Full Comment - We’re still being deceived about the carbon tax

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00:01:40.540 It seemed for a long time that we were headed towards a carbon tax election, and then, well,

00:01:46.040 Justin Trudeau resigned, Donald Trump reappeared, and the Liberals decided to get rid of, at least

00:01:51.960 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,

00:02:01.340 will the carbon tax still be part of the discussion? Despite all the claims that the

00:02:05.400 Conservatives need to drop discussing the carbon tax, it's still very much an issue. Last week,

00:02:11.180 Conservative leader Pierre Polyev standing in a steel mill in eastern Ontario saying he would scrap

00:02:16.600 the entire carbon tax. Unlike Mark Carney, who just got rid of the consumer carbon tax,

00:02:22.000 he would get rid of it for industrial places like steel mills. Today I am announcing that a common

00:02:27.560 sense, Canada-first conservative government will repeal the entire carbon tax, including the federal

00:02:34.060 backstop that requires provinces impose industrial taxes. There will be no taxes on consumers,

00:02:39.940 no taxes on Canadian industries. Polyev wasn't the only leader talking about the carbon tax,

00:02:45.220 though. Mark Carney, while visiting London in the United Kingdom, was defending his move to not only keep

00:02:51.220 the industrial carbon tax, but to increase it on April 1st and beyond.

00:02:55.380 On the other hand, we have the opportunity to diversify trade. Guess what one of the requirements

00:03:01.720 is to diversify trade to the European Union? Guess what one of the requirements is to diversify trade

00:03:06.740 to the United Kingdom? Guess what one of the requirements will be to diversify trade to emerging

00:03:11.600 Asia? Is to have a form of price on carbon.

00:03:16.120 So the carbon tax haunts us still. It will be an issue. We'll see how much of an issue in this

00:03:21.860 election campaign. But to discuss all that, Franco Terrazzano, he is the national director of

00:03:26.900 the Canadian Taxpayers Federation, and he is also the author of a book that's soon to come out called

00:03:32.180 Axing the Tax. Franco, thanks for the time.

00:03:35.420 Hey, Brian. Happy to be on with you.

00:03:37.160 So let me ask you, are we having a carbon tax election?

00:03:40.340 Well, I think the carbon tax is still going to be a key issue during this election debate. And

00:03:46.880 that's for two reasons, right? You look at the polls, and a lot of people are still very worried

00:03:51.440 about the cost of living. And of course, the carbon tax makes the necessities of life more expensive.

00:03:57.300 And even though Mr. Carney has taken the consumer carbon tax rate to zero, I mean, you know as well as

00:04:03.700 I do, he still wants to run on this hidden carbon tax on business, which will, of course, increase

00:04:09.640 prices for Canadian consumers. So, number one, the cost of living issue is still very important for

00:04:15.800 ordinary Canadians, and the carbon tax is central to that debate. But number two, as you have pointed

00:04:21.880 out, right, the big key issue is how to Trump-proof the Canadian economy. Well, of course, Trump,

00:04:28.520 Washington does not impose carbon taxes on Americans. And what Carney is proposing to do

00:04:34.780 would hammer Canadian businesses with carbon taxes. Well, that is a recipe to push Canadian 0.97

00:04:41.300 businesses to cut down production here and set up shop south of the border. So as we look for ways

00:04:47.800 to get Canada's economy firing on all cylinders again, I think the carbon tax, and specifically

00:04:53.340 Carney's hidden industrial carbon tax on Canadian businesses, will be a central

00:04:58.400 theme of the upcoming election.

00:05:01.120 It's interesting. The United States under Donald Trump is taking a look at a lot of our taxes

00:05:05.520 and questioning whether they are de facto tariffs on American imports or a problem for American

00:05:13.520 businesses. They're looking at the digital services tax. They're even looking at the GST and calling it

00:05:18.880 a national 5% tariff on all imports. That's a bit weird because it applies to everything in the

00:05:25.180 country. But they are considering whether to act on that. I wouldn't be surprised if they did take issue

00:05:32.300 with Canada's carbon tax. But Carney has also suggested a carbon border adjustment. Now, there

00:05:41.160 is an incredibly bland bureaucratic phrase designed to put people to sleep and not tell you what it

00:05:47.120 really is. Do you think that he'll go ahead with that policy if he if he gets in? And maybe you can

00:05:53.160 explain to the listeners what a carbon border adjustment is?

00:05:58.400 Well, I do think he'll go ahead with it, right? Like that was one of the key tenets of his leadership

00:06:02.860 campaign when he was talking about the environment is this carbon tax tariff. So essentially, it's just a carbon

00:06:09.300 tax that's applied on the border when we're purchasing goods from other countries, right? And like even as

00:06:15.600 Trudeau said before he was leaving office, and he said correctly about tariffs, right? A tariff is a tax

00:06:21.400 on your own citizens. So when a US President Donald Trump imposes tariffs on Canadian goods, what he's

00:06:27.660 really doing is imposing taxes on American businesses, and those costs are passed on to American consumers.

00:06:33.580 Well, the same is true when the Canadian government imposes tariffs or retaliatory tariffs or carbon tax

00:06:40.340 tariffs, like what Carney is doing, right? That is just another carbon tax on Canadian

00:06:45.600 businesses passed on to Canadian consumers that makes life more expensive. Now, Brian, let me also

00:06:51.400 just segue into into some of Carney's claims that he says why we need these carbon taxes here in

00:06:58.340 Canada, right? He's talking about, oh, well, you know, there's some other countries that will impose

00:07:03.180 carbon tax tariffs on us if we don't impose carbon tax, carbon taxes on Canadians. But like that logic,

00:07:11.080 that rationale doesn't pass just a second of critical thinking, right? So essentially what

00:07:16.920 he's saying is that the Canadian government should hammer all Canadians with carbon taxes in the chance

00:07:23.380 that some countries impose some carbon taxes on some businesses when we sell abroad. Like none of that

00:07:31.260 makes any sense. And really that argument has gone there because they've lost the carbon tax argument on

00:07:38.180 affordability. They've lost the carbon tax argument on the environment. So now they're just scrambling,

00:07:43.720 looking for a new reason to try to sell Canadians on carbon taxes.

00:07:48.560 Well, I've been pointing out that Mr. Carney is unfamiliar with the truth. In multiple ways, he has

00:07:56.260 lied. And I think this is one of them because I went through after he said that in London the other day,

00:08:04.560 he said, if we want to sell to the European Union, for example, we need to have a price on pollution,

00:08:11.680 as he calls it. We'll get into the semantics of this discussion in a moment. But he said we had to

00:08:17.620 have a price on pollution, price on carbon. It's a carbon tax when it's bad and he's cutting it,

00:08:22.900 and it's a price on pollution when he's good and supporting it. But if we didn't have it,

00:08:27.840 we couldn't sell to the EU. So I looked at who the biggest sellers of oil and gas are

00:08:33.320 into the European Union. And well, only two of them have carbon taxes, Norway and the United

00:08:41.560 Kingdom. The US doesn't have a carbon tax, neither does Russia, neither does Kazakhstan, Algeria,

00:08:48.320 Nigeria, Libya, none of them do. And they sell just fine into the European Union. 1.00

00:08:56.700 Well, and just to expand on that too, right? While I was writing this book, I went through

00:09:02.840 the World Bank's carbon pricing dashboard, which is essentially just wonky to say they keep track

00:09:08.760 of all the different carbon taxes around the world. And, you know, interestingly, it's about 70%

00:09:14.600 of countries around the world that do not impose national carbon taxes. So you mentioned some of

00:09:20.520 them, but also some of the largest emitters in the world, really four of the top five largest

00:09:25.560 emitters are not imposing national carbon taxes, right? So Russia, no national carbon tax. And the

00:09:31.660 same is the case with India, Brazil, and of course, the United States. And, you know, as we talk about

00:09:37.700 these looming tariff threats, tariff war, the stuff that's already in place, we also have to remember

00:09:43.300 that yes, it's important to diversify our trade with other countries. Yes, it's important to open up

00:09:49.860 trade within Canada, but it's still also important to trade with the United States, especially moving

00:09:55.580 forward and also to compete with the United States moving forward, right? And here's the key point of

00:10:00.940 this whole discussion is that the United States, regardless of who is occupying the White House,

00:10:06.680 has is not imposing carbon taxes on Americans, right? You had Obama, no carbon tax, you had Biden,

00:10:13.700 no carbon tax, when Hillary Clinton or Harris ran for office of the White House, no carbon tax. Trump,

00:10:20.840 of course, never imposed a carbon tax on Americans. And I think it's fair to say he never will. So on

00:10:27.040 the one hand, we're hurting ourselves. And on the other hand, we're actually helping the United States

00:10:31.440 to attract businesses from Canada with all these carbon taxes. I remember when Stephen Harper had

00:10:38.020 promised to put in a carbon tax or a variation thereof, it was to match the Americans, because he

00:10:46.180 very astutely, a smart guy, believed that if we're going to be competitive with the United States,

00:10:52.760 our regulations should match as often as possible. And that was the only time he promised the carbon tax.

00:11:01.380 Pierre Paliyev made his announcement on axing the carbon tax at Ivaco, which is a steel producing

00:11:07.380 place just outside of Ottawa. He and Mark Carney both visited steel plants recently. Carney went to

00:11:16.200 DeFasco in Hamilton, and as I said, Paliyev at Ivaco. Ivaco's had layoffs already, 150 layoff notices

00:11:22.680 given. Algoma Steel in Sault Ste. Marie, Ontario, layoff notices given. I'm not sure about Estevez in

00:11:29.820 Regina or Atlas in Edmonton, but you talk about the tariffs plus the carbon tax, which will go up on

00:11:39.900 industrial emitters April 1st, correct? Yeah, no, look, my understanding... But am I correct on that?

00:11:45.720 It still goes up? Yes, that is my understanding. So if you add Trump's tariffs and Carney's increased

00:11:52.840 carbon tax, all you're doing is asking for companies like Arcelor Mattel, which owns DeFasco

00:12:01.140 in Hamilton, to move production to one of their many other plants. They could just go down the 401,

00:12:07.920 go across the Ambassador Bridge, and start moving production to Detroit or down into Ohio or elsewhere.

00:12:15.680 We're going to be chasing away our own industry, and I just don't get it that people want to rally

00:12:23.780 around this idea and be fine with our government effectively imposing a tariff on our goods while

00:12:31.080 objecting to the Americans doing it. They have the same bad outcome. Oh, they totally do, right? And 0.99

00:12:37.840 the same outcome is higher prices, less production in Canada, and of course, fewer Canadian jobs.

00:12:42.960 And this is really why the industrial carbon tax is the worst of all worlds, okay? So what Carney is

00:12:48.680 proposing, he wants to hide this carbon tax, and he hopes Canadians won't notice when the price of

00:12:54.380 everything goes up. But the problem for Carney is that he's trying to frame this as, look, it's only

00:13:00.300 going to be the large emitters that pay for this. But nobody believes Carney. You know, Brian, we released

00:13:06.240 a Leger poll not too long ago that showed that 70% of Canadians understand that if you hit businesses

00:13:12.600 with carbon taxes, that's going to mean higher prices. Only 12% of Canadians believe Carney that

00:13:19.120 businesses are going to pay most of the costs of his industrial carbon tax. And it's not just higher

00:13:24.920 prices, as you point out, because at the end of the day, businesses only have really three options,

00:13:31.120 right? They're not going to just eat the cost of these higher taxes, higher regulations. The three

00:13:36.840 options are to pass along the cost to consumers through higher prices, or reduce their production

00:13:44.200 here in Canada, which of course means less jobs, less economic growth, less ability to withstand

00:13:50.840 Trump's tariffs. Or there's the third option, which is the worst option, because it's a combination of

00:13:56.460 both, which is both higher prices for Canadians, and then also less production here in Canada.

00:14:01.740 Yeah. Which means fewer jobs for everyday people.

00:14:06.160 Yeah, that's exactly right. That's exactly right.

00:14:09.820 So how much, look, I know the election campaign has just started, but how much do you think this

00:14:15.780 will play in? Will people be able to tie the carbon tax? A lot of them will think it's just gone,

00:14:23.180 even though as we've been discussing, it's not. Many people will think it's gone and not tie together

00:14:28.800 the idea that we're hurting ourselves while we're trying to protect ourselves against

00:14:33.760 the economic impact of Donald J. Trump.

00:14:37.820 Yeah, that's a really good question. The honest answer is, I don't know, right? We still see polls

00:14:44.760 that show a top concern for Canadians is the cost of living. Now, how much of that is you go to the

00:14:51.180 gas station, prices are still high, or they have been over the number of years. Home heating bills have

00:14:56.900 been very painful for Canadians over the last number of winners. And of course, grocery costs

00:15:02.120 are still very high. So how much of that concern will be towards the government's own policies that

00:15:08.520 have made life more expensive versus how much of that will be towards anger at Trump and his tariffs?

00:15:15.300 It's hard to say. And a lot of it depends on the election campaign of the different parties.

00:15:21.100 But I think what should be a focus of the election is not just how to deal with Trump,

00:15:27.700 you know, the diplomatic nature versus retaliatory tariffs. But I think one of the key focuses of

00:15:33.000 the election is how to actually tariff-proof Canada's economy, right? Because we've been

00:15:38.660 talking about carbon taxes this whole time. But what we also have to remember is that the carbon tax

00:15:44.180 was layered on top of another carbon tax and fuel regulations, which was layered on top of

00:15:49.320 an oil and gas cap, which was layered on top of EV mandates and all these other different

00:15:54.440 regulations that have strangled Canada's economy, which led to, what, $670 billion in natural resource

00:16:01.880 projects being stalled or suspended since 2015. So not only are we facing these energy taxes,

00:16:08.760 these energy regulations, but we're also falling behind on major tax competitiveness.

00:16:14.260 Every year, there's this report that ranks all of the OECD countries, right, our industrialized peers.

00:16:21.180 And in the latest report, you know, Canada ranked 31st out of 38 on income tax competitiveness. So 30

00:16:29.140 countries more competitive than Canada. Canada ranked 26th on business.

00:16:34.640 Is that individual or business income taxes?

00:16:36.880 So 31st on individual income taxes.

00:16:40.800 Wow.

00:16:42.160 26th on business taxes. Okay. And on both measures, we ranked behind the United States.

00:16:48.760 So what I would love to see and what I think I would love to see all parties focus on this,

00:16:53.360 who knows if they will, but it's not just about carbon taxes. It's not just about energy regulations

00:16:59.640 and getting stuff built, but it's also about fundamentally making Canada's tax system more

00:17:05.400 competitive because we're lagging behind many of our industrialized peers, including the United States.

00:17:12.140 There's this myth out there that, well, we're Canada. We've always had high taxes and we believe

00:17:17.660 in high taxes and helps build the social safety net. On the business tax side, going back to at least

00:17:24.840 Laurier, maybe even before, part of the industrial policy of Canada was lower taxes on business than

00:17:32.840 the United States so that we can attract investment. If we don't have that, we won't be able to attract

00:17:38.400 investment. Over the last decade, the liberals have kind of, you know, lost sight of that idea.

00:17:45.600 They've added on extra taxes like, oh, there's a bank tax that's just extra because you're a bank.

00:17:51.700 We'll tax you, I forget, is it a quarter or three quarter point more or something like that?

00:17:57.420 You've got taxes for surcharges for high income earners. They have really decided to try and punish

00:18:05.180 success. And, you know, I think everybody believes if you're better off, you should be paying more and

00:18:12.120 paying your fair share. I just think that the Trudeau liberals, and I don't see it changing under Mark

00:18:16.940 Carney, believe that your fair share is as much as they can take from you before you get up and leave.

00:18:22.400 Well, that's exactly right, right? I mean, under the Trudeau government, especially near the end of it,

00:18:27.160 right, they were just trying to squeeze as much money from Canadians and Canadian entrepreneurs

00:18:30.860 as they can get away with, right? And I think nothing exemplifies that point more than the capital

00:18:37.220 gains tax increase that they brought in the last budget, right? Now, of course, they didn't go through

00:18:43.000 with it this year. But what they were trying to do is essentially squeeze as much money from

00:18:48.040 entrepreneurs as they could get away with. And of course, they were trying to frame this as, you

00:18:52.320 know, oh, we're only going after the monopoly man. But that's not correct. I mean, there's been tons

00:18:57.580 of analysis done. The C.D. How Institute with Jack Mintz crunched the numbers. And it was showing that

00:19:03.960 this capital gains tax hike was really a financial sucker punch to so many ordinary Canadians who worked

00:19:10.820 their entire lives to invest in properties, to save for their retirement, or to create a business.

00:19:18.520 So we've seen this all along. And to kind of go back to your point about business taxes and

00:19:24.300 attracting investment, like that is all very good. But we also have to remember too, like what pays for

00:19:31.440 all the different social services in Canada? Well, to a long, to a large extent, it is these major

00:19:37.760 natural resource projects that come into Canada, or that are created in Canada, that allow for good

00:19:43.340 jobs to be created that allow for economic growth, but that also provide the tax revenue to pay for

00:19:49.460 things like hospitals, reducing class sizes, and stuff like that.

00:19:53.940 How did, how were the liberals successful in convincing the public and much of the media,

00:20:02.720 I would argue, in adopting their language and their ideology, the language such as the price on 0.98

00:20:09.860 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

00:20:25.740 repeated it. Now, a lot of my colleagues in the media did the same, same with the price on pollution.

00:20:30.220 How were they successful in that? Is it just a mindset that is far too prevalent in Canada that

00:20:39.260 this is the right thing to do, and we should punish ourselves, even when nobody else is punishing them?

00:20:45.320 Well, Brian, I'm going to actually say something that I think might surprise you. And this was one of the

00:20:51.000 surprising things that I did with researching for this book, right? Axing the tax. But look, I will say

00:20:57.760 that, first, I don't want to paint everyone with the same brush, right? Not everyone in the media is the

00:21:02.400 same. But a lot of people who were going along to get along with the liberal government's language, many

00:21:08.340 people in the media, many elites within the academics of Canada, they were going along with it because

00:21:15.200 they wanted to shove carbon taxes down people's throats, right? Like they supported the carbon tax. That's

00:21:20.400 why they went along with it. Now, I don't think ordinary Canadians ever fully bought into the carbon tax.

00:21:27.300 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

00:21:32.700 British Columbia first brought in the first economy-wide carbon tax in 2008, the liberal government out

00:21:39.700 there never ran on it, right? They never ran on the carbon tax in the election before that.

00:21:44.760 The same thing happened in Alberta when the NDP government brought in its provincial carbon tax.

00:21:50.220 They never ran on a carbon tax. And in fact, the first time Albertans had the opportunity to vote

00:21:55.780 on the carbon tax, they turfed the NDP and they brought in the Kenney government that repealed the

00:22:01.100 carbon tax as Bill 1. And Brian, as you'll remember, right, covering Ontario politics at the time,

00:22:06.840 it was the exact same story with the win cap and trade carbon tax, where in the election previous,

00:22:13.540 she never ran on a carbon tax. Now, let's go back to Ottawa and the liberal government. Let's go back

00:22:18.940 to 2015 because today it's easy to think of the carbon tax rightfully as Trudeau's signature tax

00:22:26.680 policy, right? It's easy to think of that. But if you go back to 2015, what do you remember about

00:22:32.720 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

00:22:46.040 hard to join the middle class. In fact, you had to squint real hard back in 2015 to find any comments

00:22:53.660 about a carbon tax. The Trudeau liberals buried a vague notion of carbon pricing 39 pages down

00:23:01.520 into their platform. And I actually think one of the fundamental flaws that brought the death to

00:23:08.420 Trudeau's consumer carbon tax is that Trudeau never really had buy-in from the Canadian people

00:23:15.240 about the carbon tax because he was never fully honest with Canadians about just how much the

00:23:20.560 carbon tax would cost. And because he was never fully honest with Canadians, never fully got buy-in,

00:23:26.160 the liberals under Trudeau were also not very honest with themselves on the actual public

00:23:33.060 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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00:24:47.760 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,

00:35:16.120 sadly, yes. I believe him. Yeah.

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 devices. Help us out by giving us a rating, leaving us a review, and tell your friends about us.

00:44:12.860 Thanks for listening. Until next time, I'm Brian Lilly.

00:44:16.200 I'm Brian Lilly.

Full Comment - March 24, 2025

We’re still being deceived about the carbon tax

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