Yes the libs did that political maneuver however it wasn’t pure politicking without connection to what the Canadian public wanted. It’s a democracy and most people want this policy out.
It’s also smart because the carbon tax while efficient on paper, doesn’t account for the political externalities it creates. For example it doesn’t account for the backlash it creates when it punishes people who have no alternative to switch to. It just raises their cost of living and people get rightfully mad because they understand there’s nothing they can do about it. Another problem with it is that precisely because it relies on the invisible hand, it’s difficult for people to understand how it affects them, whether they end up being better off or worse off. As a result they end up simplifying it themselves to - there’s a higher price on carbon, I’m likely paying more for things than I’m getting back. Add the those political externalities together and it may turn out that the carbon tax is self-defeating.
The new PM is removing the consumer portion of the carbon tax, eliminating the most visible problems it creates. While not done yet, they’ve alluded to replacing it with concrete consumer subsidies for tangible things like heat pumps, insulation, EVs.
A carbon tax might work without defeating itself in a different society, implemented by a different government, but in Canada it hasn’t.
Yes the libs did that political maneuver however it wasn’t pure politicking without connection to what the Canadian public wanted. It’s a democracy and most people want this policy out.
It’s also smart because the carbon tax while efficient on paper, doesn’t account for the political externalities it creates. For example it doesn’t account for the backlash it creates when it punishes people who have no alternative to switch to. It just raises their cost of living and people get rightfully mad because they understand there’s nothing they can do about it. Another problem with it is that precisely because it relies on the invisible hand, it’s difficult for people to understand how it affects them, whether they end up being better off or worse off. As a result they end up simplifying it themselves to - there’s a higher price on carbon, I’m likely paying more for things than I’m getting back. Add the those political externalities together and it may turn out that the carbon tax is self-defeating.
The new PM is removing the consumer portion of the carbon tax, eliminating the most visible problems it creates. While not done yet, they’ve alluded to replacing it with concrete consumer subsidies for tangible things like heat pumps, insulation, EVs.
A carbon tax might work without defeating itself in a different society, implemented by a different government, but in Canada it hasn’t.