Liberals’ revenue-neutral carbon tax best for balancing the economy and the environment ~ Hugh Holland



The US National Oceanic and Atmospheric Administration reports that since 1948, global average temperature has increased by about 0.8 degrees Celsius.  That is consistent with the findings of the UN-sponsored Intergovernmental Panel on Climate Change. A study commissioned by Environment and Climate Change Canada says that in that same period, Canada’s average temperature over land increased 1.7ºC, with higher rates seen in the north, the Prairies and the glaciers of northern BC.  The increase in Northern Canada was 2.3ºC.  Northern Russia is seeing similar phenomena.

While the warming of Canada will result in more habitable land, it will also bring many problems. For example, the 17,000 British Columbia glaciers that store water and gradually release it over the year to BC’s 90-per-cent hydro-electric system are receding rapidly. We have personally witnessed the dramatic recession of the Columbia Ice Field that continuously feeds the Athabasca and North Saskatchewan Rivers that supply agricultural communities in the prairies of Alberta and Saskatchewan.

While these temperature increases seem small, they have profound effects on almost everything.  The explanation is complex but here it is in a nutshell. Global population rose very slowly from the last ice age to 1800 when it went exponential due to advances in health care. By 1900, the demand for energy beyond wood, sails and horses resulted in the use of fossil fuels. By 1960, the world had stabilized after WW2 and the millions who were lifted out of poverty used even more energy per person. So, in the last 60 years of my lifetime, global population has tripled and carbon emissions from fossil fuels increased by a factor of five. These emissions accumulate in the atmosphere and trap the sun’s heat like a greenhouse. Of that trapped heat, 90 per cent is stored in the oceans, resulting in rising sea levels, increased evaporation and precipitation, and increased frequency and severity of extreme weather events.

For 10 years, I have been researching and writing about how to optimize the complex interaction between the energy supply, the economy, and the environment. This is important to the world but especially to Canada with our enviable position of having the world’s third largest proven reserves of oil. It is fair to say that Canada’s biggest threat is climate change, and our biggest economic opportunity is getting that oil to the markets that will need it for several more decades.

The biggest question is, “Can we reconcile our biggest opportunity with our biggest threat?” The answer is yes. But it is critical that we keep an open mind.

In the interest of full disclosure, I must say that I did not vote for the Trudeau Liberals in 2015. I have since concluded that the Liberals now have the most realistic plans for balancing the economy and the environment.  The following chart shows the reductions necessary to achieve Canada’s emission targets. Without adding to net cost for consumers, the Liberals’ revenue-neutral carbon tax will engage all sectors of the economy in that effort, whereas the Conservatives’ targeted regulations would result in only partial engagement and partial success.

While it is true that Canada’s emissions are less than two per cent of global emissions and emissions attributable to oil sands extraction are less than 1/1,000th, the only way to influence the biggest emitters (China, USA and India) is to lead by example. We can eliminate emissions from oil sands extraction by using clean nuclear power and heat.  Both the US and Canadian governments are supporting the development of Small Modular Reactors by Terrestrial Energy of Oakville Ontario, and oil sands producers are very interested in using them for that purpose.  The regulatory regime for that development is more favorable in Canada because Canada has never used enriched (weapons-grade) uranium in our CANDU reactors.  The new reactors are better in every way compared to earlier reactors that served us without any serious incident for 50 years.

The Liberals are well on their way to starting construction on the Trans-Mountain Pipeline expansion.  The Federal Court deemed that the National Energy Board needed to consider marine shipping risks in their report and that the public consultation process needed to include better response to the concerns of indigenous peoples. Both of those requirements are expected to be met by June 15.  It is difficult to see what the other parties could have done differently or better.

The SNC-Lavalin case has been an unfortunate distraction for the past three months. The steady daily flow of scattered and contradictory opinions has only served to confuse the public.  To date, some ethical questions have been raised but no illegal activity has been found.  That is why the case should be subject to a careful and detailed review by the Ethics Commissioner and not by partisan politicians or the court of public opinion.

It is time to move on to the much more important job of ensuring we follow the best possible path to balancing efforts on environment, energy, and the economy.

Hugh Holland is a retired engineering and manufacturing executive now living in Huntsville, Ontario.

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  1. Liberals and their Rock star leader are bankrupting our Country. If you believe in socialism then continue to vote for the Liberals.

    • I agree with you, Ed. The tax-and-spend liberals are obsessed with taking more and more in taxation and then spending those ill-gotten gains on their pet projects. Somehow, those projects always seem to benefit donors to the Liberal Party. Are we really supposed to believe that the Liberals will ever be interested in benefiting the middle class? All they have ever done in the past, is to use the middle class as a cash cow. This, while throwing money at chicken-little-invent-a-problem-and-address-it-with-expensive-solutions that promise “jobs-jobs-jobs” in order to buy votes.

      As for “climate change” 1) It is debatable that the world is warming (there are dissenting climate scientists that the mass media never seem to interview) and 2) Even if it is, would the government propose that the poorest among us will starve in the cold, when it could be just a natural variation in temperature? (If one believes anything that comes out of the IPCC, I’ve got a bridge to sell you–they only included scientists who believe that CO2 is the cause). The U.N. (the IPCC was their brain child) has always been at the forefront of the worldwide socialist agenda–why would this time be any different? Think about the socialist/Marxist government of Maduro in Venezuela for an idea of where ALL experiments in Marxism inevitably end up–with the people either starving in the cold, or starving in the sweltering heat. It is a lie that the Scandinavian countries are socialist countries. The more accurate description of them is that historically, they have always employed “compassionate capitalism”. Canada has for many, many decades employed “compassionate capitalism”. That is why I am in favor of the status quo, rather than allowing the Liberals to launch us into another round of tax-and-spend corruption.

      The other thing that Ottawa’s career politicians love to do (and Liberals seem to be the champs in this regard) is peddle influence (SNC-Lavalin is likely just the tip of the iceberg) in order to court deep-pocketed donors. This is what comes from federal central governments usurping more and more power. The people always lose when authority flows upward (along with tax dollars). Large central governments spawn huge bureaucracies where those at the top of the bureaucracies receive VERY handsome pay and benefits and the workers (who actually deliver the services) have to beg for even the most meager increases. Our bloated provincial healthcare and education bureaucracies are the two biggest examples of that. We know what nurses, doctors and teachers do (they all work VERY hard jobs). Do we know how healthcare and educational administrators spend their days? Why are bureaucratic positions sacrosanct? Somehow, when the inevitable cuts come, they are always taken at the expense of the front line staff–nurses, doctors and teachers.

      We can start to correct that situation by leaving as much of the peoples’ money in the pockets of the people. We are told that this is carbon tax is “revenue-neutral”. If the Liberals get elected again, it will undoubtedly lose that status practically overnight.

      • Hugh Holland on

        Canadas ratio of debt to gdp is second lowest in the G7. We need to invest in the future. We cannot save our way to prosperity. This is on the advice of one of the world’s leading consultants.

        • So what? The government most CERTAINLY cannot spend our way to prosperity. So, “investing in the future” amounts to giving government carte blanche over our wallets? An ever larger role in our lives??

          What George Orwell (he was a socialist, by the way) imagined is materializing–a cradle-to-grave control mechanism that makes virtual slaves of all but a handful of elites. Socialist-communists everywhere drool over the idea. The only thing wrong with Orwell’s predictions is that he was a few decades too early. It would be wise for all citizens to read Orwell’s cautionary tale, called “Nineteen-Eighty-Four”. Oh, I forgot–no one reads anymore. By all means, let’s invest in more electronic dumbing-down devices (and 5G technology threatens us with virtual electronic stupor). It makes for an ignorant and docile group which only responds to dog-whistle issues blown all out of proportion by a cavalier mass media which is only interested in click-bait sensationalism that blames conservatives for everything. The elites at the top of every corporation, central bank and government bureaucracies laugh at the “useful idiots” who are puppets on their strings. Meanwhile, very real problems go without being addressed, because if government tells us it isn’t a problem, then we like sheep just obediently baa-baa.

          Here’s a problem which you will never see played up much in the mass media. All life on the planet is slowly being poisoned by herbicides and pesticides but, as long as the elites have their organic foods and so-forth, the chemical-pharmaceutical industries (they are all owned by the same people) will continue to poison–at huge profits for themselves.

          Over 6 billion pounds of herbicides/pesticides are dumped on food crops every year, getting into waterways to poison wild life and us as well–and it doesn’t end there. The residues are left in the foods we eat and the dust even poisons our air. Nearly every new mother now has measurable levels of pesticides in her milk.

          These chemicals are making us sick and it are killing us. In 1964, only 4% of Americans had chronic disease (and presumably the same is true of Canadians). Today 46% of our CHILDREN have chronic disease and they are not minor diseases. The rate of cancer, autism gastrointestinal disease and auto-immune conditions have skyrocketed among children. They were admittedly low to begin with, but isn’t anyone concerned about the rapid increases?

          A truly vigilant government would be seeking to prevent this systematic poisoning of the population–but then, corporations now apparently rule governments with few exceptions. There is the occasional victory through the courts. Monsanto just lost their second court case by individuals harmed by glyphosate (Roundup). Glyphosate destroys the good gut bacteria that keeps our digestion system healthy and helps us digest our food. Millions and millions of pounds have been spread all over farmland for years. In a bit of sangfroid, I am happy to see that the stock of parent-company, Bayer, has continued to fall as more and more court cases are brought against Monsanto. Bayer got a “tiger-by-the-tail” when it bought Monsanto.

          That is why the stronger a central government gets, the more we become its slaves. Mussolini’s short-hand definition of fascism was the marriage of government with the corporations. Never forget that the fascists in Germany started as the “National SOCIALIST German Worker’s Party”. The elites have always been more comfortable with totalitarian governments than the rule of law and by the vote of ordinary citizens. Whether totalitarianism is spawned from the “right” or the “left” they aim to stay firmly in control. “Baa-Baa.”

      • Hugh Holland on

        Erin, Just talked to our son in Northern BC. They are fighting 2 wildfires already in the first week of April. Last year was a record for fires in BC. It is past time to get our heads out of the sand about climate change.

        • Who says the warming is from anything we are doing? CO2 has always been a very tiny part of the atmosphere in recent centuries–we know it was a larger component in the distant past from measuring the amount in ice core samples.

          • Erin – literally every creditable scientist and scientific organization. Stop spending all your energy trying to convince us that climate change is not a problem. It is our biggest problem.

        • So? The amount of time we have been looking at it is quite small. No one was here to observe forest fires during the Medieval Warm Period.

  2. Hugh, there is a far better idea out there; as the States, India, and especially China are not going to be reducing their CO2 emissions any time soon. Why not deal with the world we have?

    In B.C. , there is a company which is already extracting CO2 from the atmosphere. As if that wasn’t enough, they subsequently combine the CO2 with H2 (separated from water molecules, using renewable energy). The resultant fuel can be used in existing vehicles (gas and diesel) and jets with negligible emissions. A gentleman named Bill Gates has bet considerable millions of dollars on its efficacy.

    Why wouldn’t Canada be interested in getting in on the ground floor? The profits would surely exceed any monies generated by the carbon tax; and could be used toward other climate-change research.

    • Hugh Holland on

      Rob, there are many ideas out there. Many are unproven and uneconomical. Some may mature and some may not. There may be limited applications for carbon absorption such as making carbon-fibre materials, but the idea is self-defeating; the more CO2 you produce, the more you have to absorb.

  3. Hugh, how can we have any faith or believe anything that comes out of the Liberals and their drama teacher PM. Look at the last 3 years, we have the India joke, 4 ethics violations, the border immigration problem, the excessive funding of the UN and other 3rd world hell holes, debt, higher taxes, unbalanced budgets, the poor treatment of the good hardworking people of Alberta, last Thursday’s insult in Toronto to the indigenous Rainy River protestors and I could go on for hours.

    This PM is a disgrace to the office, his caucus are a disgrace. We need a change, anything would be an improvement.

    • Hugh Holland on

      Mitch, if everyone was judged by the 5 dumbest things we have said or done, then we are all bad people. We all want to be judged by the sum and total of what we are, by our accomplishments and our contributions.

      • Doesn’t necessarily make us “bad” but, it might be evidence of ignorance or deficient intelligence, Hugh.

    • John T M Anderson on

      Still the “drama teacher “ critics out there who seem happy to turn the country over to a failed part-time insurance salesman.

  4. Folks and Hugh .. If you think you are going to influence China, USA and India… continue to smoke weed! Canada will bottom out and NOTHING will change except Canada going further down in investment and economy opportunities, higher and higher taxes etc etc .. watch what happens .. but .. don’t worry .. the Liberal SJW narrative and ideology will be gone soon has happened in Ont … but this time around it will be ‘gone’ in the entire country. Our federal government is the worst it has been since papa Trudeau was in power! Check just this one factor …

    • Hugh Holland on

      Bob, if every country takes the attitude that we should not try to do our best, then there is no hope for the future. The investment opportunities will come to the leaders in new clean technology such as wind, solar and advanced nuclear where we are already leading but can do more.

  5. Charles Wilson on

    Take away at the window dressing and the much-touted carbon tax is simply a licence to pollute. Unfortunately the licence is not paid for by the polluters, it is paid for by their customers. This is why Big Oil shares Mr Holland’s enthusiasm for it.

    And yes the Liberals have the best plan for because Tony’s gang is waiting to see what fellow-traveller Jason Kenny does when he is crowned premier of Alberta later this month.

    There was a rumor started that Mr Scheer was going to counter with an abortion tax in line with his barefoot in the kitchen philosophy for women but it is only a rumor.

    Politicians being put in charge of solving climate change is fox and henhouse stuff. No politician does anything but react to a perceived problem usually of their own making. What is needed, and will never happen, is a global consensus. Paris, Kyoto and Copenhagen showed us exactly what happens when you put the world’s locally elected and locally responsible politicians in a room together and ask them to discuss climate. They simply produce more hot air.

    Canada leading by example stopped being a reality when our shameful role in an American war of private aggression in Afghanistan showed the world that we are the running dogs of Haliburton Oil. A telling phrase came out of Premier Ford’s mouth at the Manning Centre conference last week boasting about how well the economy was doing: “ Why, he said,” if we were a stand-alone nation…….”

    So what can we do? Collectively nothing. Individually simple: Don’t fly around, take your holidays locally preferably in Muskoka. Don’t eat food grown abroad and trucked in; support your local food suppliers, Don’t drive, try instead to walk, bike or ski if you can and if you cannot car pool. Turn the heat down and wear sweaters. We will live longer and be happier.

  6. We are told that the Federal carbon tax will be managed so the average citizen receives more in rebates than he/she pays in tax.
    Anyone who believes that is truly delusional.

    If we must pay a revenue-neutral carbon tax we should receive a rebate according to receipts we have collected on our actual energy purchases. These would be submitted along with other information at income tax time. Only tax filers would receive rebates.
    No government social engineering schemes and no hocus pocus as has been proposed.
    All fuel pumps should display a simple list of tax charges and identify which level of government is responsible for each. Consumers would be able to see clearly who is charging what.
    As it is now people are unaware of what they are paying and unable to make clear decisions about supporting things like carbon taxes.

    • Hugh Holland on

      Jim, gas costs twice as much in Europe because they have to import it all. We are lucky but also extravagant and wasteful, myself included. We can do better and we must.

      • And the governments of the EU have put draconian gasoline taxes in place to finance their own profligacy on the backs of the workers. What do you think the “yellow-vest” protests are about.

  7. Hugh- your patience in addressing these comments is admirable. Thank you for writing this piece. There is a lot of negatively, and doubt regarding the Carbon Tax – most of which is routed in myths and false “facts.” This is a just a start, the government (which ever government) will need to do a lot more on an individual and corporate level if we have a hope of meeting our emission reduction targets.

  8. Brian Tapley on

    So I’m still trying to wrap my head around this carbon tax.

    We tax the consumers, not the producers.

    Then we take all the tax, less the administration costs of course, (this would be revenue neutral, right?) and we give all that is left back to the very same consumers that we taxed it away from in the first place.

    Now how does this either reduce carbon emissions or provide lower carbon emission alternatives? The only item in this list that is benefiting is some government bureaucracy that is siphoning off that portion they need to exist from the tax revenue. I’m sure they will have a nice office somewhere that didn’t exist before and the consumers who paid the tax will not actually be revenue neutral by that amount used for this function.

    Remember the consumer still has to move their car and heat their home and cook their food etc. so they are still going to use energy and with no new, more efficient technology with which to do these functions they are still going to use the same old amount and produce the same amount of carbon.

    The whole thing seems like some smoke and mirror game from an episode of Harry Potter!

    The citizenry of our country is not all totally stupid and even if we are not as smart as the gurus who have proposed this tax it is incumbent on our leaders to explain how it will benefit all of us in a manner that we can all understand. This they have not done well. Hugh is at least prodding them along a bit.

  9. Kathryn Henderson on

    I would happily pay all the carbon tax wanted if I could afford to keep a roof over my head and be able to pay my utilities and other bills even though I think it’s a tax grab. And you who agree with it are probably the well paid elite of Muskoka who can well afford the extra cost. Most jobs in Huntsville are retail and service. Waitress jobs, cashier jobs. We are like a hamster on a wheel, working working, working and never getting ahead. It won’t be long until we have to sell our family home because of rising costs. And lead by example is a fairy tale. We are 2 lousy percent? Come on.

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