We’re still being deceived about the carbon tax
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Summary
The election is now underway, and the question is, will the carbon tax still be part of the discussion? Is it still a key issue in the election? On this episode of the Full Comment Podcast, we speak with Franco Terrazzano, the National Director of the Canadian Taxpayers Federation, and author of a new book, "Axing the Tax."
Transcript
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It seemed for a long time that we were headed towards a carbon tax election, and then, well,
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Justin Trudeau resigned, Donald Trump reappeared, and the Liberals decided to get rid of, at least
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part, of the carbon tax. Hello and welcome to the Full Comment Podcast. My name's Brian Lilly,
00:01:56.120
your host. The election is now underway. We're headed to the polls, and the question is,
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will the carbon tax still be part of the discussion? Despite all the claims that the
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Conservatives need to drop discussing the carbon tax, it's still very much an issue. Last week,
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Conservative leader Pierre Polyev standing in a steel mill in eastern Ontario saying he would scrap
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the entire carbon tax. Unlike Mark Carney, who just got rid of the consumer carbon tax,
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he would get rid of it for industrial places like steel mills. Today I am announcing that a common
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sense, Canada-first conservative government will repeal the entire carbon tax, including the federal
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backstop that requires provinces impose industrial taxes. There will be no taxes on consumers,
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no taxes on Canadian industries. Polyev wasn't the only leader talking about the carbon tax,
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though. Mark Carney, while visiting London in the United Kingdom, was defending his move to not only keep
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the industrial carbon tax, but to increase it on April 1st and beyond.
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On the other hand, we have the opportunity to diversify trade. Guess what one of the requirements
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is to diversify trade to the European Union? Guess what one of the requirements is to diversify trade
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to the United Kingdom? Guess what one of the requirements will be to diversify trade to emerging
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So the carbon tax haunts us still. It will be an issue. We'll see how much of an issue in this
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election campaign. But to discuss all that, Franco Terrazzano, he is the national director of
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the Canadian Taxpayers Federation, and he is also the author of a book that's soon to come out called
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So let me ask you, are we having a carbon tax election?
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Well, I think the carbon tax is still going to be a key issue during this election debate. And
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that's for two reasons, right? You look at the polls, and a lot of people are still very worried
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about the cost of living. And of course, the carbon tax makes the necessities of life more expensive.
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And even though Mr. Carney has taken the consumer carbon tax rate to zero, I mean, you know as well as
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I do, he still wants to run on this hidden carbon tax on business, which will, of course, increase
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prices for Canadian consumers. So, number one, the cost of living issue is still very important for
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ordinary Canadians, and the carbon tax is central to that debate. But number two, as you have pointed
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out, right, the big key issue is how to Trump-proof the Canadian economy. Well, of course, Trump,
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Washington does not impose carbon taxes on Americans. And what Carney is proposing to do
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would hammer Canadian businesses with carbon taxes. Well, that is a recipe to push Canadian
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businesses to cut down production here and set up shop south of the border. So as we look for ways
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to get Canada's economy firing on all cylinders again, I think the carbon tax, and specifically
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Carney's hidden industrial carbon tax on Canadian businesses, will be a central
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It's interesting. The United States under Donald Trump is taking a look at a lot of our taxes
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and questioning whether they are de facto tariffs on American imports or a problem for American
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businesses. They're looking at the digital services tax. They're even looking at the GST and calling it
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a national 5% tariff on all imports. That's a bit weird because it applies to everything in the
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country. But they are considering whether to act on that. I wouldn't be surprised if they did take issue
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with Canada's carbon tax. But Carney has also suggested a carbon border adjustment. Now, there
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is an incredibly bland bureaucratic phrase designed to put people to sleep and not tell you what it
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really is. Do you think that he'll go ahead with that policy if he if he gets in? And maybe you can
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explain to the listeners what a carbon border adjustment is?
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Well, I do think he'll go ahead with it, right? Like that was one of the key tenets of his leadership
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campaign when he was talking about the environment is this carbon tax tariff. So essentially, it's just a carbon
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tax that's applied on the border when we're purchasing goods from other countries, right? And like even as
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Trudeau said before he was leaving office, and he said correctly about tariffs, right? A tariff is a tax
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on your own citizens. So when a US President Donald Trump imposes tariffs on Canadian goods, what he's
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really doing is imposing taxes on American businesses, and those costs are passed on to American consumers.
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Well, the same is true when the Canadian government imposes tariffs or retaliatory tariffs or carbon tax
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tariffs, like what Carney is doing, right? That is just another carbon tax on Canadian
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businesses passed on to Canadian consumers that makes life more expensive. Now, Brian, let me also
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just segue into into some of Carney's claims that he says why we need these carbon taxes here in
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Canada, right? He's talking about, oh, well, you know, there's some other countries that will impose
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carbon tax tariffs on us if we don't impose carbon tax, carbon taxes on Canadians. But like that logic,
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that rationale doesn't pass just a second of critical thinking, right? So essentially what
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he's saying is that the Canadian government should hammer all Canadians with carbon taxes in the chance
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that some countries impose some carbon taxes on some businesses when we sell abroad. Like none of that
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makes any sense. And really that argument has gone there because they've lost the carbon tax argument on
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affordability. They've lost the carbon tax argument on the environment. So now they're just scrambling,
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looking for a new reason to try to sell Canadians on carbon taxes.
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Well, I've been pointing out that Mr. Carney is unfamiliar with the truth. In multiple ways, he has
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lied. And I think this is one of them because I went through after he said that in London the other day,
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he said, if we want to sell to the European Union, for example, we need to have a price on pollution,
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as he calls it. We'll get into the semantics of this discussion in a moment. But he said we had to
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have a price on pollution, price on carbon. It's a carbon tax when it's bad and he's cutting it,
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and it's a price on pollution when he's good and supporting it. But if we didn't have it,
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we couldn't sell to the EU. So I looked at who the biggest sellers of oil and gas are
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into the European Union. And well, only two of them have carbon taxes, Norway and the United
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Kingdom. The US doesn't have a carbon tax, neither does Russia, neither does Kazakhstan, Algeria,
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Nigeria, Libya, none of them do. And they sell just fine into the European Union.
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Well, and just to expand on that too, right? While I was writing this book, I went through
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the World Bank's carbon pricing dashboard, which is essentially just wonky to say they keep track
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of all the different carbon taxes around the world. And, you know, interestingly, it's about 70%
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of countries around the world that do not impose national carbon taxes. So you mentioned some of
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them, but also some of the largest emitters in the world, really four of the top five largest
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emitters are not imposing national carbon taxes, right? So Russia, no national carbon tax. And the
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same is the case with India, Brazil, and of course, the United States. And, you know, as we talk about
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these looming tariff threats, tariff war, the stuff that's already in place, we also have to remember
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that yes, it's important to diversify our trade with other countries. Yes, it's important to open up
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trade within Canada, but it's still also important to trade with the United States, especially moving
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forward and also to compete with the United States moving forward, right? And here's the key point of
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this whole discussion is that the United States, regardless of who is occupying the White House,
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has is not imposing carbon taxes on Americans, right? You had Obama, no carbon tax, you had Biden,
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no carbon tax, when Hillary Clinton or Harris ran for office of the White House, no carbon tax. Trump,
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of course, never imposed a carbon tax on Americans. And I think it's fair to say he never will. So on
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the one hand, we're hurting ourselves. And on the other hand, we're actually helping the United States
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to attract businesses from Canada with all these carbon taxes. I remember when Stephen Harper had
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promised to put in a carbon tax or a variation thereof, it was to match the Americans, because he
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very astutely, a smart guy, believed that if we're going to be competitive with the United States,
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our regulations should match as often as possible. And that was the only time he promised the carbon tax.
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Pierre Paliyev made his announcement on axing the carbon tax at Ivaco, which is a steel producing
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place just outside of Ottawa. He and Mark Carney both visited steel plants recently. Carney went to
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DeFasco in Hamilton, and as I said, Paliyev at Ivaco. Ivaco's had layoffs already, 150 layoff notices
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given. Algoma Steel in Sault Ste. Marie, Ontario, layoff notices given. I'm not sure about Estevez in
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Regina or Atlas in Edmonton, but you talk about the tariffs plus the carbon tax, which will go up on
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industrial emitters April 1st, correct? Yeah, no, look, my understanding... But am I correct on that?
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It still goes up? Yes, that is my understanding. So if you add Trump's tariffs and Carney's increased
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carbon tax, all you're doing is asking for companies like Arcelor Mattel, which owns DeFasco
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in Hamilton, to move production to one of their many other plants. They could just go down the 401,
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go across the Ambassador Bridge, and start moving production to Detroit or down into Ohio or elsewhere.
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We're going to be chasing away our own industry, and I just don't get it that people want to rally
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around this idea and be fine with our government effectively imposing a tariff on our goods while
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objecting to the Americans doing it. They have the same bad outcome. Oh, they totally do, right? And
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the same outcome is higher prices, less production in Canada, and of course, fewer Canadian jobs.
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And this is really why the industrial carbon tax is the worst of all worlds, okay? So what Carney is
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proposing, he wants to hide this carbon tax, and he hopes Canadians won't notice when the price of
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everything goes up. But the problem for Carney is that he's trying to frame this as, look, it's only
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going to be the large emitters that pay for this. But nobody believes Carney. You know, Brian, we released
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a Leger poll not too long ago that showed that 70% of Canadians understand that if you hit businesses
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with carbon taxes, that's going to mean higher prices. Only 12% of Canadians believe Carney that
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businesses are going to pay most of the costs of his industrial carbon tax. And it's not just higher
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prices, as you point out, because at the end of the day, businesses only have really three options,
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right? They're not going to just eat the cost of these higher taxes, higher regulations. The three
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options are to pass along the cost to consumers through higher prices, or reduce their production
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here in Canada, which of course means less jobs, less economic growth, less ability to withstand
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Trump's tariffs. Or there's the third option, which is the worst option, because it's a combination of
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both, which is both higher prices for Canadians, and then also less production here in Canada.
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Yeah. Which means fewer jobs for everyday people.
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Yeah, that's exactly right. That's exactly right.
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So how much, look, I know the election campaign has just started, but how much do you think this
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will play in? Will people be able to tie the carbon tax? A lot of them will think it's just gone,
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even though as we've been discussing, it's not. Many people will think it's gone and not tie together
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the idea that we're hurting ourselves while we're trying to protect ourselves against
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Yeah, that's a really good question. The honest answer is, I don't know, right? We still see polls
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that show a top concern for Canadians is the cost of living. Now, how much of that is you go to the
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gas station, prices are still high, or they have been over the number of years. Home heating bills have
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been very painful for Canadians over the last number of winners. And of course, grocery costs
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are still very high. So how much of that concern will be towards the government's own policies that
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have made life more expensive versus how much of that will be towards anger at Trump and his tariffs?
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It's hard to say. And a lot of it depends on the election campaign of the different parties.
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But I think what should be a focus of the election is not just how to deal with Trump,
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you know, the diplomatic nature versus retaliatory tariffs. But I think one of the key focuses of
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the election is how to actually tariff-proof Canada's economy, right? Because we've been
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talking about carbon taxes this whole time. But what we also have to remember is that the carbon tax
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was layered on top of another carbon tax and fuel regulations, which was layered on top of
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an oil and gas cap, which was layered on top of EV mandates and all these other different
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regulations that have strangled Canada's economy, which led to, what, $670 billion in natural resource
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projects being stalled or suspended since 2015. So not only are we facing these energy taxes,
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these energy regulations, but we're also falling behind on major tax competitiveness.
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Every year, there's this report that ranks all of the OECD countries, right, our industrialized peers.
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And in the latest report, you know, Canada ranked 31st out of 38 on income tax competitiveness. So 30
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countries more competitive than Canada. Canada ranked 26th on business.
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26th on business taxes. Okay. And on both measures, we ranked behind the United States.
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So what I would love to see and what I think I would love to see all parties focus on this,
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who knows if they will, but it's not just about carbon taxes. It's not just about energy regulations
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and getting stuff built, but it's also about fundamentally making Canada's tax system more
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competitive because we're lagging behind many of our industrialized peers, including the United States.
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There's this myth out there that, well, we're Canada. We've always had high taxes and we believe
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in high taxes and helps build the social safety net. On the business tax side, going back to at least
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Laurier, maybe even before, part of the industrial policy of Canada was lower taxes on business than
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the United States so that we can attract investment. If we don't have that, we won't be able to attract
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investment. Over the last decade, the liberals have kind of, you know, lost sight of that idea.
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They've added on extra taxes like, oh, there's a bank tax that's just extra because you're a bank.
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We'll tax you, I forget, is it a quarter or three quarter point more or something like that?
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You've got taxes for surcharges for high income earners. They have really decided to try and punish
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success. And, you know, I think everybody believes if you're better off, you should be paying more and
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paying your fair share. I just think that the Trudeau liberals, and I don't see it changing under Mark
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Carney, believe that your fair share is as much as they can take from you before you get up and leave.
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Well, that's exactly right, right? I mean, under the Trudeau government, especially near the end of it,
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right, they were just trying to squeeze as much money from Canadians and Canadian entrepreneurs
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as they can get away with, right? And I think nothing exemplifies that point more than the capital
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gains tax increase that they brought in the last budget, right? Now, of course, they didn't go through
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with it this year. But what they were trying to do is essentially squeeze as much money from
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entrepreneurs as they could get away with. And of course, they were trying to frame this as, you
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know, oh, we're only going after the monopoly man. But that's not correct. I mean, there's been tons
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of analysis done. The C.D. How Institute with Jack Mintz crunched the numbers. And it was showing that
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this capital gains tax hike was really a financial sucker punch to so many ordinary Canadians who worked
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their entire lives to invest in properties, to save for their retirement, or to create a business.
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So we've seen this all along. And to kind of go back to your point about business taxes and
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attracting investment, like that is all very good. But we also have to remember too, like what pays for
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all the different social services in Canada? Well, to a long, to a large extent, it is these major
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natural resource projects that come into Canada, or that are created in Canada, that allow for good
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jobs to be created that allow for economic growth, but that also provide the tax revenue to pay for
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things like hospitals, reducing class sizes, and stuff like that.
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How did, how were the liberals successful in convincing the public and much of the media,
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I would argue, in adopting their language and their ideology, the language such as the price on
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pollution, the price on carbon, claiming that it's not a tax, or that eight out of 10 will get back
00:20:18.760
more than they pay in. That eight out of 10 number was shown to be false multiple times. And yet they
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repeated it. Now, a lot of my colleagues in the media did the same, same with the price on pollution.
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How were they successful in that? Is it just a mindset that is far too prevalent in Canada that
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this is the right thing to do, and we should punish ourselves, even when nobody else is punishing them?
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Well, Brian, I'm going to actually say something that I think might surprise you. And this was one of the
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surprising things that I did with researching for this book, right? Axing the tax. But look, I will say
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that, first, I don't want to paint everyone with the same brush, right? Not everyone in the media is the
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same. But a lot of people who were going along to get along with the liberal government's language, many
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people in the media, many elites within the academics of Canada, they were going along with it because
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they wanted to shove carbon taxes down people's throats, right? Like they supported the carbon tax. That's
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why they went along with it. Now, I don't think ordinary Canadians ever fully bought into the carbon tax.
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And here's the reason I say it. And let me just take a step back and go to the provinces, for example. So when
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British Columbia first brought in the first economy-wide carbon tax in 2008, the liberal government out
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there never ran on it, right? They never ran on the carbon tax in the election before that.
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The same thing happened in Alberta when the NDP government brought in its provincial carbon tax.
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They never ran on a carbon tax. And in fact, the first time Albertans had the opportunity to vote
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on the carbon tax, they turfed the NDP and they brought in the Kenney government that repealed the
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carbon tax as Bill 1. And Brian, as you'll remember, right, covering Ontario politics at the time,
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it was the exact same story with the win cap and trade carbon tax, where in the election previous,
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she never ran on a carbon tax. Now, let's go back to Ottawa and the liberal government. Let's go back
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to 2015 because today it's easy to think of the carbon tax rightfully as Trudeau's signature tax
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policy, right? It's easy to think of that. But if you go back to 2015, what do you remember about
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that election? Well, other than the promise of legalizing weed, if you think about taxes from
00:22:38.160
the 2015 election, Trudeau really ran on lowering taxes for middle class workers and people working
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hard to join the middle class. In fact, you had to squint real hard back in 2015 to find any comments
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about a carbon tax. The Trudeau liberals buried a vague notion of carbon pricing 39 pages down
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into their platform. And I actually think one of the fundamental flaws that brought the death to
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Trudeau's consumer carbon tax is that Trudeau never really had buy-in from the Canadian people
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about the carbon tax because he was never fully honest with Canadians about just how much the
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carbon tax would cost. And because he was never fully honest with Canadians, never fully got buy-in,
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the liberals under Trudeau were also not very honest with themselves on the actual public
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discontent towards the carbon tax. We need to take a quick break. And when we come back, Franco,
00:23:39.880
I want to ask you about more about the history of carbon taxes and how they came about.
00:23:45.740
Details that may surprise some listeners. Back in moments.
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Is the technology such that it's going to go up? Is it going to come down? Do you think it's going
00:24:52.340
to be just sort of an extrapolation of where it is right now? Well, I think there's a lot of smart
00:24:56.960
people wrestling with that right now. Today, I'm speaking with Michelle Herodance. She's the
00:25:01.340
Executive Vice President of Enbridge Inc. and President of Enbridge Gas. She's a leader helping us
00:25:07.600
reshape how millions of us experience energy at home. Join me, Chris Hadfield, on the On Energy
00:25:14.720
Podcast. Listen wherever you get your podcasts. So, Franco, in your book, Axing the Tax, you go back
00:25:21.960
into the history of carbon taxes in Canada, and not too deep. It's not a super long book. I think
00:25:27.260
people will enjoy it. 120-odd pages, I believe. But Joe Clark, father of the carbon tax, what?
00:25:34.900
Well, yeah, like most people think of either Trudeau or Dion as being one of the first federal
00:25:41.660
leaders to propose or bring in a tax. But an interesting little piece of political trivia
00:25:47.000
here in Canada is that it was the progressive conservative government of Clark that introduced
00:25:53.280
the notion of a form of carbon tax all the way back in the 1979 budget, right? Now, they
00:25:59.360
didn't call it a carbon tax. It was more like a fuel oil reduction tax to increase the price
00:26:05.720
of gasoline. But all of the claims that they brought in their budget was essentially the
00:26:11.580
claims that led to the carbon taxes of today, right? Bring in a tax to increase revenues,
00:26:16.920
to conserve the environment, and to encourage people to use less oil products. Now, fortunately
00:26:24.360
for us Canadians at the time, is that the government actually never was able to bring in that tax
00:26:30.680
because they lost that confidence of the House of Commons shortly after that budget.
00:26:36.860
They couldn't count votes, never mind where the public was at. That's how they messed that up and
00:26:43.040
ended up losing power. They miscalculated how many people were in Ottawa for the vote.
00:26:48.180
You talk about the fact that, you know, we went through all of this and you go further back in
00:26:55.920
the history, but then you get to 2021. And in the 2021 election, every party was running on some form
00:27:07.560
of carbon pricing market mechanisms. They would talk about it as if this is a market way to adjust
00:27:14.620
the market. No, it's garbage. But how were we able to go from that to Pierre Polyev effectively going
1.00
00:27:24.120
across the country saying, ax the tax, people laughing at him, that'll never work, then seeing
00:27:29.660
his rallies get huge and Canadian public opinion shifting?
00:27:34.640
Well, I think a lot of people, especially in Aaron O'Toole's camp, right, because he was the
00:27:39.220
Conservative Party leader at the time who broke his promise to both Conservative members, also to
00:27:45.520
Canadians and even to the Canadian Taxpayers Federation. You'll remember when Aaron O'Toole was
00:27:49.960
running for the leadership of the Conservative Party, he signed this huge Canadian Taxpayers
00:27:54.600
Federation pledge and he was unequivocal, right? He put his own signature beside a pledge to promise
00:28:01.460
to repeal the Trudeau carbon tax, but then also oppose every other type of carbon tax regardless of its
00:28:08.040
name. And then just months before the upcoming 2021 election, he broke his promise and he ran on
00:28:14.180
a carbon tax. And Brian, you know, it's crazy to say, but O'Toole's carbon tax may have been worse
00:28:19.460
than Trudeau's carbon tax, right? Like, like Trudeau's carbon tax is a thinly veiled redistribution
00:28:26.280
scheme. But, you know, at least some Canadians were getting some of their money back in actual cash,
00:28:31.660
whereas Aaron O'Toole still wanted to make your life more expensive with his carbon tax. But then like
00:28:37.160
the money would go into this like O'Toole savings account where you would get some credit to buy
00:28:42.800
some government green goodies, like an e-powered solar blender. I remember mocking them as Aaron
00:28:47.740
Bucks. Aaron Bucks. Yeah, exactly, Brian. I remember that. It was, you know, sadly hilarious.
00:28:53.960
So O'Toole broke his promise. And not only did he break his promise, but I think he made a
00:28:58.960
fundamental miscalculation, right? Because during the 2021 election, you'll see these polls that were
00:29:05.460
happening. And the number one issue for people who vote for every party was the cost of living,
00:29:12.720
right? Put yourself back in August and September of 2021. Well, that is when the inflation crisis was
00:29:19.980
starting to take off. That's when the inflation was well above 2% on its way to a 40-year high in 2022.
00:29:27.920
Had started creeping up in the spring and then really took off towards the end of summer.
00:29:33.240
That's absolutely correct. So the key issue facing voters, at least economically during the 2021
00:29:39.880
election, was affordability. But O'Toole handcuffed his party, handcuffed his MPs, because they weren't
00:29:47.940
able to wedge Trudeau on the key issue of affordability. After all, it would have been hard
00:29:53.380
for O'Toole or one of the conservative MPs running in the election to hold a press conference outside the
00:29:59.340
huge gas prices when their own leader was running on a carbon tax. Now, Brian, fast forward to just
00:30:06.900
after the 2021 election. And I remember all, you know, the big time pundits, all the big brains in
00:30:13.460
Ottawa who were claiming that the fight against the carbon tax is over and that the carbon tax was here
00:30:20.800
to stay. Well, I remember people saying to me, you can't win in Canada running against the carbon tax.
00:30:28.400
And I said, well, Doug Ford did and he won. Yep. Jason Kenney did and he won. Right. And what they
00:30:37.080
were missing was what was bubbling underneath the surface. And it's what conservative MPs, when they
00:30:42.940
were knocking for when they were knocking the doors during the election, they were getting earfuls for
00:30:47.400
their constituents because O'Toole betrayed Canadians trust, flip-flopped and broke his promise on the
00:30:53.860
carbon tax. So, you know, to many of these pundits, the elite class in Ottawa, they might be surprised that
00:31:01.360
the carbon tax again became a huge political issue. But anyone who is actually talking to normal Canadians
00:31:09.060
who are having struggles to afford fueling up their minivans or heating their homes or putting food on the
00:31:15.720
table would understand that the carbon tax as it is now was still a huge issue back in the 2021
00:31:22.100
election, even though O'Toole failed to capitalize on it. You, uh, you point out, um, you point to a
00:31:29.760
story in 2022 from CBC and, uh, specifically a poll that they commissioned through public square research
00:31:38.440
and Maru blue. And people were asked how much they would be willing to pay in carbon tax. And
00:31:46.500
more than half of the country said, well, about 35%, I believe said nothing. They don't want to pay a
00:31:53.980
thing. And, and then, um, a smaller group just shy of 20% said they would be willing to pay up to $100 a
00:32:03.280
year. And that's it. Now, of course, the carbon tax costs well more than that. Um, and I think that
00:32:10.420
that's something that, you know, all these polls prior to that, that asked, do you support a price
00:32:17.440
on pollution or a carbon tax or whoever they phrased it failed to realize, yes, people want the
00:32:23.040
government to do something about, uh, the environment. They just don't want to pay for it.
00:32:27.520
Well, Brian, actually, you know, that was a poll from 2019, right? So, yes, it was 2019 and it was
00:32:35.960
commissioned just after the carbon tax took effect in 2019. And remember in 2019, inflation was still
00:32:42.560
relatively low, right? It was before the pandemic and people even then couldn't afford a massive
00:32:50.640
carbon tax increase. And what the poll showed was that even when the carbon tax was four cents a liter,
00:32:56.040
like that poll, it was striking to me because it showed that Canadians of course care about the
00:33:01.380
environment, but that Canadians couldn't even afford a tax of a monthly Netflix subscription.
00:33:08.340
Okay. And here's the point. And it goes back to my earlier statement where Trudeau and the liberals,
00:33:14.340
they got caught up in, um, the emotion that people care about helping the environment, but they were
00:33:20.020
never honest with Canadians about what the carbon tax meant, that it was a carbon tax that would cost
00:33:25.220
hundreds of dollars every single year that would increase the necessities of life. And it would
00:33:31.200
keep going up every single year. And then this poll shows that, you know, Canadians care about the
00:33:37.200
environment. You're not going to get backlash because people want Canadian or people want a
00:33:41.600
healthy environment for themselves or kids and their grandkids, but people did not support a tax that
00:33:47.280
made the necessities of life more expensive. So right there, it goes back to the point that the
00:33:52.280
Trudeau liberals were never fully honest with Canadians about the cost of the carbon tax.
00:33:56.440
They never fully got buy-in from Canadians about the cost of the carbon tax. And therefore they
00:34:01.980
were never fully honest with themselves about the public's appetite or displeasure with the carbon tax.
00:34:08.660
And Brian, just to carry this forward a little bit more, but you'll also remember in 2019,
00:34:13.980
the Trudeau liberals misled Canadians again, right? It was just before the 2019 election,
00:34:19.500
that former Environment Minister Catherine McKenna told Canadians that the government had no intention
00:34:26.800
of continuing to raise the carbon tax beyond 2022 and 11 cents a liter of gas. And then what happened
00:34:35.260
immediately or soon after the 2019 election? Trudeau announced that he would crank the carbon tax up
00:34:41.320
every single year until it reached 37 cents a liter of gas in 2030. And they never said,
00:34:48.060
or they never confirmed that they would stop increasing the carbon tax even beyond that.
00:34:54.180
So would you say that the reason Pierre Polyev was able to turn the tide is that, as you point out,
00:35:02.040
there was no buy-in from the public, and he was able to read the room on affordability when
00:35:06.780
Trudeau was still saying, you'll forgive me if I don't think about monetary policy?
00:35:11.180
Well, you know, when he said that, I believe him. You know what I mean? When Trudeau said that,
00:35:18.200
Now, we know Mark Carney thinks about monetary policy, but he also does think about carbon taxes.
00:35:22.800
But is that why Polyev was able to do it, though, was that he was reading the room?
00:35:27.480
Yeah, I think there's a couple reasons why Polyev was able to really hammer the messaging home.
00:35:33.800
Number one, to your point, I think he did read the room, and I think he did a very good job of
00:35:38.380
actually listening to Canadians. Now, when you're in this Ottawa bubble, Brian, as you know, right,
00:35:44.440
like, you kind of get sucked in with the stream of where everyone else is going, right? And you had
00:35:51.180
all the elites at the time saying the carbon tax was here to stay, there is no opposition to the
00:35:55.820
carbon tax, yada, yada, yada. But I think Mr. Polyev did a good job of actually listening to
00:36:01.000
Canadians' concerns, understanding that, like, it's actually not a political winner to make the
00:36:06.420
necessities of life in Canada more expensive. And then, to Mr. Polyev's credit, like, he went
00:36:12.680
on an absolute campaign against the carbon tax. He did a great job showing Canadians the scam that
00:36:19.980
is behind the carbon tax, the fatal flaw of the carbon tax, which is this. The carbon tax makes
00:36:25.720
life more expensive, and it doesn't work. In fact, higher prices are a feature of the carbon tax,
00:36:33.120
not a bug. So I think Polyev did a very good job. And at least at the federal level,
00:36:39.380
I have never seen another politician go to bat for Canadian taxpayers against the carbon tax like he
00:36:47.040
did. The Carney position, it will be, you know, he's talked about shadow carbon taxes, he's talked
00:36:56.980
about making big industrial polluters pay. There is no way that this does not continue to
00:37:02.540
hurt the economy if the liberals win, and Mark Carney implements the kind of policies that he has been
00:37:10.280
an advocate and an evangelist for, for the past decade. I mean, he's written a huge book praising
00:37:16.740
carbon taxes, right? I'm in the middle of reading values, yes. There you go, there you go. Now,
00:37:23.400
I think a better book about the carbon tax is axing the tax, but I'm a little bit biased.
00:37:27.340
Um, no, you're, you're, you're absolutely right. And it's not only that, right? Like Carney's
00:37:33.060
trying to run on credibility, right? He's the numbers guy. He's the guy with the plan. That is
00:37:38.160
what his campaign is trying to frame this around. But Carney has absolutely no credibility on one of
00:37:43.800
the key questions of affordability until he's able to answer a simple question. How much is your carbon
00:37:49.660
tax going to cost? Everyone knows that it's, it's not going to cost $0. Everyone knows it's going to
00:37:55.820
have a big cost to Canadians in our pocketbooks, but then also to our economy. Like there's no way
00:38:01.400
of getting around this fact, right? And like, especially with the fact that the United States
00:38:06.640
does not have a national carbon tax, uh, the vast majority of countries around the world do not
00:38:11.500
have a national carbon tax. So like by imposing and continuing to increase the industrial carbon tax
00:38:18.100
on Canadian businesses, like that is going to make life both more expensive and also harder to find a
00:38:23.860
job here in Canada. One of the moves that the Trudeau liberals made at the, uh, height of anger over the
00:38:30.300
carbon tax was to, um, apply it unequally. And they would tell you that it was, no, this is a national
00:38:38.120
thing. We're getting rid of the, uh, the carbon tax on home heating oil for every Canadian. But we all
00:38:44.480
know that the majority of people using oil to eat their homes are in, uh, Atlantic Canada, where they
00:38:50.140
were starting to lose support. That really angered people in other parts of the country, in particular
00:38:56.280
in Western Canada. Now the liberals got support back after they did that. People were like, okay,
00:39:03.960
I'm fine with it in Atlantic Canada. It just made people angrier and want to vote conservative twice
00:39:10.020
in, um, in Saskatchewan and Alberta. But so politically it really did work for the liberals,
00:39:17.880
but how much do you think that undermined their ability to claim that this was a vital tax necessary
00:39:25.380
for the health of the planet? It completely undermined it, Brian, right? With that one move,
00:39:30.880
Trudeau took the mask off. But, you know, let me take a step back here because the Atlantic Canada
00:39:36.700
carve out, I've heard a lot of people, especially people support carbon taxes that are trying to blame
00:39:41.460
the demise of the carbon tax on the Atlantic Canada conundrum. But it actually starts, uh, much earlier
00:39:47.560
than that, right? So when Trudeau first brought in the carbon tax across the nation in 2019,
00:39:52.680
it was really a mandatory minimum carbon tax, right? So, uh, provincial governments, uh, could impose
00:39:59.180
their own carbon taxes if they meet the federal standard or the federal government would impose
00:40:04.020
its own tax. But the way that Trudeau tried to sell it is that it would be a level playing field
00:40:09.240
all across Canada, right? Carbon tax rates would be the same in every province,
00:40:13.560
whether it was a provincial tax or the federal tax itself. But that's not how it worked out in
00:40:18.740
practice. Well, how it worked out in practice, especially in the early days was this, the West
00:40:24.040
pays more, the East pays less, right? So like for, for quite some time, you could even find on the
00:40:30.640
Nova Scotia government's own website, bragging about the fact that Nova Scotia's carbon tax,
00:40:36.720
cap and trade carbon tax was significantly less than in the rest of Canada. Their carbon tax for a long
00:40:42.860
time was around one cent or two cents per liter of gasoline. Now this also created a big time
00:40:50.000
pushback, especially from premiers in Western Canada. So then Trudeau had to go back to the
00:40:55.200
drawing board, right? He had to try to make it more fair, even out the patchworks. So Trudeau had
00:41:01.440
three options. Number one, scrap the carbon tax. Number two, reduce the carbon tax rates in the,
00:41:07.760
in the rest of Canada. Number three, hammer Atlantic Canadians with massive carbon tax hikes.
0.84
00:41:14.900
Now Trudeau picked the dumbest possible option and he decided overnight, he decided overnight to
00:41:23.400
increase the carbon tax on Nova Scotians by like 12 cents a liter of gas, right? So overnight people
0.93
00:41:29.600
saw gas prices skyrocket, right? Grocery costs, heating bills, all of this stuff went up. And all
00:41:37.280
of that happened because of the initial political patchwork that Trudeau had put in place and allowed
00:41:43.660
to flourish for a number of years. Now this pushback from Atlantic Canadians trickled up to provincial
00:41:50.080
politicians in Atlantic Canada, all the way up to the Atlantic Canada caucus revolt and Ken McDonald
00:41:56.560
from Newfoundland and Labrador who stood up for his constituents and as a liberal MP voted to repeal
00:42:03.380
all carbon taxes. So then all of this happened and led to this Atlantic Canada carve out on furnace
00:42:09.500
oil. And what it did was a couple things. Number one, it proved that the carbon tax does make life
00:42:17.500
more expensive, right? Otherwise, why would Trudeau announce affordability by taking the carbon tax off
00:42:24.840
of a fuel source? So he showed very obviously that the carbon tax does make life more expensive and
00:42:32.420
that went against one of his big talking points. But number two, what it showed was that the carbon tax
00:42:39.120
was always, always about politics, not the planet, right? Because what he did was nakedly political.
00:42:47.660
Atlantic Canada is a typical liberal stronghold and he saw the polls nose diving for the liberals there.
00:42:53.440
And so he decided to take the carbon tax off a fuel source that is predominantly only used in Atlantic
00:43:00.040
Canada, right? 97% of Canadians don't use furnace oil. They use other forms of home heating. So number
00:43:07.140
one, this Atlantic Canada carve out proved that the carbon tax makes life more expensive. Number two,
00:43:13.420
it showed that the carbon tax was always about politics. But number three, it ignited regional
00:43:19.360
tensions where you had essentially premiers of all political stripes, NDP, liberals,
00:43:26.700
conservatives, all coming out against the carbon tax.
00:43:31.080
The carbon tax is with us still. Don't believe the hype. And that's why Axing the Tax by Franco
00:43:36.220
Terrazzano is worth the read. The book comes out April 10th.
00:43:40.360
April 10th. Yeah. And you can get your pre-order already on Amazon or check out Sutherland House
00:43:46.200
Publishing. All right. Thanks so much for the time, Franco.
00:43:49.520
Hey, it was my pleasure, Brian. Thank you so much.
00:43:51.420
Full Comment is a post-media podcast. I'm Brian Lilly, your host. This episode was produced by
00:43:56.080
Andre Pru. Theme music by Bryce Hall. Kevin Libin is the executive producer. You can subscribe to
00:44:01.680
Full Comment on Apple Podcasts, Spotify, wherever you get your podcasts. Listen through apps or enabled
00:44:07.980
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00:44:12.860
Thanks for listening. Until next time, I'm Brian Lilly.