The carbon tax is the least of our economic problems

Ignoring climate change could cost trillions in the long run

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A yellow car driving down a winding road with dollar signs coming out the exhaust pipe.
ILLUSTRATION: Victoria Xi / The Peak

By: Kaja Antic, Staff Writer

As the effects of climate change grow increasingly dangerous each year, the Canadian government introduced a federal carbon tax in 2018 to decrease emissions, with BC being the first to introduce this policy in 2008. Discussions about the tax’s efficacy have increased as the next federal election draws near. However, the cost is minimal in comparison to the benefits of reducing our collective carbon footprint, especially considering that the largest emitters are transportation and fossil fuel corporations.

The carbon tax is a percentage added to purchases that emit greenhouse gases, like gas for your car or natural gas heating for your house. Canada’s current carbon tax is $80 per tonne of carbon emissions. It’s intended to increase by $15 yearly until 2030. The up-front cost of emitting excess carbon is meant to incentivize a gradual move toward clean energy for producers and consumers. 

The consequences of climate change can end up costing much more in the long run than a few cents per litre of gas. If there are little to no changes to emissions and climate policies, the effects could cost Canada up to $5.5 trillion by the end of the 21st century. The carbon tax produces significant results. In a study of countries that have adopted the carbon tax, they found it decreased emissions by 15%.

Current debates about the carbon tax have gone beyond disagreement with the cost itself. The Conservative Party of Canada claims carbon tax regulations are greatly impacting the national cost of living — including rising grocery prices. While gas prices are rising along with the general cost of living across the country, the carbon tax itself is not the cause of economic strife. It may be an inconvenience for the average person, but reducing emissions will ultimately benefit everyone. 

The consequences of climate change can end up costing much more in the long run than a few cents per litre of gas.

The same cannot be said for the extreme price-gouging seen in the housing market, grocery costs, and telecommunications monopolies. Eliminating the carbon tax won’t address the country’s widespread affordability crisis — campaigns revolving around this rhetoric are a distraction. The fixation on the carbon tax neglects policies that could benefit Canadians more, rather than just corporate interests. 

Currently, I drive a car with a 40 litre gas tank. If I fill that up from empty, I pay around $7 in carbon tax from that one stop. I know my experience isn’t the same as everyone else in Canada. Ford F-150 models in the 2020s vary from 23 gallon (87 litre) gas tanks to 36 gallon (136 litre) tanks, depending on the specifications chosen. On the lower end, that’s $15.32 per fill-up from empty in BC. On the higher end, it’s $23.95 per fill-up from empty. While that number isn’t negligible, gas prices are surging due to corporate price-gouging and supply chain issues, not the carbon tax alone. Canada’s affordability crisis is really what we should be paying attention to, and addressing it would make the carbon tax feel much more manageable. 

The carbon tax also impacts major emitters more than the average consumer, as individuals and small businesses benefit from tax credits. In BC, the provincial government has its own automatic climate action tax credit to help residents offset the carbon tax cost, with a similar rebate available to small business owners. According to the Government of Canada, around 90% of carbon tax proceeds “go right back to individuals.” The tax has more implications for corporate entities, and rightfully so — those leading in emissions rates should be expected to lead the transition to clean energy. 

While the carbon tax is a good step toward sustainability, that’s not to say there isn’t still work to be done to limit emissions across the country. The federal government has recently announced an emissions cap for the oil and gas industry, limiting how much pollutants corporations are allowed to produce. This is another step toward holding major emitters accountable.

It’s understandable to view another tax as a bad thing, though it truly is in our best interests. While it’s important to address the rising cost of living in this country, the carbon tax is not a major culprit. Protecting the climate and reducing emissions can also help prevent further hardships for those living in Canada. Compared to major contributors to the current cost of living, the carbon tax is not a heavy burden on our wallets. Concerns about it are nothing more than a distraction from taking genuine action against the affordability crisis.

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