I support the government’s…

I support the government’s plans to phase out the previous government’s problematic cap-and-trade scheme. It was unfair in its application across the economy. It created a huge slush fund for pet projects of the government. It did little to help the low and middle class deal with the extra costs of carbon based goods and services. It was invisible, and as designed, it was not going to
have much impact on the immediate challenges that we face from carbon pollution.

So I am pleased that the new government has created an opportunity for a new policy that can really address the problem of climate change and the contribution coming from greenhouse gas emissions.

I believe that carbon dividends are the solution. This entails a steadily rising fee on carbon pollution with 100% of the fees collected returned to households. This fee and dividend approach sends a strong market signal, and gives both the time to make a transition and also the money to people to help pay for the transition. This policy is supported by economists as the simplest, most effective way of addressing a “bad” thing like invisible carbon pollution. It is supported by conservatives because it uses the market rather than the government to effect a needed change. It is supported by liberals because it takes account of the needs of low income households as well. It is supported by the people because it puts money in their pocket to make the transition that most people see is needed.

A study supporting this proposal for a carbon fee and dividend was published last month by Canadians for Clean Prosperity, headed by Mark Cameron, Stephen Harper’s former policy director. This study showed that virtually all households would benefit financially from a carbon dividend plan. For example, if all the revenues from the current federal government’s “backstop” carbon pricing plan were returned to households, virtually all Ontario households would receive in 2020 a net benefit, ranging from $295/yr for low income households to $16/yr for high income households. This is a win-win-win opportunity.

Business and industry also need policy clarity and longer time horizons in order to make their investment decisions and a transition to a low-carbon economy. So if Ontario is to become more open for business, we need to put in place policies that have popular support and are persistent regardless of the government’s make-up. A carbon fee and dividend is one such policy.

A carbon fee and dividend in Ontario would work as follows:
• A fee is placed on carbon-based fuels at the source (well, mine or port of entry)
• The fee is increased at a pace that motivates the emissions reductions necessary to avoid catastrophic consequences
• Protect low and middle income households from increased energy costs associated with the carbon fee by returning 100% of the dividends collected by back to Ontarians.
• A predictably increasing carbon price will send a clear market signal which will unleash entrepreneurs and investors in the new clean-energy economy.
• To prevent offshoring of carbon emissions, especially as the carbon fee rises, Canada’s federation of provinces and territories would work with the federal government to enact border carbon adjustments.

Bill 4 says that the government is required to establish targets for reducing the amount of greenhouse gas emissions in Ontario and that the Minister of Environment, Conservation and Parks is required to prepare a climate change plan. I urge you to adopt a carbon fee and dividend as part of that plan. The first compliance period for Ontario’s old cap-and-trade program ends December 2020. That is an ideal time to bring in a better plan like carbon fee and dividend in order to avoid lawsuits and reassure business that we are truly open for them too.