tax” will cost you “an extra $0.37.5/litre” at the gas pump by 2030). The increased price for carbon is either “the worst thing you could ever see” (Ontario Premier Doug Ford) or the way to “a sustainable and a prosperous future” (Federal Environment Minister Jonathan Wilkinson). Which narrative wins out will be an exercise in communications tactics, but this is not a zero sum game. Rural voters and the Conservative base in the prairies are unlikely to share the same policy space as urban Liberals in eastern and western provinces alike.
Of course, there is more to the strategy than just a price on carbon: the plan boasts 64 new measures and an “initial” $15 billion in investments. These measures and investments focus on large-scale clean power transmission projects, building Canada’s clean industrial advantage, and cutting energy waste. There are plans to plant two billion trees, blueprints to boost carbon sequestration, and ideas to incentivize home and building retrofits. Policy tools will be employed to encourage electric vehicles while discouraging gas vehicles. Big, innovative ideas will find a home in the $3 billion Strategic Innovation Fund’s Net-Zero Accelerator Fund or the topped up Sustainable Development Technology Canada. None of these will have the impact (or the headlines) that the scaled-up carbon levy is likely to produce.
Proponents of more aggressive climate policy have been impressed. Clean Prosperity called it a “bold, brave and wise move,” Nature United praised Canada for “accelerating action in order to exceed its 2030 Paris Agreement commitment,” and Clean Energy Canada deemed the policy “a comprehensive and honest plan to get Canada to beat its 2030 climate target.”
Meeting climate targets is one thing. Here, the government is also betting that good policy and good politics intersect: the Prime Minister will seek to occupy the important middle ground, outflanking the NDP on climate issues and focusing the political choice as one between the Liberals and the Conservatives. Short-term, that might just be an even more important target for the Prime Minister to hit.
For help navigating the world of government or to receive McMillan Vantage’s tri-weekly COVID-19 updates, please contact email@example.com.