Federal carbon tax comes to 4 provinces amid barrage of 'myths and misinformation'

In the political battle over carbon taxes, New Brunswick's Progressive Conservatives have a twin-pronged attack: a taxpayer-funded government marketing campaign, combined with the environment minister's folksy way of bringing the issue down to the human level.

Jeff Carr recently told reporters about a senior citizen living on a fixed income in his sprawling, mostly rural riding of New Maryland-Sunbury.

"She right now cannot afford her power bill," Carr he said. "She cannot afford to pay her taxes in full."

Add the federal carbon tax to her home heating fuel, and to the gas she needs to drive to Fredericton, and "she is not going to be able to survive for another year," said the minister.

If the woman in question has to "drive to Fredericton twice a week, let's say," for appointments with medical appointments, Carr said, then that demolishes Ottawa's argument that a carbon tax is needed to deter the consumption of fossil fuels.

"The federal government is telling her, 'we're going to charge you more so you drive less.' So what does she do? Stay home and suffer? That's unfair."

Carr says the federal rebate she will receive, $140, won't be enough to offset what she spends.

But supporters of carbon pricing say Carr's example is misleading.

"The rebates will more than offset those costs for the large majority of New Brunswickers, including low-income," says Brendan Frank, an analyst with Canada's Ecofiscal Commission, a pro-carbon tax research institute.

Even so, Frank says such criticisms are effective: the relentless barrage from anti-carbon-tax cabinet ministers in several provinces is affecting public perceptions.

"I think we're losing sight of the goal, to a large extent," he said.

Economists, including last year's Nobel Prize winners, are virtually unanimous that carbon pricing is the least costly and most efficient way to deter fossil-fuel consumption, Frank said.

But "that's getting swamped, I think, by the ground-level issues. … That conversation is unfortunately being overtaken by a lot of myths and misinformation."

The most visible part of the carbon tax is 4.4 cents per litre added to the price of gas starting Monday. Home heating fuels and other fossil fuels are also included.

The commission calculates that the federal carbon tax will cost the average New Brunswick household $200 per year, an amount more than offset by the $248 rebate. For individuals living alone, the rebate is $128. In both cases, it's 10 per cent higher in rural areas.

To pay more in carbon taxes than the value of the rebate, the average New Brunswicker would have to burn more than 5,600 litres of gas a year, he said. 

Ironically, the feature that makes the carbon tax effective as a deterrent to burning fossil fuels — its high visibility — also makes it an easy target for its opponents, Frank said.

And those attacks are working, according to polling released last week by Abacus Data.

The poll was taken March 11-13, more than two weeks before Ottawa imposed its backstop on the four provinces that didn't develop adequate plans of their own: Ontario, Manitoba, Saskatchewan and New Brunswick.

Yet a majority of residents of those four provinces mistakenly believed it was already costing them more money, "even before they've had to pay a cent more for gas," said David Coletto, the CEO of Abacus.  "It's a reflection of the power of political rhetoric."

In the four backstop provinces, 44 percent of respondents said the carbon tax had increased their cost of living a small amount, and 37 percent said it had increased a lot.

Similar percentages — 47 percent and 33 percent, respectively — wrongly believed the tax was already costing them more when they bought gasoline.

"It makes sense to some degree," Coletto said, "because we've had opponents of the carbon price telling us that it will, since the day that the idea was announced." 

The perception creates powerful headwinds for organizations like the Ecofiscal Commission who say a higher price on greenhouse gases is the best way to deter their consumption. 

Frank says the numbers speak for themselves: in British Columbia, the first province to adopt its own homegrown carbon tax, there was a decline in gasoline consumption and natural gas consumption.

Even dramatic spikes in pump prices unrelated to carbon taxes in recent years have hurt sales of gas-guzzling SUVs and pick-ups while boosting demand for hybrid cars.

This is how the carbon tax will affect the New Brunswick economy — including you

6 years ago

Duration 2:23

Starting today, you'll have to pay more whenever you buy a fossil fuel in New Brunswick. This is how the carbon tax will affect you and the provincial economy.

As the commission points out, a New Brunswicker who reduces his or her consumption will pay less carbon tax while still getting the rebate, creating an even bigger net benefit.

The commission says alternatives, such as emissions regulations or subsidies, like those in Quebec for electric cars, are more expensive.

But those dry, technical arguments fall flat next to anecdotes like Carr's, particularly when he's backed by a taxpayer-funded marketing campaign carrying the supposed authority of official government communications.

"There's a credibility to having the province's logo as opposed to a political logo appended to something," Coletto said.

At the same time, New Brunswick's Liberal opposition finds it awkward to criticize the PCs, given the failure of their own climate plan that led Ottawa to impose its backstop here.

The Liberals announced in December 2016 that their "price" would shift existing gas-tax revenue into a special climate account, with no net increase for consumers.

For almost two years they insisted that met federal criteria — even though Ottawa clearly said provincial plans had to to raise the cost of carbon. 

During last year's election, Gallant suddenly acknowledged his plan might be rejected and declared he'd "fight" the federal backstop. Ottawa vetoed the plan in October. 

Now in opposition, the Liberals criticize the PC government for collecting HST on the carbon tax but avoid discussing how they might have done things differently.

"We had a plan," Liberal MLA Roger Melanson said last week. "And we respected — we announced what we were going to do." Then he pivoted to criticizing the Tories for not having a meaningful plan of their own.

The provinces surrounding New Brunswick — Nova Scotia, Prince Edward Island and Quebec — all came up with alternative provincial plans or special offset deals with Ottawa and all of them avoided this week's 4.4-cent-per-litre hike. 

Where the issue goes from here depends on the federal election coming in October. Conservative leader Andrew Scheer visited New Brunswick Monday and promised to eliminate the federal backstop but hasn't said what he'd do to lower emissions.

Abacus's polling suggests concern about climate change breaks down along party lines. Coletto says while the federal Liberals don't want the election to be about carbon taxes, they may hope it centres on the broader climate issue.

"What we're likely leading to is you're going to see increased division … with climate change being a values issue," he said. "If you care about acting on climate change, you have to be in favour of [carbon taxes]. 

"This is just going to drive this issue beyond 'is this a good policy or not' to a higher level. Are you committed to dealing with climate change or not? That's why we wonder if it's going to become a ballot issue beyond just the price."