We all know it can get pretty cold in Canada, but things have been heating up lately as our neighbors to the north are in the midst of a revolt over a proposed carbon tax set to take effect next year. Despite the fact that Canada tends to be more progressive on tax and environmental policy than the U.S., there is an uprising brewing against Prime Minister Trudeau’s planned tax on carbon emissions. Opponents are even heading to court to stop it, arguing it will kill jobs and chill their economy.
A carbon tax proposal is essentially a “sin” tax on energy, levying heavy fees on industry’s use of fossil fuels like coal, oil and gas, with the intention of motivating them to use renewable energy sources. Some in Washington have been seduced by the idea, and are thinking of bringing the carbon tax to the U.S. But if they paid attention to what’s happening across the border, they would bury this idea in the snow where it belongs.
As reported in the Wall Street Journal, Canadians are already pushing back against the national carbon tax. Thanks in large part to high taxes and environmental regulations, Canada has seen a drastic 56% decline in foreign direct investment from 2013 to 2017. A carbon tax would be more of the same, creating a massive new tax scheme that would apply across almost their entire economy, further depressing investment and economic output.
Ontario’s Attorney General and Environmental Minister attacked Trudeau’s plan as a “job killer” and called it a “cash grab” by Ottawa politicians that the people of their province would “overwhelming reject” if they had the option. Now Saskatchewan is joining Ontario’s court challenge to stop the tax. Meanwhile, anti-carbon tax politicians in Alberta are riding on an anti-carbon tax wave that many believe will carry them to victory in the next elections.
Though intended to help the environment, even environmentalists now argue that carbon taxes, such as those enacted in British Columbia in 2008, have failed as a market strategy, raising taxes while having none of the planned impact on emissions themselves.
Recognizing that his carbon tax will make matters worse, Trudeau is hedging his bets, proposing to cut his tax from 30 percent of emissions taxed to 20 percent, but that’s still not good enough for many. It’s also an admission that the tax is in reality a bad idea that must be weakened to make it more palatable.
With America’s economy booming, we should take heed of Canada’s folly and reject efforts here to enact similar legislation. Tax cuts and deregulation championed over the past 18 months in Washington have led to record low unemployment, sky high business investment and confidence, surging retail on higher consumer spending, and workers receiving a new wave of benefits not seen in decades.
Canada is learning the hard way that the carbon tax is a bad idea that kills jobs and economic investment, and is not an effective tool for market experiments. Importing this awful idea to the U.S. will only succeed in chilling our economy like winter evening up north. Congress should not spare a moment in rejecting it.
