This column was published in in the Toronto Sun.
Following the election of Donald Trump as the forty-fifth president of our southern neighbour, Ontario Premier Kathleen Wynne commented that she was "shocked" by the result, and that the election of Mr. Trump could be a "danger to the economy of both of our countries"
It's true--Ontario's economy is about to get even less competitive. But don't blame the new president-elect of the United States. Responsibility for Ontario's economic decline lays squarely at the feet of the Ontario government.
The Premier whose government ran nine consecutive deficits and doubled the debt in as many years is saying the threat to the province's economy is a man who has never held elected office. The reality is that Ontario's economy is not threatened--it's under full fledged attack by its own government.
The cap-and-trade tax taking effect on January 1st will tax companies based on their emissions. From bottling and packaging plants to the auto and gas sectors, companies will be forced by the government to buy carbon credits if they want to continue building things and employing workers.
A report by Stikeman Elliott estimates that the policy will cost small manufacturers $136,000 in the first year. And by 2030, the tax will cost each large participant at least $2 million. The cost will rise so significantly because the government expects carbon credits to increase in price by 428 per cent from $18 per ton to $95 per ton.
For Premier Wynne to suggest that Ontario's loss of competitiveness is being threatened by Mr. Trump is doubly ludicrous given that manufacturers have warned her government that they will relocate out of Ontario because of cap and trade.
The Coalition of Concerned Manufacturers of Ontario has been telling the government that their members cannot sustain the cost of the new tax, and that there will be job losses. "Right now we are studying relocating parts of our business to the United States, and asking our employees to come with us. We have told the government repeatedly that cap and trade is hurting us," said Jocelyn Williams, Vice President of Automatic Coating, and founder of the coalition.
Premier is looking for a scapegoat for our province's economic woes
Relocating to the United States would give companies a competitive advantage because they will not be faced with a similar carbon tax to Premier Wynne's cap and trade plan. President-elect Trump will not be imposing a carbon tax, nor will the Republican-controlled Congress. Indeed, the coal industry was enthusiastically embraced by Trump during the election. This means that our friends south of the border will continue to enjoy far cheaper electricity than those of us here in Ontario, who already are stuck paying some of the highest rates in North America.
Of course, much has been made of Mr. Trump's comments about "tearing up NAFTA," and these comments are indeed troubling. But the Ontario government's cap and trade throws up its own new tariffs at the border, in the form of a so-called "border carbon adjustment". The government is proposing throwing up trade barriers by applying tariffs to imported goods based on the greenhouse gases emitted during their production. The government has identified fuel and electricity as key sectors where such tariffs could be applied. Given this, Wynne's stated concerns about free-trade appear self-serving and disingenuous.
The impact of a Trump presidency on the Ontario economy is yet to be seen. But if the Premier is looking for a scapegoat for our province's economic woes, she should be looking in the mirror rather than over the border. And she should be looking for solutions here at home.
