Canadians can’t afford a carbon tax hike.
April Fools’ is supposed to be a day of jokes.
But the biggest joke being played that day won’t be much of a laughing matter.
On April 1, 2022, the carbon tax is set to rise from $40 a tonne to $50 a tonne.
The increase will take place amid surging inflation.
The inflation rate has reached 5.7%, the highest level since 1991:
“Canadian consumer price inflation jumped to a new three-decade high in February, cementing expectations the Bank of Canada will aggressively hike interest rates in coming months to rein in price pressures.
Annual inflation was 5.7 per cent last month, up from 5.1 per cent in January, Statistics Canada reported Wednesday in Ottawa. That’s the highest since August 1991 and exceeds the median estimate of 5.5 per cent in a Bloomberg survey of economists.
The average of the central bank’s core measures — often seen as a better indicator of underlying price pressures — rose to 3.47 per cent, also the highest since 1991.”
A closer look at the numbers reveals even more concerning details.
Gas prices are up a whopping 32.3% year-over-year.
The price of groceries are up 7.4%.
And shelter costs have surged 6.6%, the highest recorded yearly increase since 1983.
Calm before the storm?
As we are seeing, these are price increases that are approaching the highest levels in recent history.
Amazingly however, this may be the relative calm before the storm.
With Russia attacking Ukraine, grain exports will be impacted, driving up food prices.
Fertilizer exports from the region will also be impacted, which will have yet more impact on food costs.
Sanctions and export restrictions will lead to higher prices for oil & gas.
All of this will be on top of already-high inflation.
Of course, wages aren’t keeping up with the rising cost-of-living, which means most people are falling further and further behind.
Do no harm
In the face of this cost-of-living crisis, the first goal of the government should be to at least do no harm.
Before trying to improve or fix a situation, it is imperative to ensure that you aren’t making that situation worse.
Unfortunately, the Liberal government hasn’t taken that common-sense wisdom into account, and continues to pursue an agenda that will make life even more expensive.
Putting ideology ahead of people
In ‘good times,’ when the world is largely stable and peaceful, the consequences of pursuing an ideological course of action are limited.
When underlying economic and national security fundamentals are strong, governments can be lead by unserious people and pursue unserious agendas without much damage occurring.
But we don’t live in stable or peaceful times.
Our underlying economic and national security fundamentals are anything but strong.
And that means we cannot afford the consequences of an ideological approach to governance.
At this moment, the logical thing for the Liberal government to do would be to admit that Canadians can’t afford another carbon tax increase, and acknowledge that the pursuit of green energy at the expense of the oil & gas sector has driven up the cost-of-living while increasing our dependence on nations like Russia and Saudi Arabia.
That dependence not only hurts our country, but it also puts our allies in a more difficult situation, in addition to enriching nations that don’t share our values.
Doubling down
Given that the carbon tax is directly an inflationary policy in that it is designed explicitly to raise prices and change behavior, reducing it would help reduce inflation.
The head of the Bank of Canada has admitted that the carbon tax increased the inflation rate by 0.4%.
While that may not seem like much to politicians who are getting a big pay raise soon, 0.4% means a lot to the many Canadians who are already on the edge of being unable to make ends meet.
Rather than just cancelling the impending carbon tax increase, the entire carbon tax should be scrapped.
Canada, and the Canadian People, simply cannot afford it.
Not only would scrapping the carbon tax be beneficial for Canadians by lowering the cost-of-living, it would also send a positive signal to potential investors in the energy sector, at a time when Canada – largely due to our enviable location on the planet – is seen as a safe haven.
There is a lot of potential money in the world looking to move away from Russia and towards a better investment environment, and Canada could be the destination for much of that money, which would create jobs, raise wages, and make life more affordable by making our country richer.
We shouldn’t even have to say all of this, since encouraging investment, making life more affordable, being energy independent, and seeking to enrich are country should be the baseline we expect from the government.
Alas, that isn’t the case.
A moment for unity
Canada has become more and more divided in recent years. Responsibility for that exists across the political spectrum, and among many Canadians – myself included.
Justin Trudeau also bears much of the responsibility, as the tone set by the PM filters out through society. Trudeau was willing to divide and demonize Canadians for political advantage, and then invoke Emergency powers that set a dangerous precedent and further divided the country.
To step back from such a divisive time requires humility from everyone, and that includes the government.
The stakes in the world are simply too high for our country to remain as divided as it is.
If Trudeau and the Liberals were willing to admit that now is not the time for a ‘green energy’ agenda, and were willing to repeal the carbon tax and support the energy sector, many Canadians would stand with them.
Additionally, removing the travel restrictions on unvaccinated Canadians would send a message that the government is finally done trying to use vaccination status as a political wedge issue.
Likewise, if the Liberal government begins to strengthen military spending and makes more meaningful contributions to our NATO allies, those on the right should express their support.
Only by putting aside some of our differences, expressing some humility, and being willing to see each other once again as fellow Canadians can we make it through this difficult time and emerge stronger.
Spencer Fernando
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