Who Killed the Liberals’ Carbon Pricing Plan?

November 27, 2024 , Brooke Jeffrey , Comments Off on Who Killed the Liberals’ Carbon Pricing Plan?

Once upon a time there was a hugely popular environmental policy introduced by the federal government. It was called the Carbon Pricing Plan, and it was designed to reduce the greenhouse gas emissions that have been identified as the major cause of climate change. It was modelled on successful programs elsewhere and was approved by environmentalists and economists alike, no mean feat.[i] It was also supported by the vast majority of Canadians and provincial premiers. What was more, experts declared this was an approach that conservatives should logically support since it was based on the marketplace. And then, of course, there was the fact that almost everyone recognized climate change was not only real, but was increasingly causing havoc here in Canada, and something needed to be done about it.

Who can remember that now? In less than nine years this once highly regarded plan has fallen into disfavour. Actually, support for it has plummeted. By late 2024 this early success story is on life support and circling the drain. Even BC NDP premier Dave Eby and federal NDP leader Jagmeet Singh, previously enthusiastic supporters, have distanced themselves from a plan they now see as politically toxic.

How has this happened and who is to blame?

As usual in politics, the answers are far from straightforward. This is a complex policy, and the reasons for its transformation from policy saviour to policy pariah are equally complex. But these reasons are nevertheless knowable. Indeed, almost all of them are easily identified. Let us therefore count the ways in which this admirable policy has been sabotaged.

First and most obvious, the non-renewable energy industry — which is the overwhelming and growing source of these emissions, (even while other sectors have seen a marked decrease) – has been fighting tooth and nail to avoid any type of government intervention. With its nearly unlimited financial resources it has launched a continuous and aggressive campaign to influence public opinion,[ii] at the same time that it has “captured” the provincial governments of Alberta[iii] and Saskatchewan.[iv]

This leads to the second obvious cause of this about face, namely, the change in governments in several key provinces. When the plan was being negotiated with provincial premiers, Alberta and BC both had NDP governments, (Premiers Horgan and Notley) while Ontario was run by the Liberal government of Kathleen Wynn and Quebec by the Liberal government of Philippe Couillard. All were keen supporters of government action on climate change.

Consequently, in March of 2016, three months after the signing of the international Paris Accord on greenhouse gas emissions, Liberal prime minister Justin Trudeau and all premiers and territorial leaders convened in Vancouver. There they unanimously agreed to the Pan-Canadian Framework for Clean Growth and Climate Change. This produced the Greenhouse Gas Pollution Pricing Act which was introduced in the House of Commons in October of that year. The plan provided for a high degree of flexibility in how provinces met their emission requirement targets, and for a few years the plan remained both popular and a landmark piece of environmental legislation. Many experts described it as a win-win scenario for the environment and the Canadian economy.

However this positive viewpoint began to change with the election of conservative governments in several provinces. Alberta’s NDP government was replaced by the far right conservative UCP in 2020, led first by premier Jason Kenney and, since 2022, by the even more extreme Danielle Smith, who has referred to Ottawa’s “deranged vendetta” against the oil and gas industry.[v] In Saskatchewan, evidently fearing his sagging popularity could lead to problems for his Saskatchewan Party in the recent provincial election, (where he did indeed see his majority reduced), conservative premier Scott Moe recently decided to take dramatic action by declaring his government would stop collecting monies required by the federal plan of provinces who have not taken appropriate action on emissions reduction themselves. (Saskatchewan is increasingly influenced by the oil and gas industry, like Alberta, since various energy companies have developed major facilities in the southern part of the province.)

Meanwhile in early 2020 Ontario was taken over by the Conservative government of climate sceptic Doug Ford, one of whose first acts was to eliminate the existing provincial cap-and-trade program with Quebec and California. (And this move came even though such a program is also considered a perfect fit with conservative ideology.)

Not surprisingly, perhaps, this dramatic change in provincial perspective also led to an actual court challenge of the federal carbon pricing legislation by Alberta, Saskatchewan and Ontario, which went all the way to the Supreme Court. They argued the plan was actually a type of tax, and also outside the jurisdiction of the federal government. Although the Court ruled conclusively in March 2021 that the federal government was entirely justified constitutionally in introducing the plan, and that it was not a tax,[vi] these premiers have not been deterred from launching other costly court challenges, including most recently for the cap on oil and gas emissions which has so angered Ms. Smith.

But the objections of a few provincial premiers were not sufficient to produce widespread public disenchantment with the federal policy. Canadians in central and eastern Canada, and especially in Quebec, remained supportive of the federal plan until two more crucial factors came into play, adding a third and fourth element to the explanation for the plan’s imminent demise.

The third was the selection of Pierre Poilievre as leader of the Conservative Party of Canada to succeed Erin O’Toole, after that party failed to win the 2021 federal election. It will be recalled that O’Toole had tried to move his party towards the centre of the political spectrum in advance of that election, in particular by arguing that they would need to have a concrete alternative policy to address climate change if they were determined to eliminate the Liberals’ carbon pricing plan. Instead, delegates at the party’s March 2021 annual convention voted by a margin of 54% to 46% to reject even a simple motion declaring that “climate change is real.”[vii]

When the party again lost an election to the Trudeau Liberals in the fall of that year, almost no one was surprised that O’Toole’s time as leader was up. But the choice of his successor was another matter. Instead of more moderate, conventional choices such as Jean Charest, or even Ontario’s Patrick Brown, both of whom were committed to effective climate change measures, the party membership surprised many outsiders in September 2022 by choosing the far right, highly controversial former Harper cabinet minister, Pierre Poilievre. And that has made all the difference.

The man often described as “Harper’s pit bull” for his aggressive tactics in the House of Commons has since doubled down on a variety of positions that would previously have been considered politically suicidal in Canada. From his support for the so-called Trucker’s Convoy, crypto currency and various off-the-wall conspiracy theories, to his attacks on the Bank of Canada and the Supreme Court, his extreme and generally unprecedented stands on many issues, along with his aggressive attacks on opponents, have upended the discourse of Canadian politics and deeply polarized Canadian society. Not surprisingly, in many ways his conduct has earned him numerous comparisons with American president-elect Donald Trump.

Nowhere has Poilievre’s aggressive behaviour been more impactful than on his stand regarding the carbon pricing plan. Not only has he relentlessly attacked the plan, and promised to rescind it if elected, but he has not bothered to offer any alternative policy to address greenhouse gas emissions or climate change generally. While this may initially have been considered a winning strategy to capture the leadership of the Conservative Party, it would never have been expected to be successful with the broader public. Yet a mere two years’ later, popular support for the plan has cratered, and Poilievre is a major reason for this.

How has he accomplished this remarkable feat? Primarily through brilliant – if reprehensible — communications tactics:

To begin with, from Day 1 of his leadership, Poilievre has disregarded reality and referred to the plan as a tax. Others opposed to the plan have then followed suit. At the same time, he has argued that this “tax” will cost all Canadians a great deal of money, deliberately ignoring the fact that the plan includes a federal rebate, paid directly to individuals, that more than covers the cost of the plan for more than 80% of citizens. In sum, despite what he says, most Canadians will actually be better off with this plan.[viii]
Second, he has made exceptionally good use of simplistic slogans to communicate his message, rather than providing any meaningful or detailed arguments. His “Axe the Tax” slogan is a classic example of this approach.
Third, he has benefited from the incredible fundraising machine his party has created to advertise this slogan through continuous and previously unheard of levels of paid advertising, epitomizing what has come to be called the ‘permanent campaign.’ [ix] As a result, this slogan, and Poilievre’s position, is now known to virtually every Canadian.
Fourth, he has been extremely adept at using social media to disseminate not only his opposition to the plan but a wide range of misinformation and deliberate disinformation about the actual program.[x] He has also repeatedly referred to the prime minister’s “lies” about the program, and in fact has accused him of “lying about everything.”[xi]

More recently a fourth critical factor has emerged that has played perfectly into Poilievre’s hands, namely the economic downturn that has followed the end of the pandemic. Economists now agree that such a downturn was inevitable, and has occurred across the western liberal democratic world.[xii] While the Canadian economy has actually weathered this economic turbulence better than any other G7 country,[xiii] the effects of this downturn have naturally been felt most by those least equipped to handle it.

What has been termed the “cost of living” crisis has given Poilievre yet another opportunity to criticize the carbon pricing plan, which he repeatedly – and erroneously — suggests is a major culprit in the increase of unrelated costs. He quite literally never misses an opportunity to attach blame to the carbon pricing plan along with every other criticism he is levelling. Hence his opposition to the government’s recently announced plan to provide temporary GST relief and $250 cheques to working Canadians is couched in this same misleading language. “Our priority is not to save you 10 cents on a bag of potato chips right before quadrupling the carbon tax on your heat, housing, gas and groceries”, he declared,”[xiv] knowing full well that it is not anyone else’s plan either.

Whether it is Poilievre’s efforts to link the carbon pricing plan with this cost of living crisis, or the crisis itself, one thing is clear. Canadians are no longer very concerned about environmental issues. Recent public opinion polls have consistently shown that the environment and climate change are not among the top five issues identified by voters. A recent Abacus Poll is typical of these findings:

“The top issues of concern for Canadians remain consistent with our tracking over the past two years. The cost of living remains the largest issue facing more Canadians (71%), followed by housing affordability and accessibility (46%), healthcare (42%), the economy (33%), and immigration (27%). In total, 86% of Canadians put either the cost of living or housing as a top issue.” [xv]

Clearly all four factors outlined above add up to a perfect storm of opposition to the once popular carbon pricing plan, and it may be that nothing could have saved it. It is also true that environmental protection, unlike most policy areas, is both a nebulous concept and, most often, a long-term proposition, but elections occur every four years at most. This makes it difficult for governments to pursue policies that will have no immediate benefit. And it is difficult for the individual to see concrete results of a particular environmental program, or the costs of not acting to prevent environmental risks, making it more difficult to defend government initiatives.

But there is at least one more factor to consider when apportioning blame for the collapse of support for the carbon pricing plan, namely, the failure of the federal Liberal government to adequately defend the plan, a failure which could only be described as a total absence of an effective communications strategy.

This failure began with the original conception of the program. It is a truism in Canada that one of the great successes of the welfare state has been that voters understand the direct benefits they receive as a right of citizenship. Countless studies of our political culture have demonstrated that these various social programs, and especially medicare, are a fundamental aspect of national identity. Needless to say, this understanding is greatly helped by the fact that many of these programs interact directly with citizens. Federal and provincial governments provide pension, employment insurance, child benefit and welfare cheques to individuals on a regular basis. Meanwhile virtually every citizen will have occasion to visit a doctor or require the services of a hospital at some point in their life. And so it is both logical and appropriate for the architects of this climate plan to have originally suggested that the federal government provide the rebate cheques to individual citizens in the same manner, thereby cementing the link between the cost at the pump and the rebate they would receive.

Unfortunately the Liberal government did not decide to take this route, and it is arguably here that the vulnerability of the plan to misinformation originated. Instead, the government chose to deposit payments directly into most individual’s bank accounts. Worse still, there was no clear indication as to what these payments were for. Most bank statements were vague and inconclusive, with the most common phrase being ‘Government Climate Incentive’. Over time, as it became increasingly clear that most Canadians either had no idea they were even receiving the rebates or, if so, what they were for, the government finally began in September 2024 to provide a clearer label of “Canada Climate Rebate”. The government also began to launch advertisements indicating when these payments would arrive, and roughly how much they would be. [xvi] However many would argue this has been far too little too late.

And, although according to official reports the Liberal Party has received less than one third the funds raised by the Conservatives in the last quarter, (and that party has raised more money than all other parties put together), [xvii] it is nevertheless true that the Liberals until recently had chosen not to respond to virtually any of the negative Conservative advertising about that program, or in fact to attack ads about any aspect of the governing Liberals’ record. In 2023 alone the Conservatives allegedly spent 30 times more money on advertising than the party in power.

Needless to say this reluctance to respond aggressively to Conservative attack ads has been increasingly criticized, especially by party insiders.[xviii] It was not until late October of 2024, as the Liberals began to organize their next election campaign team, that a decision was made to engage in a massive advertising campaign to refute Conservative messaging. [xix] However that campaign will focus on a range of issues, including the Conservative leader himself, and is unlikely to provide the kind of strong reinforcement necessary to save the carbon pricing plan in particular.

At the end of the day, the decline in support for the carbon pricing plan must be seen as a consequence of the sharp decline in support for the federal Liberals, since various studies have demonstrated the increasing polarization of partisan support has now become inextricably linked with support or rejection of various policies. As one recent study concluded, “People’s partisan, ideological preferences now dominate their perceptions of carbon pricing, more so than the objective costs or benefits that come from the policy.”[xx]

Unless the Liberals are able to reverse the trend and regain sufficient support to return to power in the next federal election, expected anytime between the spring and fall of next year, it seems certain that the carbon pricing plan is dead in the water. As professor Chris Reagan of McGill concluded, “It’s unfortunate that you’re going to lose what essentially is a good policy.” Reagan also pointed out that, absent this plan, which has been making modest progress towards emission reduction goals, Canada will be unable to meet any of its international commitments on climate change since the Poilievre Conservatives have offered up absolutely no alternatives. “My big fear, actually, is that they will put nothing in its place.”[xxi]

With extraordinary weather patterns – from floods and hurricanes to atmospheric streams, massive forest fires and droughts — plaguing almost every part of Canada in recent years, the failure to act may prove to be something those who call for the end of the carbon pricing plan will come to regret.

[i] https://ecofiscal.ca/2024/03/26/open-letter-carbon-pricing/

[ii][ii] https://globalnews.ca/news/5712422/energy-giants-full-page-newspaper-ads/ and https://forourgrandchildren.ca/story-link/unpacking-big-oils-fierce-pushback-against-new-truth-in-advertising-rules/

[iii] https://globalnews.ca/news/10851007/alberta-oil-and-gas-emissions-cap-and-trade/

[iv]https://www.cbc.ca/news/canada/saskatchewan/sask-moe-carbon-tax-1.7017833

[v] https://nationalpost.com/news/canada/liberal-cap-emissions-ottawa-west

[vi] https://icapcarbonaction.com/en/news/canadian-supreme-court-upholds-federal-carbon-pricing-law

[vii] https://www.cbc.ca/news/politics/conservative-delegates-reject-climate-change-is-real-1.5957739

[viii] https://www.nationalobserver.com/2024/03/26/analysis/truth-about-carbon-tax

[ix] https://www.ubcpress.ca/asset/20236/1/9780774834483_Excerpt.pdf

[x] https://www.nationalobserver.com/2024/03/26/analysis/truth-about-carbon-tax

[xi] https://www.youtube.com/watch?v=pAcEP4Xy2-I

[xii] https://www.theglobeandmail.com/business/commentary/article-global-economy-covid-19-pandemic/