Carbon Taxation: The Canadian Experience
Economist says Canada’s carbon tax regime is a complete mess
London, 5 June 2019. A prominent economist says that Canada’s carbon tax regime, introduced last year, has been a complete mess. In a new paper published today by the Global Warming Policy Foundation, Robert Lyman explains how a theoretically sound approach to addressing CO2 emissions has turned out to be worse than critics have feared.
“Carbon pricing should be the most economically efficient way to deal with CO2 emissions”, says Lyman. “But the Canadian government has turned a simple idea into a dog’s breakfast.”
The problems encountered range from the use of rates that are unrelated to the cost of global warming, and varying widely across different provinces, and a staggering array of “complementary measures” that have made administration unnecessarily difficult. Moreover, it is not even clear that the carbon tax regime is constitutional – three provinces have launched challenges in the courts, and two more are likely to follow suit.
Lyman says that the carbon tax regime in Canada therefore faces an uncertain future:
“The way carbon taxes have been dealt with in Canada is almost the opposite of how it should have been done. It has been complex, inefficient and damaging to the economic prospects of the country. The government is going to have to think again”.