Cap and trade just a carbon tax – The liberal promised not to raise taxes on the middle class, looks like they lied once again.
What does Climate Change Minister Glen Murray’s announcement Monday that Ontario sold out its first cap-and-trade auction of carbon credits mean to you?
It means Ontario businesses have just paid a new charge of $472 million to the Wynne government in a government-run quarterly auction of carbon permits to industry, through which the government hopes to raise $1.9 billion annually in new revenue.
That $1.9 billion annually will be paid for by all Ontarians, in the form of higher retail prices for most goods and services.
Simply put, Premier Kathleen Wynne has imposed a new $1.9 billion annual tax on all Ontarians.
That’s because cap and trade is a carbon tax by another name.
The only difference is cap and trade raises the retail prices of goods and services, while a carbon tax raises the taxes on them.
Either way, there is no free lunch.
As of Jan. 1, the Wynne government imposed a new charge on Ontario businesses they have never had to pay before — the cost of emitting greenhouse gases when they burn fossil fuels (oil, coal, natural gas) for energy.
Given that virtually all goods and services consume fossil fuel energy, someone has to pay this new charge.
That will be us, as businesses pass along their new cost to consumers.
It’s unsurprising the government sold out its allotment of carbon permits in its first auction — each allows the bearer to emit one tonne of industrial carbon dioxide or its equivalent — at its set price of $18.07 per permit.
That’s because cap and trade is essentially a stock market trading in emissions and in this first auction on March 22, the Ontario government made up and controlled all the rules.
It won’t next year when Ontario joins the highly speculative California/Quebec cap-and-trade market, where the price of carbon credits has crashed in three of the last four quarterly auctions.
Ontario Auditor General Bonnie Lysyk has expressed major reservations about Ontario joining the California/Quebec market, noting it could result in Ontario businesses spending hundreds of millions of dollars annually buying carbon credits in California, without lowering emissions in Ontario.
That’s because there has been no protocol developed for how these so-called emission reductions will be recorded.
Lysyk said this could result in Ontario and California double-counting the same claimed emission reductions.
Wynne’s government is giving away free carbon permits to 102 major Ontario emitters for at least four years — essentially free money paid for by all Ontario taxpayers.
This to encourage them to stay in Ontario, instead of leaving for countries that don’t have a national carbon price, such as the U.S., our largest trading partner.
In other words, after imposing a new cost on our industries that their American competitors don’t face, the government is now giving them more of our money not to move to the U.S.
The government says it will invest cap-and-trade profits in lowering emissions and helping Ontarians cope with the increased cost of living cap and trade imposes on us.
But if the government’s projections of its profits are overly optimistic, then it will have to raise taxes if it wants to pay for its climate change plan.
Either way, we’re all going to pay.
Toronto Sun by Lorrie Goldstein
April 4th 2017