How Kathleen Wynne and Andrea Horwath completely undermine their claims about carbon taxes

This article was previously published by the Financial Post If fighting climate change is a priority for Ontario politicians, they have a funny way of showing it. Whether the cap-and-trade carbon tax should be kept or scrapped is a key issue in the Ontario provincial election, with Andrew Horwath and Kathleen Wynne in favour of keeping it, and PC leader Doug Ford in favour of repeal.

But what's strange isn't the idea of repealing it--after all, the Auditor General found that cap-and-trade would cost $8 billion by 2020, and achieve no meaningful greenhouse gas reductions. Rather, what's bizarre is that both Wynne and Horwath want to keep cap-and-trade, while simultaneously favouring policies that are explicitly designed to undercut the purpose of the tax. The theory behind the carbon tax is that increasing the price of greenhouse gasses will change behaviour, so people reduce their CO2 emissions. When asked if Canadians should expect higher fuel prices with a carbon tax, Prime Minister Trudeau responded that high prices are "incentives" for "behavioural change," and this is "exactly what we want." This is a hard pill for Canadians facing record gas prices. But the Prime Minister is right. A carbon tax is intended to create higher prices which drives behavioural change. Wynne and Horwath are undercutting this driver by supporting policies that either hides or subsidizes the increased cost. The first hypocrisy lays with Wynne alone. The Wynne government is intentionally hiding the carbon tax from our bills. The tax is not listed on our receipt at the pumps or on bills for natural gas. Instead, the carbon tax is lumped in with the "delivery" charge for natural gas. By obscuring the cost of the carbon tax, consumers aren't being given the pricing information that pushes them to reduce their gas and heating bills. Instead, consumers see a higher price, and assume it is part of broader price fluctuations. To their credit, the NDP favoured disclosing the cost of the tax, and joined with the PCs to support a private member's bill requiring that natural gas companies disclose the price as a separate line item. The bill ultimately failed, but if the NDP forms the next government and keeps cap-and-trade intact, they should uphold their commitment of cost transparency by requiring disclosure of the tax on bills.

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The second policy move by the Wynne government is even more problematic, and it is a policy supported and doubled down on by Horwath. The Wynne government is borrowing money to lower electricity rates driven up by the carbon tax. The government said they would pour $1.32 billion into electricity subsidies to offset price increases. The Auditor General found that despite these subsidies, electricity prices would still increase by 23 per cent by 2020. Hearing this, the government poured even more money into subsidies and took on tremendous debt. The "Fair Hydro Plan" will cost upwards of $93 billion, all to save $24 billion in higher electricity costs the government itself imposed. The NDP is going further, by pledging to use 25 per cent of cap-and-trade revenues  to subsidize low-income households and trade-exposed industries, so they don't even feel the cost of cap-and-trade. So much for behavioural change. Why would these politicians spend billions to undermine their own policies? The simple answer is politics. Carbon taxes come with a political cost, but they also earn credit with green groups. Adopting a carbon tax, but then hiding it from voters offers the best of both worlds politically. For taxpayers and the environment, however, it is worst of all worlds--the environment doesn't benefit, and taxpayers find themselves further in debt after the government attempts to bribe them with their own money. Rather than trusting politicians to help the environment, it is time to give families the tools to reduce environmental impact. Smart thermostats, smartphone apps that track electricity use, and other technologies give consumers the information they need to cut energy use. These new tools to help consumers find ways to save on heating and electricity. They offer the power to use existing price signals to cut CO2 emissions. These are the policies all of Ontario's political leaders should favour while scrapping the carbon tax. The next government will have a choice between carbon taxes that punish families but don't empower them, and technologies that empower families to find ways to cut costs and carbon.