Transcript: Carbon Pricing for Ontario? | Jan 29, 2015

Steve sits in the studio. He's slim, clean-shaven, in his fifties, with short curly brown hair. He's wearing a gray suit, white shirt, and striped red and pink tie. Behind him, a wall screen reads “The Agenda, with Steve Paikin.”

Steve says ONTARIO SEEMS POISED
TO MOVE ON ITS COMMITMENT TO
REDUCE GREENHOUSE GAS EMISSIONS,
WITH TALK OF CARBON TAXES, CAP
AND TRADE AND CARBON PRICING
CIRCULATING BROADLY AROUND
QUEEN'S PARK.
JOINING US NOW TO HELP US
ANALYZE THE OPTIONS:
IN THE NATION'S CAPITAL:
ELISABETH DeMARCO, SENIOR
PARTNER WITH ZIZZO ALLAN DeMARCO LLP;
AND NICHOLAS RIVERS, CANADA
RESEARCH CHAIR IN CLIMATE AND
ENERGY POLICY AT THE UNIVERSITY
OF OTTAWA;

Elizabeth and Nicholas appear on screen sitting in an office. She’s in her thirties, with long straight chestnut hair, and wears a black jacket and a white shirt. He’s also in his thirties, clean-shaven, with short blond hair. He’s wearing a brown suit and a checkered white shirt.

Steve continues AND WITH US IN STUDIO:
CANDICE MALCOLM, ONTARIO
DIRECTOR WITH THE CANADIAN
TAXPAYERS FEDERATION AND FELLOW
WITH THE CANADIAN DEFENCE AND
FOREIGN AFFAIRS INSTITUTE.

Candice is in her early thirties, with long wavy brown hair. She’s wearing an aqua blazer over a black shirt, and a pearl pendant necklace.

Steve continues I'M HAPPY TO WELCOME OUR TWO
GUESTS IN OTTAWA AND CANDICE YOU
HERE IN TORONTO, ALL ROOKIES ON
THIS PROGRAM, FIRST TIMERS.
SO THANK YOU VERY MUCH ALL FOR
JOINING US HERE.
NICK, LET'S START WITH THE
BASICS, PLEASE.
WHEN A GOVERNMENT SAYS IT IS
LOOKING TO ACT ON, QUOTE,
UNQUOTE, CARBON PRICING, WHAT
EXACTLY DOES THAT MEAN?

A caption appears on screen. It reads "Nicholas Rivers. University of Ottawa."

Nicholas says IT MEANS
IT'S GOING TO PUT A PRICE ON
CARBON EMISSIONS.
SO IT HAS TWO GENERAL OPTIONS
FOR DOING THAT.
IT CAN USE A CAP-AND-TRADE SYSTEM.
THIS IS AN IMPLICIT WAY OF
PUTTING A PRICE ON CARBON EMISSIONS.

The caption changes to "Carbon pricing for Ontario? Cap, trade, tax."

Nicholas continues EACH ALLOWANCE IS REQUIRED FOR A
FIRM OR HOUSEHOLD.
IT HAS A VALUE IN THE MARKET.
IF YOU WANT TO EMIT A TON OF
CARBON AS A FIRM, YOU HAVE AN
ALLOWANCE, AND THAT'S A PRICE ON CARBON.
IT'S A DIRECT WAY OF PUTTING A
PRICE ON CARBON.
IN THIS CASE GOVERNMENT EXPLICIT
PUTS A PRICE ON CARBON AND WHEN
YOU PUT IT INTO THE ATMOSPHERE,
YOU PAY THE PRICE.
THEY BOTH AS A RESULT END UP
ENCOURAGING FIRMS AND
INDIVIDUALS TO REDUCE THEIR
CARBON EMISSIONS BECAUSE
EMITTING ALL OF A SUDDEN BECAME
MORE EXPENSIVE.

Steve says JUST GOING BACK TO
THE BASICS HERE, WHY WOULD A
GOVERNMENT WANT TO PUT A PRICE
ON CARBON TO BEGIN WITH?

The caption changes to "Elisabeth DeMarco. Zizzo Allan DeMarco LLP."

Elisabeth says I THINK
THERE ARE TWO MAIN REASONS:
FIRST OF ALL, THEY'RE VERY
INTERESTED IN REDUCING
GREENHOUSE GAS EMISSIONS, WHICH
IS CRITICAL IN A
CARBON-CONSTRAINED WORLD.
AND SECONDLY, THEY WANT TO
ENSURE THAT THEIR GOODS AND
SERVICES AREN'T BEING PREJUDICED
BY NEIGHBOURING CARBON BORDER
TAX ADJUSTMENTS, SO CERTAINLY
THEY WANT TO ENSURE THAT THEY
REMAIN COMPETITIVE IN AN
INCREASINGLY CARBON CONSCIOUS
WORLD THAT IS PUTTING A PRICE ON
CARBON.

Steve says CAN I INFER THAT YOU
ARE IN FAVOUR OF DOING SUCH A THING?

Elisabeth says I'M
CERTAINLY IN FAVOUR OF CARBON
PRICING, AND I'D LIKE TO TASK
THE MEDIA WITH MAYBE NOT SEEING
AS MUCH OF A DISTINCTION BETWEEN
A TAX OR A CAP AND TRADE SYSTEM
AND WORRYING MORE ABOUT THE
DETAILS OF HOW THE PROGRAM IS
CREATED AND IMPLEMENTED.

Steve says OKAY, UNDERSTOOD.
NICHOLAS, AGAIN, SAME QUESTION
TO YOU.
DO I INFER THAT YOU'RE ALSO IN
FAVOUR OF PUTTING A PRICE ON CARBON?

Nicholas says ABSOLUTELY.
MY CAVEAT WOULD HAVE BEEN
EXACTLY THE SAME.
THESE SYSTEMS CAN WORK NEARLY
IDENTICALLY IF THEY'RE DESIGNED
NEARLY IDENTICALLY.
SO ALL THE NUANCES AND THE
DETAIL OF HOW THESE POLICIES ARE
DESIGNED, WHETHER THEY COVER ALL
THE SECTORS OR JUST A SUBSET OF
THE SECTORS, WHETHER THEY HAVE A
HIGH OR LOW PRICE, WHAT THEY DO
WITH THE REVENUE THAT'S RAISED
FROM THESE CARBON PRICING
MECHANISMS, WHETHER THEY RETURN
IT TO EMITTERS OR RETURN IT TO
SAY CERTAIN HOUSEHOLDS OR USE IT
TO CUT TAXES, WHETHER THEY USE
IT TO INVEST IN GREEN GOODS,
THESE ARE THE DESIGN DECISIONS
AROUND CARBON PRICING THAT
REALLY INFLUENCE THE
EFFECTIVENESS AND EFFICIENCY OF
THE PROGRAMS MORE SO THAN THE
CHOICE BETWEEN CAP AND TRADE AND
CARBON TAX.

Steve says WE KNOW WHAT IT IS
AND WHY GOVERNMENTS WANT TO DO IT.
CANDICE, THAT TAKES ME TO YOU.
WHAT'S YOUR VIEW ON IT?

The caption changes to "Candice Malcolm. Canadian Taxpayers Federation."

Candice says WHENEVER
WE'RE GOING TO IMPLEMENT A BROAD
BASED POLICY THAT HAS EFFECTS
THROUGHOUT THE ECONOMY, WE
SHOULD BE SKEPTICAL AND CAUTIOUS.
CONSIDER NOT ONLY THE FORESEEN
UN -- OR FORESEEN CONSEQUENCES
OF IMPLEMENTING THIS KIND OF A
TAX OR PRICING SCHEME, BUT ALSO
THE UNFORESEEN POTENTIALLY
ADVERSE CONSEQUENCES,
PARTICULARLY TO THE ECONOMY, HOW
IT WILL AFFECT ECONOMIC GROWTH,
HOW IT WILL AFFECT HOUSEHOLDS,
PARTICULARLY LOW INCOME
HOUSEHOLDS AND FOLKS THAT
ALREADY STRUGGLE TO MAKE ENDS MEET.
WHEN YOU'RE TALKING ABOUT
IMPOSING THIS KIND OF A BROAD
TAX, WE SHOULD CERTAINLY BE
CONSCIOUS OF ALL OF THE
DIFFERENT CONSEQUENCES
THROUGHOUT THE ECONOMY, AS WELL
AS BALANCING THAT WITH A LOOK AT
CARBON EMISSIONS AND HOW
EFFECTIVE THESE KINDS OF TAXES
AND SCHEMES HAVE WORKED IN OTHER
JURISDICTIONS.
HAVE THEY ACTUALLY PRODUCED THE
OPTIMAL OUTCOME THAT WE'VE
INTENDED OR HAS SOMETHING ELSE HAPPENED.
I THINK WHEN YOU LOOK AT IT A
LITTLE BIT MORE BROADLY, YOU SEE
THAT THESE KIND OF POLICIES
HAVEN'T ACTUALLY LIVED UP TO
WHAT WE'VE BEEN PROMISED THAT
THEY'RE GOING TO DELIVER.

Steve says LET ME FOLLOW UP ON THAT.
HAVE YOU LOOKED AT OTHER
JURISDICTIONS THAT HAVE BROUGHT
IN THIS KIND OF A NEW IDEA FOR
PUTTING A PRICE ON CARBON AND
HAVE THERE BEEN CONSEQUENCES
THAT WERE UNFORESEEN THAT YOU
THINK WITH THE BENEFIT OF
HINDSIGHT OUGHT NOT TO HAVE
HAPPENED.

Candice says YEAH, SURE.
WE CAN LOOK AT AUSTRALIA.
THEY BROUGHT IN A CARBON TAX AND
IT WAS REPEALED.
IT WAS INCREDIBLY UNPOPULAR.
PEOPLE DIDN'T HAVE A FEELING
THAT WAS HELPING REDUCE CARBON
EMISSIONS IN AUSTRALIA.
THEY FELT THEY WERE BEING
HANDCUFFED AND THAT GIVEN OTHER
EFFORTS AROUND THE WORLD, THEIR
EFFORTS WERE FUTILE.
THE RECENT AUSTRALIAN GOVERNMENT
WAS BROUGHT IN ON A CAMPAIGN
SOLELY -- ONE OF THE PRIME
PROMISES OF THAT CAMPAIGN WAS TO
ELIMINATE THE CARBON TAX AND THEY DID.
A TYPICAL FAMILY IN AUSTRALIA
SAVES 500 dollars.
YOU CAN LOOK AT BRITISH COLUMBIA
WHO BROUGHT IN A CARBON TAX IN 2008.
THERE'S BEEN A COUPLE OF
DIFFERENT STUDIES LOOKING AT
CARBON EMISSIONS IN BRITISH COLUMBIA.
RESEARCH THAT I'VE SEEN OUT OF
THE UNIVERSITY OF NORTHERN
BRITISH COLUMBIA SHOWS THAT
BRITISH COLUMBIA ACTUALLY HASN'T
REDUCED CARBON EMISSIONS AS FAST
AS THE REST OF CANADA.
SO I THINK THAT THERE ARE A
COUPLE OF PROBLEMS WITH THE
CARBON TAX IN REAL LIFE IN THAT
IT DOESN'T ACTUALLY REDUCE
EMISSIONS IN THE WAY THAT IT
CLAIMS THAT IT SHOULD.

Steve says LET ME GO TO
ELISABETH ON THAT THEN.
DO YOU AGREE THERE ARE PROBLEMS
OF UNFORESEEN CONSEQUENCES AND
PUTTING A PRICE ON CARBON
DOESN'T ACTUALLY ACHIEVE WHAT
YOU JUST SAID IT OUGHT TO
ACHIEVE, NAMELY A REDUCTION IN
THE POLLUTION IT'S CAUSED?

Elisabeth says I
WOULDN'T AGREE THAT THAT'S
UNIFORMLY THE CASE.
I WOULD SAY THAT THE DEVIL IS IN
THE DETAIL AND DESIGN DOES
MATTER.
BUT, STEVE, WHAT YOU REALLY HAVE
TO LOOK AT AS WELL, AND I THINK
A LOT OF THE CLIMATE SKEPTICS OF
THE WORLD ARE VERY RETICENT TO
LOOK AT IS THE COST OF INACTION.
SO DO YOU REALLY WANT TO SUBJECT
CANADIAN GOODS AND SERVICES
LEAVING THE JURISDICTION TO
CARBON -- TAX ADJUSTMENTS FROM
THE LIKES OF THE U.S., FROM
CHINA, AND FROM OTHER
JURISDICTIONS THAT ARE CLEARLY
DESIGNING SYSTEMS THAT HAVE THAT
IN THEM?

Steve says WHAT'S THE ANSWER TO THAT?

Elisabeth says ABSOLUTELY NOT.
LET'S LOOK AT WHAT TARGET WE
WANT TO ACHIEVE, FIRST OF ALL.
SECONDLY, WHAT IS THE MOST
EFFICIENT, AND CERTAINLY I'LL
GIVE CANADA EFFICIENT, WE WANT
AN EFFICIENT AND EFFECTIVE SYSTEM.
AND THEN FINALLY, WHAT ARE THE
COSTS OF INACTION IF WE DON'T
IMPLEMENT SOMETHING?
THOSE ARE THE THREE PARAMETERS
WE REALLY WANT TO DRIVE HOME IN
DESIGNING A SMART CARBON SYSTEM,
PRICING SYSTEM, AND WHAT WE ALSO
WANT TO DO IS REALIZE THAT IN
ANY ACTION IT'S NEVER PERFECT IN
INITIAL DESIGN.
SO DESIGN IT TO BE REEVALUATED
ON AN INTERIM BASIS.
NO, WE'RE NOT GOING TO GET
EVERYTHING PERFECT IN THE FIRST
INSTANCE, AND MUCH LIKE ALBERTA
HAS DONE, WHICH HAS BEEN VERY EFFECTIVE.
MUCH LIKE Québec HAS DONE, WHICH
IS BECOMING VERY EFFECTIVE.
AND THE E.U. HAS DONE, WHICH WAS
EFFECTIVE IN ITS FIRST INSTANCE
AND CONTINUES TO BE A PRICE
DRIVER, DESIGN IT TO BE
REVISITED ON A REGULAR BASIS.

Steve says NICHOLAS, I TAKE ALL THAT.
HOWEVER, I IMAGINE NOT JUST THE
DESIGN BUT WHO DOES THE
DESIGNING IS ALSO IMPORTANT
HERE, AND BY THAT I MEAN, THERE
ARE GOVERNMENTS WHICH HAVE
RECORDS ON TAXATION THAT SOME
PEOPLE FIND TO BE UNSUPPORTABLE
AND IF A GOVERNMENT WERE TO COME
FORWARD PLEDGING, LET'S SAY, TO
PUT A PRICE ON CARBON, A
GOVERNMENT, FOR EXAMPLE, THAT
MIGHT HAVE ALREADY PROMISED ONCE
OR TWICE OR THREE TIMES IN THE
PAST NOT TO RAISE TAXES AND THEN
DONE SO, IS THAT PART OF THE
ISSUE HERE IN TERMS OF GETTING
PUBLIC BUY-IN?

Nicholas says I THINK
THERE'S NO QUESTION THAT PUBLIC
BUY-IN IS A TOUGH SELL ON ANY OF
THESE CARBON PRICING SCHEMES.
CARBON ITSELF, REDUCING
GREENHOUSE GAS EMISSIONS, HAS
PROVEN TO BE ONE OF THE
THORNIEST PROBLEMS THE WORLD HAS
ATTEMPTED TO TACKLE.
SO I THINK, YOU KNOW, THERE'S NO
QUESTION THAT THESE ARE TOUGH
POLICIES TO PASS.
I THINK THERE'S ALSO NO
QUESTION, VIRTUALLY NO QUESTION
THAT THESE ARE THE RIGHT
POLICIES TO PASS.
FOR EXAMPLE, THE WORLD BANK AND
THE IMF, A MAJOR POLL OF THE TOP
ECONOMISTS COME TO THE SAME
CONCLUSION, THE CHEAPEST WAY TO
REDUCE CARBON EMISSIONS IS PUT A
PRICE ON CARBON EMISSIONS.

Steve says I PROBABLY WASN'T
WELL DISGUISING WHO I WAS
TALKING ABOUT IN THE LAST
QUESTION, THE PROVINCIAL
LIBERALS PROMISED NOT TO RAISE
TAXES AND THEN DID SO, AND THEY
MAY SAY, AS THEY BRING FORWARD
AN IDEA HERE, DON'T WORRY,
EVERYBODY, IT'S GOING TO BE
REVENUE NEUTRAL, IT'S NOT GOING
TO COST EXTRA AT THE END OF THE
DAY, IT'S GOING TO COST POLLUTERS MORE.
IF YOU DON'T POLLUTE, YOU'RE FINE.
DO THEY HAVE THE CREDIBILITY TO
BRING FORWARD THAT ARGUMENT?

Candice says I DON'T THINK THEY DO.
I THINK THE GOVERNMENT --
PREMIER WYNNE HERSELF DURING THE
LAST CAMPAIGN FIRST SAID SHE
WOULD NOT RAISE TAXES ON THE
MIDDLE CLASS AND THEN SAID
DURING THE CAMPAIGN IT WAS NOT
PART OF HER PLAN, HER
GOVERNMENT'S PLAN TO BRING IN A
CARBON TAX.
I DON'T THINK YOU CAN RUN AND
WIN AN ELECTION PROMISING THE
PEOPLE NOT TO INCREASE TAXES AND
THEN AS SOON AS YOU FIND A
POLITICALLY -- PERHAPS
POLITICALLY FEASIBLE WAY THROUGH
A CARBON TAX, WHICH AS NICK
SAID, HAS A LOT OF SUPPORT FROM
INTERNATIONAL ORGANIZATIONS AND
VARIOUS ELITES SAYING IT'S OKAY
TO IMPLEMENT THE TAX.
THE PUBLIC VOTED FOR THIS
GOVERNMENT ON THE BASIS OF NOT
BRINGING A TAX IN AND THEY HAVE
A TRACK RECORD PROBLEM.
THEY'VE IMPLEMENTED A GREEN
ENERGY PLAN OVER THE LAST TEN
YEARS THAT HAS LED TO MORE THAN
DOUBLING THE COST OF ELECTRICITY
AND HYDRO IN THIS PROVINCE --

Steve says IN FAIRNESS, I'M NOT
SURE YOU CAN LAY ALL THAT AT THE
GROUND OF THE GREEN ENERGY PLAN.
THERE WAS A MASSIVE AMOUNT OF
INFRASTRUCTURE IMPROVEMENT THAT
NEEDED TO BE MADE.

Candice says SURE.

Steve says AND PART OF THAT IS
IN THE PRICE OF ELECTRICITY
THESE DAYS TOO.

The caption changes to "Opportunity knocks, costs."

Candice says SURE.
BUT THEY ALSO HAVE A MESS ON
THEIR HANDS WHEN WE'RE TALKING
ABOUT BRINGING IN SOME OF THESE
SUBSIDIZED GREEN ENERGY -- THE
NEED FOR GAS PLANTS, WE ALL KNOW
WHAT HAPPENED WHEN THEY
CANCELLED THOSE.
I THINK THAT GENERALLY ON THIS
FILE THE GOVERNMENT DOES FACE A
LITTLE BIT OF A CREDIBILITY
ISSUE, AND THEN ON TOP OF THAT,
TO TRY TO IMPOSE A CARBON TAX
AFTER CAMPAIGNING ON THE EXACT
OPPOSITE, I THINK THAT'S
PROBLEMATIC.
I DON'T THINK IT'S FAIR TO THE
PEOPLE OF ONTARIO.

Steve says AGAIN, YOU KNOW,
JUST TO BE REALLY SPECIFIC ABOUT
IT, THEY DIDN'T ACTUALLY PROMISE
NOT TO BRING IN A CARBON TAX,
THEY SAID WE DON'T HAVE PLANS TO
BRING IN A CARBON TAX.
YOU MAY SAY IT'S FUDGING WITH
THE LANGUAGE, BUT THEY DID NOT
SPECIFICALLY SAY THEY WOULD
NEVER DO IT.

Candice says FAIR ENOUGH.
THEY ALSO SAID THEY WERE NOT
GOING TO RAISE TAXES ON THE
MIDDLE CLASS.
A CARBON TAX WOULD BE FELT BY
EVERYBODY, INCLUDING THE MIDDLE CLASS.
WHEN WE TALK ABOUT A REVENUE
NEUTRAL TAX THE WAY THAT THEY DO
WITH BRITISH COLUMBIA'S CARBON
TAX, THAT'S REVENUE NEUTRAL FOR
THE GOVERNMENT.
IT'S NOT NECESSARILY REVENUE
NEUTRAL FOR EVERY TAXPAYER.
CERTAIN GROUPS WILL IN FACT PAY
MORE.
IN BRITISH COLUMBIA, FARMERS ARE
PAYING THOUSANDS AND THOUSANDS
OF DOLLARS MORE --

Steve says IF YOU POLLUTE MORE,
SHOULD YOU PAY MORE?

Candice says THAT'S THE CONCEPT.
YOU'RE GOING TO PUT A PRICE ON
POLLUTING.

Steve says IS THAT FAIR?

Candice says CERTAINLY
NOT WILL PAY MORE.
YOU CAN'T SAY IT'S COMPLETELY
REVENUE NEUTRAL.

Steve says ON EVERY PERSON, SURE.
HELP ME OUT HERE.
WHILE PREMIER WYNNE DID RUN FOR
ELECTION BACK IN 2013, SHE
DIDN'T EXPLICITLY SAY UNDER NO
CIRCUMSTANCES WILL I EVER BRING
IN A CARBON TAX, SHE SAYS IT'S
NOT PART OF THE PLAN.
IT WASN'T PART OF THE PLAN.
SO THAT'S ACCURATE.
CLEARLY SHE WAS NOT EMBRACING
THE IDEA AND SHE CLEARLY IS NOW.
SOME KIND OF PRICE ON CARBON.
WHAT DO YOU THINK CHANGED?

Elisabeth says LET ME
DRAW YOU BACK TO THAT INITIAL
DISTINCTION.
I THINK THERE'S A BIG DIFFERENCE
BETWEEN A TAX AND A PRICE ON
CARBON, AND THE DISCUSSION THAT
YOU'VE BEEN HAVING WITH CANDICE
PRESUMES THAT YOU'RE GOING TO
HAVE A STRAIGHT, PURE TAX.
AND HONESTLY, STEVE, I'VE BEEN
IN THIS BUSINESS FOR A LONG TIME.
I HAVE NEVER SEEN A JURISDICTION
BRING IN A STRAIGHT, PURE CARBON
TAX, EVEN B.C. HAS A CARBON
NEUTRAL GOVERNMENT REGULATION TO
SUPPORT THAT TYPE OF EMISSION
REDUCTION THAT NEEDS TO BE
ACHIEVED AND THE RESULTS WERE
THAT IT WAS REVENUE NEUTRAL AND
IN FACT WITH A TAX SAVINGS BY
THE MOST RECENT ANALYSIS.
SO IN TERMS OF PREMIER WYNNE
COMING FORWARD, SHE DID PROMISE
TO TAKE ACTION ON CLIMATE CHANGE
AND THE ENVIRONMENT, AND LOOKING
AT CARBON PRICING, INCLUDING A
CAP-AND-TRADE SCHEME OR THE
CONTINUUM OF MEASURES THAT YOU
CAN IMPLEMENT TO EFFECT REAL
COST-EFFECTIVE EMISSION
REDUCTIONS I THINK IS EXACTLY
CONSISTENT WITH WHAT SHE'S BEEN
SAYING OVER THE YEARS.

Steve says IN FACT, NICHOLAS,
WE SORT OF DO HAVE A CARBON TAX
IN PLACE ALREADY IN ONTARIO
INSOFAR AS EVERY TIME YOU GO TO
THE PUMPS AND PUT GAS IN YOUR
CAR OR YOUR TRUCK, YOU KNOW,
THERE ARE EXTRA TAXES ON THAT
LITRE OF GAS THAT GO STRAIGHT TO
GOVERNMENT AND IT'S A TAX ON
GAS, IT'S A TAX ON CARBON.
MY QUESTION IS: GIVEN THAT THE
PRICE OF GAS IS SINKING LIKE A
STONE THESE DAYS, DO YOU THINK
THERE IS SOME, YOU KNOW, THERE'S
A WINDOW OR THERE'S SOME
POLITICAL COVER IN THERE FOR A
GOVERNMENT TO ACTUALLY RAISE THE
TAX EVEN HIGHER ON GAS, NAMELY A
TAX ON POLLUTION OR A TAX ON CARBON?

Nicholas says YEAH, I
WOULD SAY TWO THINGS.
FIRST OF ALL, THERE ARE TAXES ON GASOLINE.
THERE'S EXCISE TAXES, BOTH
PROVINCIAL AND FEDERAL LEVEL,
AND THERE'S SALES TAXES.
THOSE DRIVE A WEDGE BETWEEN THE
WHOLESALE PRICE OF GASOLINE AND
THE RETAIL PRICE OF GASOLINE
THAT WE PAY AT THE PUMPS.
HAVING SAID THAT, THOUGH,
THERE'S A LOT OF EVIDENCE THAT
SUGGESTS THAT GASOLINE TAXES, IF
THEY WANT TO REFLECT THE SOCIAL
COSTS OF GASOLINE, THE COSTS OF
AIR POLLUTION, THE COST OF
CONGESTION, THE COST OF
ACCIDENTS -- SHOULD BE HIGHER
THAN THEY ARE TODAY, AND ONE OF
THOSE COSTS, ONE OF THOSE SOCIAL
COSTS IS THE COST OF GREENHOUSE
GAS EMISSIONS.
THE SECOND THING I WOULD SAY IS
THAT, YOU KNOW, LOOKING BACK AT
THE B.C. EXPERIENCE, THERE'S
MAYBE SOMETHING WE COULD GAIN
HERE, SOMETHING WE COULD LEARN
HERE, AS ELISABETH MENTIONED,
THE B.C. TAX IS ACTUALLY REVENUE NEGATIVE.
IN OTHER WORDS, THE AMOUNT OF
REVENUE THAT'S BROUGHT IN FROM
THE CARBON TAX IS MORE THAN
OFFSET BY TAX CUTS AND REBATES
TO HOUSEHOLDS.
PERHAPS TO ALLEVIATE SOME OF
CANDICE'S CONCERNS, SOME OF
THOSE REBATES TO HOUSEHOLDS ARE
ESPECIALLY TARGETED AT GROUPS
THAT OTHERWISE MIGHT HAVE BEEN
LOSERS AS A RESULT OF THIS POLICY.
AND SO THERE WERE REBATES GIVEN
TO HOUSES IN RURAL AND NORTHERN
AREAS OF BRITISH COLUMBIA TO
RECOGNIZE THEIR INCREASED
DEPENDENT ON LONG TRAVEL IN
VEHICLES AND POTENTIALLY
INCREASED HEATING COSTS.
THERE ARE ALSO REBATES GIVEN TO
LOW INCOME HOUSEHOLDS BECAUSE
THEY CONSUME A LOWER PORTION OF
THEIR INCOME IN FUEL.
THOSE KIND OF REBATES THAT
ACCOMPANY THE TAX AND ALSO THE
OTHER TAX MEASURES THAT
ACCOMPANY THE TAX, TRY TO MAKE
THE HOUSEHOLDS THAT ARE
POTENTIALLY AFFECTED BY IT
AGAIN, THEY TRY TO OFFSET SOME
OF THESE CONCERNS ABOUT
DISTRIBUTION IMPACTS OR REVENUE
IMPACTS THAT CANDICE HAS EXPRESSED.

Steve says LET ME GO TO CANDICE WITH THAT.
YOU LIKE TAX CUTS, RIGHT, AS A
PERSON WHO OPINES ON TAX
POLICIES, YOU LIKE TAX CUTS.
IN SOME RESPECTS FAMILIES HAVE
REALIZED A THOUSAND DOLLAR TAX
BREAK THEY DIDN'T EXPECT TO GET
A YEAR AGO.
DO YOU THINK THAT PROVIDES
GOVERNMENT WITH SOME WIGGLE ROOM
TO RAISE THE TAX ON GASOLINE
WHICH IS A KIND OF A TAX ON
POLLUTION OR A TAX ON CARBON?

Candice says I THINK
THEY MIGHT THINK THEY HAVE AN
OPPORTUNITY BECAUSE FOLKS WON'T NOTICE.
GAS PRICES ARE LOW SO THEY HAVE
MORE MONEY IN THEIR POCKET.
THEY MIGHT NOT NOTICE THAT THE
GOVERNMENT IS INCREASING THE TAXES.
BUT WHEN YOU LOOK AT ONTARIO'S
ECONOMIC FORECASTS AND THE
OUTLOOK, THINGS ARE PROJECTED TO
LOOK A LITTLE BIT BETTER BECAUSE
OF THE LOWER DOLLAR, BECAUSE OF
OUR INCREASED MONEY IN OUR
POCKETS FROM LESS GAS, AND I
THINK IF YOU'RE GOING TO IMPOSE
A TAX, YOU GET RID OF THE
OPPORTUNITY FOR ONTARIO'S
ECONOMY TO GROW AND RECOVER.
I DON'T THINK IT'S A GOOD TIME.
WE ALL KNOW THAT EVENTUALLY THE
PRICE OF OIL WILL RECOVER.
THINGS WILL GET MORE EXPENSIVE.
AND THEN AT THAT TIME PEOPLE
WILL REALLY BE SQUEEZED.
THEY'LL HAVE A LOT LESS MONEY IN
THEIR POCKETS --

Steve says AT THAT POINT YOU
COULD LOWER THE TAX ON GAS AT
THAT POINT.
IT GOES UP TO 100 BUCKS A
BARREL, YOU COULD LOWER THE TAX?

Candice says SURE, IF
WE WANT TO BE MICROMANAGING EVERY TURN.
I THINK BRINGING IN THIS KIND OF
A TAX, WE SHOULD BE AWARE THAT
GASOLINE TAXES AS NICHOLAS WAS
MENTIONING WITH THE PROVINCIAL
AND FEDERAL TAX, EXCISE ON TOP
OF THAT, IT'S 30 PERCENT OF WHAT WE PAY.
HOW MUCH MORE REALLY CAN WE
INCREASE IT AND, AGAIN, HOW WILL
THAT AFFECT EVERYTHING, NOT JUST
THE COST OF TRANSPORTATION AND
GASOLINE BUT OTHER THINGS, THE
COST OF HEATING HOMES, THE COST
OF BUYING FOOD, ANYTHING THAT'S
TRANSPORTED -- I THINK THERE'S A
LOT OF EFFECTS THROUGHOUT THE
ECONOMY WE SHOULD CONSIDER.

Steve says I WASN'T WITH YOU
WHEN YOU READ IN THE NEWSPAPER
THAT PRESTON MANNING WAS NOW IN
FAVOUR OF PUTTING A PRICE ON
CARBON, BUT I WISH I WERE
BECAUSE I WOULD HAVE LOVED TO
HAVE SEEN THE STEAM COMING OUT
OF YOUR EARS WHEN YOU READ THAT.
WHAT DID YOU THINK WHEN YOU READ THAT?

Candice says THIS IS AN
IDEA THAT SOME PEOPLE CAN GET
BEHIND, THE IDEA OF PUTTING A
PRICE ON AN EXTERNAL -- I THINK
PRESTON MANNING THINKS IN THEORY
THIS WORKS GREAT.
I DON'T AGREE WITH PRESTON ON
HOW THIS ACTS IN THE REAL WORLD.
WE CAN DESIGN THESE ELOQUENT
THEORIES AND MODELS, YOU KNOW,
IN THE UNIVERSITY SETTING, BUT
WHEN WE IMPLEMENT THEM IN THE
REAL WORLD, THE EFFECTS THEY
HAVE ON EVERYDAY PEOPLE, ON OUR
DAILY LIVES AND ON THE ECONOMY
AS A WHOLE, I DON'T AGREE WITH
PRESTON THAT IT'S A GOOD IDEA TO
IMPLEMENT THIS KIND OF A TAX.

Steve says ELISABETH, WHEN
SOMEBODY LIKE THE FOUNDER OF THE
REFORM PARTY OF CANADA COMES
FORWARD AND SAYS IT'S TIME TO
PUT A PRICE ON CARBON, HOW
SIGNIFICANT DO YOU THINK THAT IS?

Elisabeth says I THINK
IT'S VERY SIGNIFICANT AND EVEN
MORE SIGNIFICANT IS WHEN YOU
HAVE INDUSTRY COMING FORWARD AND
SAYING, PLEASE, PUT A TAX OR A
PRICE, MORE SPECIFICALLY, ON
CARBON, AND DO THAT EITHER
THROUGH A CAP AND TRADE SYSTEM
THAT WORKS FOR OUR SECTOR OR
SOME OTHER MEASURE THAT WORKS
FOR OUR SECTOR.
RIGHT NOW WE HAVE THE TAIL
WAGGING THE DOG IN THE SYSTEM
AND IT'S TIME TO BE RESPONSIVE
TO IT BEFORE WE GET IT IMPOSED
UPON US FROM NEIGHBOURING TRADE
JURISDICTIONS.
AND IN PARTICULAR IN ONTARIO YOU
DON'T NEED TO PRESUME THAT IT
WILL TAKE THE FORM OF A TAX.
CERTAINLY IF YOU TAKE A LOOK AT
THE TOP 3 EMITTING SECTORS IN
THE PROVINCE, WE HAVE
TRANSPORTATION AT ABOUT 34 percent, WE
HAVE INDUSTRY AT ABOUT 30 percent, AND
WE HAVE BUILDINGS AT ABOUT 17 percent.
YOU CAN GET ABOUT 81 percent OF THE
ONTARIO ECONOMY BY A SMART,
FOCUSED SYSTEM THAT IS SOMEWHERE
ALONG THE CONTINUUM OF A TAX IN
CAP AND TRADE AND CERTAINLY
THAT'S WHAT WE SHOULD BE AIMING
FOR: SMART, EFFECTIVE, EFFICIENT
MEASURES TO REDUCE CARBON.

Steve says IF YOU DO ALL THAT
AND IT'S WELL-DESIGNED, WHERE
DOES THE REVENUE THAT COMES IN,
WHERE DOES IT GO?

Elisabeth says CERTAINLY REVENUE NEUTRALITY IS
A VERY IMPORTANT GOAL, IF IT
TAKES THE FORM OF A TAX.
IF IT TAKES THE FORM OF A CAP
AND TRADE SYSTEM, THERE ARE
EMISSIONS AND TRADE -- SYSTEMS
THAT YOU NEED TO LOOK AT IN
TERMS OF REVENUE TO MAKE SURE
WE'RE COMPETITIVE AND NOT
PUTTING CANADIAN INDUSTRY AT A
DISADVANTAGE.
SIMILARLY, ONE OF THE BEAUTIES
OF A CAP AND TRADE SYSTEM IS
YOU'LL NEVER, IN A TAX SYSTEM,
SEE PEOPLE SAYING, “I WANT TO
PAY MORE THAN THE TAX THAT'S
REQUIRED OF ME.”
BUT IN CAP AND TRADE, THERE'S AN
ECONOMIC INCENTIVE TO ACTUALLY
REDUCE EMISSIONS MORE THAN WHAT
IS REQUIRED BECAUSE IT'S
ECONOMICALLY EFFICIENT TO DO SO.
SO YOU SEE THAT REVENUE GOING
BACK INTO THE PROVINCE, INTO THE
SECTOR IN OTHER FORMS.
SO THERE'S A NUMBER OF WAYS THAT
YOU CAN LOOK AT DESIGNING SMART
POLICY TO RECYCLE THE REVENUE IN
A WAY THAT IS ULTIMATELY
BENEFICIAL TO THE TAXPAYER.
AND THAT'S WHAT YOU FOREGO IF WE
AT THIS POINT PUT OUR HEAD IN
THE SAND AND SAY, NO, WE WILL
NOT TAKE ACTION ON CARBON
PRICING IN THE PROVINCE.

Steve says CANDICE, IF IT COULD
BE DEMONSTRATED THAT THE TAX
WERE -- OR WHATEVER IT IS, THE
PRICE ON CARBON COULD BE SMART,
EFFICIENT, WITHOUT ADVERSE
CONSEQUENCES THAT ARE OF CONCERN
TO YOU, THAT IT WAS REVENUE
NEUTRAL, IT WASN'T A TAX GRAB IN
DISGUISE, COULD YOU SUPPORT IT?

Candice says I THINK
THAT WITHIN THAT QUESTION
THERE'S A LOT OF UNCERTAINTY AND
WE CAN'T EVER PROVE THAT THE
SYSTEM WILL BE ABLE TO, YOU
KNOW, SMARTLY NAVIGATE AND READ
THE ECONOMY.
THERE'S ALWAYS GOING TO BE --
ANY GOVERNMENT POLICY, ANYTHING
IS GOING TO HAVE ADVERSE AND
UNINTENDED CONSEQUENCES THAT
WILL AFFECT EVERYBODY.
WE KNOW VERY WELL IN ONTARIO THE
GOVERNMENT IS IN NO FISCAL
POSITION WHATSOEVER TO PROVIDE
ANY KIND OF TAX BREAKS.
THEY HAVE A 12.5 BILLION dollar
DEFICIT, DEBT APPROACHING
300 BILLION dollars.
THIS IS NOT A GOVERNMENT THAT'S
GOING TO BE ABLE TO TURN AROUND
AND HAND OUT MONEY BACK TO
PEOPLE, A GOVERNMENT LOOKING FOR
REVENUE.
SO AS FAR AS THE GOVERNMENT OF
ONTARIO IMPLEMENTING A CARBON
TAX, I WOULD SAY IT'S A TAX
GRAB, IT'S AN OPPORTUNITY FOR
THEM TO HELP FUND THEIR
GOVERNMENT COFFERS, AND, NO, IT
WOULDN'T BE A GOOD POLICY, IT
WOULDN'T BE FAIR FOR THE PEOPLE
OF ONTARIO.

Steve says IN OUR LAST FEW
MINUTES HERE, SINCE I KNOW THAT
EVERY MEMBER OF THE ONTARIO
CABINET, EVERY MEMBER OF THE
CIVIL SERVICE, EVERY MEMBER OF
THE PREMIER'S STAFF WATCHES THIS
PROGRAM, WE'RE GOING TO TAKE
ADVANTAGE OF THAT AND HAVE YOU
ALL OFFER SOME ADVICE.
NICHOLAS, WHAT SHOULD THE
GOVERNMENT OF ONTARIO BRING FORWARD?

Nicholas says I THINK
THE GOVERNMENT SHOULD AIM TO
BRING FORWARD EITHER A CAP AND
TRADE OR A CARBON TAX SYSTEM
THAT'S DESIGNED IN THE MOST
TRANSPARENT AND SIMPLE WAY
POSSIBLE, THAT COVERS ALL THE
SECTORS OF THE ECONOMY, AND THAT
AIMS TO PROMOTE THE
COMPETITIVENESS OF ONTARIO FIRMS
IN SO DOING.

Steve says YOU SAY EITHER-OR.
YOU DON'T HAVE A PREFERENCE AS
TO WHICH --

Nicholas says LIKE WE
OPENED WITH, I THINK BOTH OF
THESE SYSTEMS CAN BE EFFECTIVE
AND THE DEVIL IS IN THE DETAILS,
NOT IN THE SEMANTICS OF CARBON
TRADE --

Steve says DO YOU THINK ONE IS
EASIER TO SELL POLITICALLY
SPEAKING THAN THE OTHER?

Nicholas says IT
CERTAINLY LOOKS LIKE CAP AND
TRADE IS EASIER TO SELL.
PART OF THE REASON IS IT'S LESS
TRANSPARENT.
YOU HAVE A TRADE-OFF BETWEEN THE
TRANSPARENCY OF A CARBON TAX AND
THE KIND OF HIDDEN NATURE OF A
CAP AND TRADE SYSTEM.

Steve says IT MAY BE EASIER TO
SELL BECAUSE I DON'T THINK
ANYBODY UNDERSTANDS REALLY WHAT
IT IS.
ELISABETH DeMARCO, WHAT OUGHT
THE GOVERNMENT OF ONTARIO TO DO?

Elisabeth says I'M
GOING TO EXTEND THE QUESTION TO
WHAT OUGHT THE GOVERNMENT OF
ONTARIO AND THE MEDIA DO IN THIS
INSTANCE, AND I THINK WE NEED TO
STOP FIGHTING ABOUT THE
DISTINCTION ABOUT TAX VERSUS CAP
AND TRADE AND SIMPLY PUT A PRICE
ON CARBON IN A WAY THAT WORKS
EFFECTIVELY AND EFFICIENTLY TO
TARGET THOSE THREE MAIN SOURCES
OF EMISSIONS: TRANSPORTATION,
INDUSTRY, AND BUILDINGS.
AND ONCE WE DO THAT, CALL IT
WHAT YOU WANT, STEVE, WE'LL BE
COMPETITIVE AND WE'LL GIVE OUR
BUSINESSES A LEG UP AND ENHANCE
INNOVATION IN THE PROVINCE.

Steve says I GUESS WE IN THE
MEDIA CAN CALL IT WHATEVER WE
WANT, BUT IT'S ACTUALLY
GOVERNMENT THAT GETS TO DECIDE
WHAT IT'S ACTUALLY GOING TO DO.
YOU DON'T HAVE A PREFERENCE AS
TO WHICH PARTICULAR STYLE THEY
GO FOR?

Elisabeth says I THINK
CERTAINLY IN THE ONTARIO CONTEXT
AT THIS POINT, GIVEN THE THREE
TOP EMITTING SECTORS, IT'S MORE
CONDUCIVE TO THE CAP AND TRADE
END OF THE CONTINUUM, BUT
CERTAINLY THERE MAY BE
COMPLEMENTARY MEASURES THAT LOOK
LIKE A TAX AS WELL.
YOU NEED TO LOOK AT THE WHOLE
PICTURE AND NOT WORRY SO MUCH
ABOUT THE LABELS.

Steve says THIS IS OF COURSE A
MAJORITY GOVERNMENT THAT JUST
GOT ELECTED LAST JUNE, SO
THEY'RE NOT EVEN THROUGH THEIR
FIRST YEAR YET.
AGAIN, LOOKING AT THE POLITICAL
CALENDAR, HOW MUCH TIME DO YOU
THINK THEY'RE ENTITLED BEFORE
THEY BRING SOMETHING FORWARD AND
BEFORE THEY HAVE SOMETHING
PASSED AND INTO LAW?

Elisabeth says CERTAINLY MY EXPERIENCE IN EVERY
JURISDICTION WHERE WE'VE SEEN
CARBON MEASURES IMPLEMENTED IS
TO DO IT QUICKLY.
IT'S LIKE PULLING OFF A
BAND-AID.
ALBERTA TOOK ABOUT 8 MONTHS FROM
THE CONCEPTIZATION OF THE POLICY
TO THE IMPLEMENTATION AND
PASSAGE OF THE LAW.
CERTAINLY Québec MOVED QUICKLY
TO ADHERE TO A LINKAGE WITH CALIFORNIA.
SO I WOULD SAY, CERTAINLY WITHIN
THE NEXT 12 TO 18 MONTHS YOU'D
WANT TO SEE SOMETHING DONE QUITE QUICKLY.

Steve says YOU'RE SAYING WITHIN
12 OR 18 MONTHS YOU COULD HAVE
SOMETHING INTRODUCED AND PASSED?

Elisabeth says I THINK IT'S LIKELY.
I THINK CURRENTLY THE
ENVIRONMENTAL PROTECTION ACT
GIVES THE LEGISLATIVE AUTHORITY
TO PASS REGULATIONS IN ORDER TO
IMPLEMENT SOMETHING OF THAT
NATURE SO THEY COULD TAKE FULL
ADVANTAGE OF THAT AND MOVE QUICKLY.

Steve says OKAY.
CANDICE, LAST WORD TO YOU ON
THIS.
WHAT DO YOU THINK THE GOVERNMENT
OF ONTARIO SHOULD DO?

Candice says TWO THINGS.
THE FIRST IS THE POINT OF A
CARBON TAX OR PRICE IS TO
ARTIFICIALLY INCREASE THE PRICE
AND REDUCE CONSUMPTION.
AT THE SAME TIME, THE GOVERNMENT
OF ONTARIO ALSO SUBSIDIZES THE
PRODUCTION AND THE CREATION OF
AUTOMOBILES AND CARS WHICH GOES
TO PRODUCING FOSSIL FUELS THAT
WE BURN WHEN WE DRIVE THOSE CARS.
SO IF THE GOVERNMENT REALLY
WANTS TO HAVE A BROAD STRATEGY
OF REDUCING CARBON EMISSIONS
THEY SHOULD STOP BY ENDING
SUBSIDIES TO THE AUTOMOBILE
MANUFACTURING INDUSTRY AND
CORPORATE WELFARE.
MY SECOND POINT --

Steve says OR SUBSIDIZE BATTERY
POWERED CARS.

Candice says SURE.
OR LET THOSE INNOVATE ON THEIR OWN.
THE OTHER POINT IS PREMIER WYNNE
MADE A PROMISE, A PLEDGE TO THE
PEOPLE OF ONTARIO.
SHE TOLD US IT WAS NOT PART OF
HER PLAN TO BRING IN A CARBON
TAX AND I THINK THE PREMIER
SHOULD FOLLOW HER WORD AND NOT
IMPOSE NEW TAXES ON THE PEOPLE
OF ONTARIO.

The caption changes to "Theagenda.tvo.org"

Steve says UNDERSTOOD.
MY THANKS TO ALL THREE OF YOU
FOR COMING IN AND SHARING YOUR
VIEWS ON THIS ISSUE TODAY.
ELISABETH DeMARCO AND NICHOLAS
RIVERS IN OTTAWA, CANDICE
MALCOLM HERE IN TORONTO.
THANKS SO MUCH, EVERYBODY.

Watch: Carbon Pricing for Ontario?