September 21, 2020

Guest post by Leigh Raymond

Canada’s carbon pricing policies still face an uncertain future, with a Supreme Court hearing due this month on the federal carbon price, and new federal Conservative leadership still rejecting a carbon tax. Research I have been undertaking as part of the Smart Prosperity Institute’s Greening Growth Partnership on the political drivers of climate policy stability can help to inform how carbon pricing policies in Canada got to this point, and how their design can be reconsidered in the future to avoid these kinds of partisan struggles. In most cases, the attacks on carbon pricing draw on populist themes of the policy’s unfair burden on “ordinary Canadians.” These populist attacks were central to the successful 2018 repeal of Ontario’s carbon cap and trade policy. My research explores how Ontario’s experience can serve as a cautionary tale, indicating the importance of addressing consumer energy prices clearly in the design and promotion of climate policies to build public support in Canada and in other locations (such as the United States and Brazil) where similar populist arguments are bedeviling climate policies.

In the design and communication of the policy, the Liberal provincial government emphasized the risks to Ontario from climate change and the potential for new economic development in zero-carbon energy technologies, both familiar strategies for promoting carbon pricing. Consumer costs were rarely discussed until very late in the process, and only a minority of revenue from the auction of emission allowances went to new programs to help citizens reduce their energy costs. Instead, messaging focused on the policy’s investments in public infrastructure. While these communication priorities are understandable, they contributed to the policy being vulnerable to portrayals as a “slush fund” for Liberal spending priorities.

Meanwhile, Conservatives attacked the policy from the outset for threatening to “raise the price of everything” for Ontarians, leveraging existing public frustration over higher electricity costs in the province. Exploiting public confusion over how the policy worked, opponents were able to reframe the policy as a carbon tax that would increase the day-to-day expenses of working families. Although the policy’s actual effect on consumer prices was expected to be small, Conservatives were still able to package the program as part of a larger set of policies harming the “working class”. By the time Liberals responded to these consumer cost arguments directly, the 2018 election campaign was in full swing and Conservatives across Canada were protesting provincial and federal carbon pricing ideas based on the issue of “affordability.” In this respect, Doug Ford’s unexpected ascent to the leadership of the Ontario Progressive Conservative party in 2018 intensified the party’s anti-carbon pricing message, but did not substantially change it. Thus, it is an oversimplification to attribute the repeal of the program to the unlikely political scandal that put Ford at the top of the party.  

Although carbon pricing was not the primary issue powering Ford’s victory, it was a valuable symbol for the party’s populist message. More importantly, there was insufficient public support for the carbon cap and trade program to protect it from repeal, unlike longer-running programs where more revenue went toward reducing household energy costs through energy efficiency subsidies or even direct payments, such as the Regional Greenhouse Gas Initiative in the U.S., or even British Columbia’s carbon tax.

In sum, the Ontario experience is a warning that Populist attacks based on a climate policy’s consumer costs remain a serious political threat, even where the actual economic effects on citizens are quite small. For this reason, policy designs and communication strategies that stress the financial benefits of such a policy for ordinary citizens are crucial, and will be tested in the continued political struggle over the federal carbon tax and other efforts to deploy widely-recommended carbon pricing policies.

For a detailed presentation of Dr. Raymond’s research on Ontario, see his recently published article in the journal Climate Policy.