We’re still being deceived about the carbon tax
Episode Stats
Words per Minute
165.44684
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
00:00:00.000
Ontario, the wait is over. The gold standard of online casinos has arrived. Golden Nugget
00:00:06.000
Online Casino is live, bringing Vegas-style excitement and a world-class gaming experience
00:00:11.040
right to your fingertips. Whether you're a seasoned player or just starting, signing up is fast and
00:00:16.680
simple. And in just a few clicks, you can have access to our exclusive library of the best slots
00:00:21.740
and top-tier table games. Make the most of your downtime with unbeatable promotions and jackpots
00:00:27.220
that can turn any mundane moment into a golden opportunity at Golden Nugget Online Casino.
00:00:32.820
Take a spin on the slots, challenge yourself at the tables, or join a live dealer game to feel the
00:00:37.920
thrill of real-time action, all from the comfort of your own devices. Why settle for less when you
00:00:43.140
can go for the gold at Golden Nugget Online Casino? Gambling problem? Call Connex Ontario,
00:00:49.320
1-866-531-2600. 19 and over, physically present in Ontario. Eligibility restrictions apply. See
00:00:56.340
goldennuggetcasino.com for details. Please play responsibly.
00:00:59.720
Bank more encores when you switch to a Scotiabank banking package. Learn more at
00:01:08.120
scotiabank.com slash banking packages. Conditions apply. Scotiabank. You're richer than you think.
00:01:15.100
Canada did what? A podcast from Post Media. Uncover the untold stories of the Canadian history
00:01:21.200
you might think you remember with me, Tristan Hopper. From one Prime Minister's crazy camaraderie
00:01:27.020
with communists, to the war over metric conversion, and the harrowing reality of the October crisis.
00:01:32.900
Subscribe now to Canada Did What? Wherever you get your podcasts.
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
00:03:16.120
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
00:03:37.160
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
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
00:05:01.120
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.
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
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
00:14:37.820
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.
00:16:42.160
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
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.
00:23:48.640
Did you lock the front door? Check. Close the garage door? Yep. Installed window sensors,
00:23:56.800
smoke sensors, and HD cameras with night vision? No. And you set up credit card transaction alerts,
00:24:01.740
a secure VPN for a private connection, and continuous monitoring for our personal info on the dark web?
00:24:06.500
Uh, I'm looking into it? Stress less about security. Choose security solutions from Telus for peace of
00:24:13.080
mind at home and online. Visit telus.com slash total security to learn more. Conditions apply.
00:24:20.540
Wait, I didn't get charged for my donut. It was free with this Tim's Rewards points.
00:24:29.340
Oof. Earn points so fast, it'll seem too good to be true. Plus, join Tim's Rewards today and get
00:24:34.980
enough points for a free donut, drink, or Timbits. With 800 points after registration, activation,
00:24:39.900
and first purchase of a dollar or more. See the Tim's app for details at participating restaurants
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
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.
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
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.