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A Carbon Tax is Still a Tax

Frank Atkins

I find it difficult to understand the left-wing’s love affair with taxes. It is clearly tied up with their belief that there is no problem that cannot be fixed by increasing taxes somewhere. The issue with this view is that implementation of a new tax often does nothing to solve the problem that was purported to exist prior to the tax. The most recent example is the tax on foreign ownership of real estate in British Columbia. The pro-tax people went into an orgy of self-congratulations when it appeared this tax cooled the sales of real estate in Vancouver. However, it now appears that there is evidence sales were cooling prior to implementation of the tax. The net result is that a perceived problem was resolved, the British Columbia government can claim they solved it, and they have a financial windfall from the tax.

Now we are faced with the potential implementation of a tax on carbon, forced on the provinces by the federal government. This is a particularly odd one, as it is not clear whether this is supposed to curb the use of fossil fuels, or just create a price on something that has no market price at the moment. It appears to me the environmentalists think it is the former. Either way, once again governments will gain a financial windfall, and be able to use the funds for their pet projects involving some sort of income redistribution. It appears this is Stéphane Dion’s Green Shift reinvented.

The problem with a carbon tax is that, contrary to popular belief, it is just another tax, and somebody will ultimately have to pay this tax. In Saskatchewan, Brad Wall has long been an opponent of a carbon tax, and spoke out strongly against the forced implementation of this tax by the Trudeau government. Mr. Wall is clearly defending the interests of industry and consumers in his province. So, here we are in Alberta in the middle of a nasty economic downturn and the Notley government is siding with the implementation of a carbon tax in Alberta. It is hard to believe Ms. Notley cannot see the economic consequences of introducing a new tax in the middle of a downturn. Perhaps left-wing ideology is trumping economic reality once again.

There is some belief amongst the pundits that Ms. Notley is offering support for a carbon tax in exchange for federal government support of pipelines. It would be nice if Ms. Notley was truly in support of pipelines, and I would welcome this support. We all understand that getting our oil to markets in a pipeline will help with the current economic woes in Alberta, even with a stubbornly low world price for oil. However, if the cost of federal government support for pipelines is the introduction of a carbon tax, the price is too high.

The Notley government needs to stand up for Alberta in the same manner Mr. Wall is standing up for Saskatchewan. We need pipeline approval. But we also do not need a carbon tax. Ms. Notley needs to acknowledge this, and defend the interests of Alberta.

Frank Atkins is a Calgary economist and a senior fellow at the Frontier Centre for Public Policy.