The Chamber and the Carbon Tax

Tuesday, September 3, 2019

Climate change is a serious threat to our way of life, and its consequences are already being felt in rising food prices, droughts, and extreme weather phenomena. Canada has received a higher level of warming since 1948 than most countries in the world and has seen a correspondingly higher level of climate impact, with Canadian weather warming at twice the global average rate. Governments in Canada and the world have the difficult job of finding solutions to mitigate climate change without causing economic disruption or hardship.

The impact of climate change is already being felt by Canadian businesses. Severe flooding in Toronto in 2017 forced the closure of the Islands tourist hotspot for most of the busy season, while similar levels of flooding are being seen again this year. Canadian insurance claims due to natural catastrophes have risen from $400 million per year a few decades ago to over $1 billion per year in 2018. This is likely an underestimate, as climate events not considered catastrophic (i.e. total claims under $25 million) are not included. Annual payments by the Disaster Financial Assistance Arrangements (DFAA) offices have increased by 2,000 percent in less than two decades. The causal relationship between climate change and extreme weather is well-understood and extensively documented.

The GNCC recognizes the need for urgent action to address climate change and the impact it is already having on the Canadian economy and the Canadian people. Different proposals have been put forward, including both the previous Government of Ontario’s cap-and-trade program and the federal carbon tax program, which was first endorsed and then opposed by Ontario’s Progressive Conservative party. While there are many carbon tax and cap-and-trade plans in the world, all are market-based solutions that can, if applied correctly, reduce emissions while promoting economic growth or, at the very least, not noticeably reducing it. California’s cap-and-trade program has not produced any economic slowdown in the years since its introduction, for instance.

That aside, it remains to be seen how the federal carbon tax will affect the economy, and the GNCC reserves judgement concerning the long-term effects of the program. Nevertheless, the GNCC asks all political leaders to commit to a program that will reduce emissions while utilizing market mechanisms to promote investment and growth in green alternatives. The federal carbon tax is such a program, and the GNCC is committed to working with governments at all levels in order to help this program realize its goals of emissions reduction coupled with economic growth and the cutting of red tape for businesses and individuals alike.