An important debate is underway in Saskatchewan about the tools to use to combat the accelerating impacts of climate change. Significant tax reductions should be part of the plan.
With more frequent, more severe and more damaging cycles of droughts and wildfires, storms and floods — which extract a heavy toll in Saskatchewan — it’s clear that a more volatile climate imposes costly risks and that man-made air pollution (from carbon emissions and other sources) is a big part of the problem.
Virtually everyone agrees that we need to prevent the worst climate change consequences as much as possible, and find ways to adapt to what we won’t be able to avoid. The debate is about how best to do that. A revenue-neutral approach like British Columbia has taken would enable the Saskatchewan government to safeguard this province’s competitiveness while cutting both property and income taxes.
Climate change is a tough, global problem. But we can’t just wish it away. It’s real and has to be dealt with. If solutions were easy, they would have been implemented long ago. People of goodwill hold strong and differing opinions about what to do. To be productive and find the best way forward, the discussion needs to stay factual and respectful.
As shown in Saskatchewan’s recent “White Paper on Climate Change”, there’s a lot of common ground among all levels of government about the investments needed in new technology and adaptation. The Government of Canada has undertaken to help with these. But differences persist around “carbon pricing” — that is, putting a price on the pollution that lies at the source of the problem.
It’s an odd thing about our society that we charge heavily for good things like fresh water, but there’s almost no charge at all on damaging things like air pollution. A price on pollution would provide an incentive to slow carbon emissions and stimulate technological innovation. Moreover, as other nations adopt carbon pricing to meet their emission reduction targets, more economic opportunities will be created for Saskatchewan.
A price on pollution would, for example, strengthen and expand markets for Saskatchewan’s important “carbon capture and storage” (CCS) technology. Not only can CCS help remove significant volumes of carbon coming from local coal-fired power plants, it can also be sold globally to countries like China and India. But it’s expensive, and the economics aren’t sufficiently attractive if pollution is essentially “free”.
Pricing carbon also strengthens Saskatchewan’s credentials to advocate for greater pipeline capacity to transport our valuable natural resources. It would also generate new revenue for the provincial government.
The idea has been discussed for years. It was explicitly promised during last year’s election, in the Throne Speech last November, at the United Nations Climate Change Conference last December in Paris, and at meetings of Canada’s First Ministers earlier this year in Vancouver.
Support crosses party lines and jurisdictions.
One version of carbon pricing was first implemented 10 years ago by a right-of-centre provincial government in British Columbia. That government is still in office today, and that province has the strongest economy in the country with the best record for slowing carbon emissions.
Different but essentially equivalent pricing approaches have been adopted in Alberta, Ontario and Quebec.
The principle has been described by Reform Party founder, Preston Manning, as “a good idea” which he “wholeheartedly support(s)”. It is also endorsed by a new conservative advocacy group called “Clean Prosperity” led by Mark Cameron, a former senior policy advisor to Stephen Harper.
The Conservative Opposition leader in Ontario says he supports carbon pricing. So does the new Conservative Premier of Manitoba.
In the private sector, the business executives who lead Canada’s major petroleum and mining companies endorse the concept. So do insurance companies and financial institutions, because they see big losses accruing from the damages caused by climate change. The Canadian Chamber of Commerce has long been an advocate for putting a price on pollution. So are many municipalities because of the serious risks to their infrastructure.
Here are some of the core elements of a national pollution pricing plan:
- It’s needed because investments in technology and adaptation alone will not solve the problem.
- The whole country needs to participate, but provinces will be able to devise their own systems provided they meet the national standard.
- Farm fuels and other provincial sensitivities can be exempted from pollution pricing. The goal is to cover some 70% of harmful emissions. That leaves room for flexibility.
- All the revenue raised from pollution pricing in any given province will remain entirely in that province and totally under provincial control.
- The Saskatchewan government is estimating it would gain some $2.5 billion annually, and it alone will decide how to use that money.
- With that revenue, Saskatchewan could totally eliminate its provincial personal income tax.
- Or it could offset the property tax burden on homes, farmland and small businesses.
- Or it could take a big chunk off both income taxes and property taxes, but still have room to invest more in low income families, healthcare, universities and municipal infrastructure.
- Whatever the mix of benefits, Saskatchewan would determine its own priorities – to be fair and competitive, and to generate jobs, growth, investment and innovation.
In addition — quite apart from the province’s revenue from pollution pricing — the Government of Canada will be making substantial new investments in Saskatchewan to help drive greater growth.
This could include major science and technology projects like CCS, crop production and others. It could help build smart power grids to link large emitters to hydro power with no emissions at all. It could invest in large-scale water conservation and development projects to better manage damaging flows from storms and floods, while expanding the province’s economic base through irrigation, more diversified agriculture, and in other fields like tourism and recreation.
All of this enhances the economic and environmental credibility we need to get our vital natural resources to market.
The bottom line is a more prosperous, diversified, cleaner and successful Saskatchewan.