The carbon gift is not a lump of coal. Albertans will receive the highest carbon tax rebate of any of the four provinces who have opted out of the federal plan. A family of four will receive an average tax credit of $888, compared to families in the other holdout provinces of Ontario, Manitoba and Saskatchewan who can claim a credit of $448, $486 and $809, respectively.
Let’s call it a gift, not a rebate because most Albertans will receive more back than they pay in the so-called carbon tax. According to calculations by economists Jennifer Winter and Trevor Tombe at the University of Calgary, 80 per cent of Alberta households will get more back from the credit than they will pay in increased costs (Globe and Mail, Dec. 19, 2019).
And can we really call it a carbon tax when it isn’t really isn’t? Taxes are collected by governments to pay for health care, roads, education and so on. The goal of the carbon transfer is to reduce fossil fuel consumption, not to collect taxes. Let’s call it a carbon transfer. Money is just collected and redistributed.
The names given to the carbon transfer and carbon gift are politically motivated. Conservatives prefer to call it a tax because it suits their political agenda of characterizing the fed’s actions to reduce fossil fuel consumption as a tax grab. The feds like calling the carbon gift “climate action incentive payments” because they like to pretend that we will meet carbon reduction targets.
And the federal Liberals are not rewarding Albertans for shutting them out of the province in the last election. The carbon gift is higher there because it covers a longer period of time than the other provinces and because Albertans spend more on fossil fuels.
You might wonder who’s paying for the carbon gift if it’s revenue neutral. Who is paying more than they receive? It turns out that businesses are.
For struggling businesses, the carbon transfer seems unfair. But the holdout provinces are responsible for that: if they had devised their own carbon transfer system, the one proposed by the feds wouldn’t be in place. All provinces are free to create their own systems. Presumably, they could devise a system where taxpayers end up giving a carbon gift to small businesses. By refusing to create their own plan, they are accepting the fed’s by default.
B.C.’s carbon transfer is a model for the rest of Canada to follow. Businesses are not hurt –in fact they receive a reduction in taxes, as do personal taxpayers. Introduced in 2008, it has reduced per-capita emissions by 12 per cent and contrary to what conservatives claim, it hasn’t hurt the economy.
B.C.’ carbon transfer is also a model for conservatives because it was introduced by the BC Liberals, a conservative government. If the BC Liberals could introduce a carbon transfer and get re-elected, any conservative government could.
Pricing carbon is an easy sell to voters because most Canadians agree on pricing pollution, led by BC (84%) and trailing in Alberta where it’s still a majority (69%). And if there is no net cost to taxpayers, what’s not to like?