Carbon tax is a hit to business competitiveness

Contrary to Justin Trudeau’s claim of just a few years ago, budgets don’t actually balance themselves: revenues have to equal expenditures for that to happen.  Given that, it is not surprising that after running up an enormous deficit in less than four years the Trudeau Government is looking to put its hands in our pockets with the Carbon Tax. Though presented as revenue neutral, the reality will be handouts to some and hidden risen costs for all.

Of particular note will be the hit to business competitiveness. Or at least the competitiveness of some businesses: one wonders how many large corporations have exemptions of one kind or another.  Why do we say that? Well why else would a group like the Business Council of Canada – made up of some of Canada’s largest corporations – repeatedly make clear their support for carbon taxes? And why do various trade associations feel compelled to do the same thing?

How many people realize that there are industry groups out there declaring their support for carbon taxes, and then working out special exceptions because they are “energy-intensive industries” who compete in international markets with players who don’t pay carbon taxes.  So in other words, they say “we’re for carbon taxes but we don’t want to pay them”.

Any hypocrisy there?

So who will pay them? Well this is the ongoing trick with the carbon tax – it is hard to tell. But let me tell you that we know small to medium sized businesses will be hit hard. This tax is going to be devastating to the competitiveness of these companies – and that is really, really bad for Canada. If I belonged to any association that supported a carbon tax I would resign my membership immediately, full stop.

Large companies need to remember that while they are negotiating exemptions they are throwing small to medium businesses under the bus: they are decimating their supply chains, killing the entrepreneurialism that ultimately provides talent to them, and hurting the innovation that flourishes in small enterprises – innovation from which they eventually benefit.

Carbon taxes are not revenue neutral – the BC case shows that. They do not change behavior –European case studies show that. They do not have an impact on emissions – all kinds of cases prove that. What they do is drive up costs, subsidize ineffective alternatives, and give government another pool of money to pay for their pet projects.

The time has come for Canadian business to come together, to realize government is trying to divide and conquer us to advance their interests, and to realize our trade associations do us no favours by bowing before government to get access instead of calling them out when their actions are against our interests.

About the Author

Jocelyn Bamford is the president and founder of the Coalition of Concerned Manufacturers and Businesses of Canada.