Ontario Climate Plan vs. Federal Carbon Tax (and Rebate)

Ontario Climate Plan vs. Federal Carbon Tax (and Rebate)

According to a recent article published in the National Post by author Jesse Snyder, a recent report released by Enviroeconomics in partnership with Canadians for Clean Prosperity found that Ontario's proposed climate change would be double the cost of the federal Liberals' climate change plan under the Greenhouse Gas Pollution Pricing Act, colloquially referred to as the "federal carbon tax". This, of course, is in addition to the millions of good tax payers' dollars spent after bad, nonsensical advertising campaigns spent towards raising public awareness about the Progressive Conservative government's stance towards federal liberal climate change politics.

Federal Carbon Tax and Rebate vs. Ontario Climate Plan

A report released on June 3, 3019 by Canadians for Clean Prosperity suggests more precisely that the proposed provincial climate change plan would be as much as 59% more expensive for Ontario businesses and residential homes by 2022 as compared to the scheme laid out under the federal government's Greenhouse Gas Pollution Pricing Act.  This figure would then drop to approximately 50% by the year 2030.  

An online posting referenced by Canadians for Clean Prosperity entitled "Ontario Climate Plan" reads as its headline "By replacing the federal carbon tax and rebate, Ontario's Climate Plan will cost families. It then states that the Ontario government's climate plan would cost households in Ontario $210 per year by 2022 should it replace the federal carbon tax and rebate program. The estimated cost to individuals households would be $80 by 2022 in comparison to a net benefit of $130 per household under the federal "carbon tax" and rebate program.  These figures are said to be based on a report released by Enviroeconomics in partnership with Canadians for Clean Prosperity.
Ontario Climate Plan Cost vs. Federal Carbon Tax and Rebate Cost

Cost Per Tonne: Federal Carbon Tax and Rebate vs. Ontario Climate Plan

In sum, on a per tonne basis, the Ontario Climate Plan will cost almost double the federal carbon tax and rebate scheme established under the federal government's Greenhouse Gas Pollution Pricing Act. The reason for the increased cost of Ontario's climate plan is, simply stated, that it would replace the federal carbon tax under the Greenhouse Gas Pollution Pricing Act, supposedly the lowest cost way to reduce emissions, with a series of much more costly regulations.  Or, worded differently, economy-wide carbon taxes are cheaper to administer than regulations targeting specific sources of emission, as would be the case under Ontario's Climate Plan.  Whereas each tonne removed under the federal's carbon tax costs approximately $32, the cost under the Ontario Climate Plan would be approximately $62 per tonne.
Per Tonne Cost of Ontario Climate Plan vs. Federal Carbon Tax and Rebate Plan

Why is Ontario's Climate Plan More Expensive?

Experts have consistently opined that carbon pricing is the simplest method, and therefore, lowest cost method of reducing carbon emissions. By contrast, the implementation of the Ontario Climate Plan to reduce emissions would involve the application of 8 different and costly key measures. 

Carbon pricing is widely recognized as the lowest cost way to reduce emissions.  The Ontario plan to reduce emissions consists of 8 key measures. Only one of these measures, the Industrial Performance Standard (IPS), is a form of carbon pricing.  The remaining seven measures are more expensive (see chart). 

Rebates: Federal Carbon Tax and Rebate vs. Ontario Climate Plan

Another patently obvious difference between the federal carbon tax and rebate plan and Ontario's Climate Plan is the existence of a rebate in the former, and the absence of same in the latter. In total, it is estimated that Ontario's Climate Plan will cost households $450 million annually by the year 2022, rising to $924 million in 2030.  Conversely, the federal carbon tax and rebate divests all money back to households and businesses, leaving households with a net gain of $728 million, or $130 per household.
Ontario Climate Plan Rebates vs. Federal Carbon Tax Rebates

Concluding Remarks on Ontario's Climate Plan

The government of Ontario has attacked the federal carbon tax established under the Greenhouse Gas Pollution Pricing Act on many different fronts.  It opposed the federal carbon tax in Ontario, despite opting into or, attracting the application of the federal carbon tax by: (1) scrapping the climate change plan developed by the previous liberal government; (2) failing to implement its own provincial plan that would meet Canada's international obligations under the Paris Agreement.  Leaving aside the fact that the federal government never in fact claimed that a carbon tax was the only way, it launched a multi-million dollar advertising campaigns claiming that a carbon tax "is not the only way" to fight climate change despite not offering any alternative of its own. It then launched a baseless constitutional challenge, bogusly claiming that climate change is a provincial matter.  Despite the Saskatchewan Court of Appeal's decision to the effect that the federal government acted within its constitutionally endowed legislative powers, Doug Ford embarked on a mindless crusade to continue fighting the carbon tax. Finally, more recently, it was taken the angle that the federal carbon tax and rebate program is too expensive, when its own proposed plan would cost nearly twice as much. All the above efforts by Doug Ford to address climate change in Ontario lacks any kind of sincerity towards Ontarians.  

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