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Carbon Tax in Canada


CarbonTax in Canada

CarbonTax in Canada

Canadais one country known to be very cautious about their environmentalaffairs due to its rich biodiversity. In 2012, Canada accounted fora percentage of 2% of the world’s greenhouse gasses emission thisproportion is very high given that there are more than 196 countriesin the world today. The statistic suggested that Canada lives inthreat of effects of greenhouse gasses. In the quest to save theCanadian environment from dangers of pollution such as climate changeand greenhouse effects, some of the Canadian provinces imposedpolicies on environmental conservation which included the carbon tax.The first province in Canada to adopt the use of carbon tax as a wayof controlling carbon emission to its environment was Quebec, in 2007(Center, 2010). The national government is looking forward toenforcing carbon tax in 2018 hence putting into consideration twoaspects of carbon taxes energy taxes along with emission taxes(Harrison, 2012). Enforcement of carbon tax is a legislativecollaboration between the taxes and environmentalist (McKercher, etal., 2010). The paper will expound on the reasons as to why Canadashould support or not this move and the benefits the country willaccrue by supporting the policy alongside thedownsideof the plan.

TheCost of Carbon Tax

Thequestion whether to support these measures or not has always remainedfascinating. Itischarming because despite the revenue got from the tax which is forthe developmentof the country, the taxpayers and big industries who pay these leviescomplain. Also, as these groups protests, they fail to consider theglobal and visible effects of carbon emission in their life and inthe environment they live.More so, the local citizens have argued that the carbon tax whichcurrently stands at $ 10 per ton was a purely a politicalcalculation. The final interesting aspect ofthis question is that Canada does not have its sky, pollution in theneighboring provinces are equally likely to affect its atmosphere. Asa result, it callsfor nationalization of the carbon tax.

Variousparameters shouldbeanalyzedbefore making the final decision on whether to back up carbon fiscalpolicy or not. In this context,two core consideration or issues must begiven prioritybefore supporting a carbontax to the entire Canada. These problemsarethe cost related to promotion and the nature of climate and theatmosphere.

Contrary,there are various benefits that Canadian provinces using the carbontax policy have accrued since adopting the policy. One of theseadvantages is reduced environmental pollution due to the adoption ofproper environmental friendly methods of production in theirindustries. Apart from reduced pollution from industries, thegovernment has also put in place various measures so that productionof petroleum products and their pipingis in theenvironmentallyfriendly manner that cannot violate the ecosystem conservationpolicies implementedby differentprovinces.

Thecitizens also, on the other hand, have adopted safedomestic means of living such as the use of fossil fuel gas insteadof burning charcoal and firewood in cooking with the aim ofpreventing or lowering the charges of the carbon tax. The job markethas also been on alert to create clean jobs and biologically friendlyservices all because of the policies put in place to conserve thenature by these Canadian provinces. When these benefits getarticulated, then it will be found out that there is a significantsavingforthe future generation (Harrison, 2012).

Thepolicy will also make Canada free to trade with all countries whichhave discriminatory policies and be a participant in partnership inaddressing the climate change. Henceit willimprove Canada’s international image on climate and environmentglobally and also attract clean investors to invest in Canada. These,however,come with questions how many countries in the world have thesediscriminative climate policies? What products do these countrieshave as export for exchange with Canada? In as much as thesecountries will be trading with Canada on clean items does not implythat they use clean methods of production to produce their products.The large companies might be using the traditional methods which arereferred to as dirty but paying the carbon taxes this can similarlybe the case in Canada. It meansthat carbon tax is not only intended to reduce environmentalpollution, but it has other malicious motives which may only be knownonce it is nationalized (Hsu, 2012).

Apartfrom the introduction of the carbon tax as a policy to reducegreenhouse gasses coming with significant saving, it has thedownside.The firsteffect of introducing this systemis that it increases the cost of living for the ordinary Canadiancitizens. It doesnot only affect those living in provinces which have this law workingalready but also affects the entire country. Imposing carbon tax toproduction companies implies a rise inthe cost of that company’s products. If these products include thebasic human needs like food, shelter,and clothing, this additional cost will spreadto the other poor citizens.

Thefactor that willchange and affect those who come from humble backgrounds isthe increase in transportation cost. Most automobiles in Canadaeither personal or public use the fossil fuel. The fossil fuel is theprimary source of these greenhouse gasses. Itmeansthat both the rich who own privatevehicles and the poor who use public means, on the other hand, willhave to incur additional costs of transportation as a result of thecarbon tax. An ordinary citizen living in a province that the policyis yet to be adopted will disagree on its promotion.

TheCEO of Birchcliff Energy by the name Jeffrey Tonkensuggests that Canada should rethink about the carbon tax policy. Heexplains that introduction of this tax will make Canada uncompetitivein the global market. The tax as seen earlier will lead to anincrease of commodities from Canada including petroleum which hasbeen its primaryexport and foreign exchange earner. Jeffrey Tonkensays that with the election of Donald Trump as the president ofAmerica who had earlier suggested that he would withdraw the UnitedStates of America from the Paris climate agreement, they are morethreatened. Since the US, which Canada considers as its biggestpartner in trade is taking a different direction, they will soon losetheir grip in the market. According to this businessman, theintroduction of the carbon tax as a national policy will not beright.

Also,it will be difficult for the country to import machinery due to thecarbon tax. Itwillcometo a juncture inthe export commerce where Canada’s machinery will notbee afforded bypoor third world countries that do not have the carbon fiscalpolicy in practice like the sub-Saharan countries (BNN, 2016).

Asfar as implementation of this policy isconcerned, the other effect will be thecarbon price rating. How will the government ensure that citizens payas per their amount of emission? In areas such as urban centers andindustrial zones, there is a likelihood that there are higher ratesof carbon emission than in the remote residential centers. Whichtechnology will the government adopt to make sure that there isequality? The current rates stand at $10 per ton in the provinceswhere this policy isalready working,but this isperceived poorly bythe citizens of the territories(Gore, 2010).

Beingthat this issue of carbon tax contains politics in it some citizenshave not observed it well. Politicians have always been known tooppress the ordinary people and also driven by self-interests. Themost recent scenario where the prime minister of Canada wrote an openlater to Australian prime minister congratulating him on success ineliminating carbon tax is Australia remains sarcastic to Australiancitizens.

Incomethat will not be accounted for as a result ofsmall volumes of exports from Canada will likely to weaken itseconomy. There is also a likelihood that Canada will suffer frominflation and their currency loses public value due to high prices oftheir products locally. The economy of Canada may be affected as seenin Australia according to Meng, Siriwardana, &amp McNeill (2013).

Natureof Climate and the Atmosphere

Theviewof climate has made it clear that climate change isnot only as a result of greenhousegasses. Some of the causes of climate change that are independent ofgreenhouse effects include hydraulic cycle, nature of oceans and seacurrents, the intensity of sunlight reaching the earth’s system andrate of reflectivity. Itmeansthat even if Canada promote carbon tax policy as means of making theclimate stable, there will not be a significant effect.

TheCanadian sky isnot onlyin Canada. Itmeansthat even the air in Canada is shared even by the neighbor. Theimplementingcarbon tax will, therefore, need to promote even in the neighborhood.And also, being that the nearest neighbor of Canada is America whichwill soon withdraw from the global climate agreement with its highnature, carbon tax success will not be of any significant in Canada.

Whatif the citizens and the industries decide to accept the policy andagree to pay the tax, but the pollution continue? Will there beanother environmental conservation policy to be developed if thishappens? The sole aim of the carbon tax is to reduce the amount ofgreenhouse gasses which have several effects to Canadian province’sflora and fauna. The policy, however, does not explain what willhappen if people accept the charge but continue with the pollutionactivities.

Concerningthe acceptance of the policy, most people have questioned howdifferently the government will consider private sectors and thepublic sectors. Will both sectors have the same rates? How will thegovernment obtain carbon taxes from non-profit public areas? If thegovernment fails to collect tax from these non-profit public sectorsand industries, how will they show equality? Also, unlike largeemitters whose emissions easily be quantified, how the governmentquantifies the amount of discharge from emission-intensive smallbusinesses?

Theabove questions have failed to be answered efficiently by differentstakeholders fostering the carbon tax agenda. Failure to answer theabove questions has clearly indicated that the Canadian government isnot in a position to nationalize the carbon fiscalpolicy. These carbon taxes policies have just been put in place tomeet the Paris Agreement blindly without analyzing its implicationsto the Canadian citizens and current trade partners.

Toanswer the above questions. However,the Canadian government may do the following (Courchene, &amp Allan,2008):

  1. Provide incentives to different sectors of the economy for reducing the rate of carbon emission since these industries produce different amounts.

  2. The government should integrate the carbon tax policy with another existing system so that the cost becomes aggregated.

  3. Use of technological leader to help in making compatible devices which can be used to quantify carbon emission irrespective of their quantities.

  4. The government should leave the tax formulation activities to be done by economic sectors without political interference. Since the politicians have failed to convince citizens with their reasoning on this issue.

  5. There should be an increase in investment in renewable sources of energy. Renewable sources of energy have relatively low rates of carbon emission.

Politics,Climate nature,and costs related to the carbon tax are the primarychallenges the Canadian government will be able to face whileimplementing carbon tax nationally. As a liberal and someone whounderstands the importance of conserving environment, I would agreethat the Canada publiclyadopt the carbon tax. The benefits of this step will bein summarybelow:

Thisactionwill promote innovation

Theindustrial sector will have to find means of improving theirtechnology so that they can be pollution free in a bidtoabide by the legislations. Improving technology will only beexpensive in the development stages, but its benefits will be ofbenefit through the life that company as products will be relativelycheaper compared to when using old technology and ever paying carbontaxes.

Carbontaxes are simple to design

Withthe use of economic sectors in formulating carbon taxes, it proves tobe a very simple task on paper. The other way of making this designeven easier will be to text fuels as per the volumes of the carbonthey emit. The design is already in practice and can only beimproved. Themove mightnot change the situation, however, but the government will providethe standard to the fuel producers to make their products carbon free(Metcalf, &ampWeisbach, 2009).

Maycreate a good international image for Canada.

Environmentalconservation awareness is one virtue which must be significant to aliberal. Theimposingcarbon tax is likely to awaken the global community on environmentalpreservationand its benefits. Investors who believe in clean energy andtechnology are likely to be attracted to Canada, and this may improvethe economy in a way (Babiker, &amp Rutherford, 2005).

Improvementof the agriculture sector.

Ina case where the objective of introducing national carbon tax issatisfiedsignificant reduction of greenhouse gasses, there is the likelihoodthat the frequent climate change known with hotness will not beconstant. The resultant rainy weatherwill favor agricultural and aquatic performance. Improvement of theabove is likely to check food insecurity if it was beckoning and alsoincrease the export varieties.

Improvementof other sectors using the tax.

Therevenue received from carbon taxation can be helpful in improvingother economy sectors that are behind. For example, the tax can beuseful fordevelopingthe technologies used in the mining industry.Do not forget that Canada is the fourth leading country in the worldin oil export. Other areassuch as the military, education, technology and global awareness aresome of the areas which the Canadian government may wish to improve.

Improvementof goods and services produced.

Despiteslightly high pricing, productsmanufactured in Canadawith the use of clean and improved technology will be of moretopquality. The additional cost will be enjoyed the citizens as therevenue from the taxes will be used to purchase technologies fortheir service in public sectors.

Thegraph shown below is a statistics extracted from liberal districts’elections on opinion on the carbon tax in 2012 (Joel Wood, 2016).


Fromthe graph, it is evidentthat perception of the carbon tax is well by the citizens and thisgives a reason for its promotion.


Fromthe discussions above, it is clear that implementation of carbon taxnationally is a good idea. However, the level of preparedness ofCanada towards implementation of this policy isstill questionable.I would suggest that the government should promote the nationalcarbon tax due to the benefits it has.Some of the advantages I have discussed in this essay include:improving the quality of goods and services with the use of cleantechnologies, improvement of other sectors of the economy likeeducation sector with the use of carbon tax revenue and creation of agood international image due to awareness of environmentconservation. Anotherbenefit that carbon tax will bring to Canada is improved investmentin innovation to produce clean machinery and also the purenature of formulating this tax is an advantage.

Apartfrom the benefits that Canada will get the nationalizingcarbon tax, some issues are less significant than the benefits. Theeffectsmay include lack of proper legislation and political interferencewhile promoting carbon tax, the issue of the non-profit publicsectors that will cause pollution like other private sectors and therise in the cost of living in Canada. These problems, however, aretime variant, and since the introduction of the carbon tax as thesocialtool to prevent pollution is still in infant stages, the governmentwill soon resolve them to the expectation of the citizens.

Tomake the carbon tax a success in sorting climate changes, Canada hasto collaborate with the neighboring countries so that they can adoptthe same too. Theissue isbecause the sky and the atmosphere arein useuniversally. It will also not appeal for Canada to impose trade bansto the countries that have not adopted clean technology. Theaspect isbecause Canada is not self-dependent and in as much as it will bepracticing the use of clean technology, someproducts arenaturally clean that they might import from these countries. Theexample of these commodities is plants and animal products. MostCanada provinces have adopted this policy,and they have been successful, what will now prevent the country as awhole to take it too?

Finally,other means to reduce quantities of greenhouse gasses apart fromcarbon tax include the adoption of public means of transportationrather that personal means, investing in green infrastructure,planting trees and reduction revenue. If income taxes are reduced andsubstituted by the carbon tax, there will be a balance (Hsu, 2012).

Thecarbon tax is a wise idea, andthe policy should be introduced as a national policy come 2018,hoping that every person living in Canada would appreciate once itbecomes a national policy.


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