This past Thursday, Canada’s Supreme Court delivered a blow to Conservative premiers across the country, ruling that the federal government’s imposed carbon tax is constitutional.
In a 6-3 decision, Supreme Court judges joined scientists and social movements in acknowledging that climate change is “an existential threat to human life.”
The decision was immediately celebrated by prominent Liberals and mainstream environmental organizations across the country, and heralded as a significant victory by major media outlets. The CBC cited the verdict as “a major decision that allows Ottawa to push ahead with its ambitious plan to ensure every province and territory has a price on carbon to curb greenhouse gas is emissions.”
Carbon pricing has long been a neoliberal and individualistic approach to tackling the climate crisis — one that often distracts from the type of steps we need to take and, at worst, breeds working-class resentment against climate action by downloading the costs onto everyday people.
Importantly, the Supreme Court ruling sets an important precedent against similar potential legal challenges, making future nationally-coordinated climate policy easier to implement. But it’s critical that we leverage this moment to bring attention to the fact that carbon pricing is woefully inadequate, and increase pressure on our elected leaders to embrace bold economic planning to tackle the climate crisis.
Big Oil’s Favourite Bargaining Chip
Only hours after the Supreme Court announcement, the Minister of Environment and Climate Change, Jonathan Wilkinson, sat down with Perrin Beatty, the president and CEO of the Canadian Chamber of Commerce, to celebrate the ruling and discuss the “key role carbon pricing plays in boosting a clean economy and achieving net-zero emissions.”
Earlier that day, ahead of United States’ President Joe Biden’s Climate Summit, the American Petroleum Institute — one of the primary architects behind organized climate denial — came out in support of carbon pricing.
For those paying close attention to climate policy in the past 15 years, neither would’ve come as a surprise. Carbon pricing has long been used as a political bargaining chip by Big Oil, providing green cover to get pipelines approved and keep fossil fuel subsidies flowing.
Many will recall that in 2015, when then-Alberta Premier Rachel Notley announced her provincial climate plan, she was joined on stage by the CEOs of many of Canada’s largest oil companies who, just prior, had encouraged her to bring in a carbon tax.
Tim McMillan, the president of the Canadian Association of Petroleum Producers, made clear why, saying Notley’s Climate Leadership Plan would “further enhance the reputation of our sector and improve our province’s environmental credibility as we seek to expand market access nationally and internationally.”
Just like that, Canada’s most polluting province put on a green cloak. It’s a move that would soon be replicated by the federal government at the urging of the oil industry and its top lobbyists.
John Manley, head of the Business Council of Canada (then known as the Canadian Council of Chief Executives) said, “Acquiescence to a price on carbon really is looked at as one side of a grand bargain that would see pipelines built in return.”
Sure enough, the day after Manley made his remarks, Prime Minister Justin Trudeau greenlit two bitumen pipelines, including Line 3 and the Kinder Morgan pipeline. Both approvals came just months after the Liberals approved construction of the Pacific NorthWest LNG terminal on British Columbia’s coast.
But the Business Council of Canada’s influence didn’t end there. As writer Donald Gutstein points out in the Tyee, when Trudeau announced his full climate plan in 2016, it bared a remarkable resemblance to the policies advocated for by the Business Council a decade before — namely, public investment in clean technologies, weak climate targets and a market-based carbon price. These demands were similarly echoed by the Canadian Association of Petroleum Producers.
While oil and gas companies publicly embraced the carbon tax for long enough to get their desired pipelines approved, behind closed doors they went to work fiercely lobbying the federal government for exemptions.
After months of concerted pressure, the government granted major industrial sectors, including the oil and gas industry, an exemption on paying the carbon tax on as much as 70 per cent of their emissions. But even this wasn’t enough to satisfy them. The backroom meetings with Environment Canada continued until the government conceded to further exemptions on up to 80 per cent of major emissions.
Where provincial policies hold instead of the federal backstop, there are similar loopholes. In Alberta, Premier Jason Kenney’s byzantine carbon pricing system gives credits back to oil and gas producers meaning their carbon price is effectively $0.
It’s a crucial reminder that any climate policy that leaves corporate power uncontested isn’t worth pursuing, especially this late in the game.
Breeding Working-Class Resentment Against Real Climate Action
In part due to the gaping loopholes left for major emitters, carbon pricing has proven to be a largely ineffective way of lowering carbon emissions. According to energy economist Mark Jaccard of Simon Fraser University, “Trudeau’s court-challenged carbon tax contributes 15 per cent of his climate plan’s reductions.” As Jaccard argues, carbon pricing is ultimately an unessential tool for decarbonization and one that could be replaced with a suite of more effective policies.
Carbon pricing has served as a decades-long distraction from building the kind of transformative Canadian climate agenda we urgently need to confront the climate crisis.
Despite carbon tax revenue in most of the federal and provincial policies being returned to households in the form of income tax rebates, the reality is that, for many, the relatively complicated policy instrument makes it easy to buy into the Fraser Institute’s assertion that carbon pricing is a “tax grab cloaked in green.” A 2019 poll conducted by Abacus found that 37 per cent thought it would increase the cost of living “a lot,” and 44 per cent said by “a small amount.”
Ultimately, in individualizing the cost of decarbonization, carbon pricing has resulted in many equating ‘climate action’ with personally punitive measures or unaffordable solutions like electric vehicles, instead of far-reaching populist climate policies that would drastically improve people’s day-to-day lives, like a federal job guarantee.
The carbon tax has constrained our collective imagination of what real climate action could look and feel like.
With 10 years remaining to avert the worst impacts of climate change, we can no longer afford to allow the Business Council of Canada and CEO of Suncor to set the terms of what’s deemed politically possible. We can’t get locked into a debate over a boring and inadequate climate policy that fails to bring us anywhere close to tackling the climate emergency at the scale that both science and justice demand.
Instead of wasting our breath over a climate policy backed by ExxonMobil and the Canadian Chamber of Commerce that upholds the myth that we can tackle climate change by simply tinkering with our current system, we need to exert pressure on all levels of government to create good unionized jobs for workers, end fossil fuel subsidies, build free public transit, phase out the oil sands and natural gas extraction, construct energy-efficient social housing, honour Indigenous land rights, and invest in nationalized care work and robust public services.
With this Supreme Court case now behind us, let’s get to work building a made-in-Canada Green New Deal — paid for by the multibillion dollar corporations that got us into this mess — that leaves no one behind.