Memo to Premier Higgs: Beware a deal with the devil on carbon taxes
This column was published in the New Brunswick Telegraph-Journal on December 19, 2019.
By: Paige MacPherson and Aaron Wudrick
Premier Blaine Higgs is striking a carbon tax deal with Ottawa that may keep the peace for now, but sets taxpayers up for an ever-increasing bill.
Sure, it buys some time while legal challenges to the tax (in which New Brunswick is still participating) wind their way through the courts. But it also ensures that the federal taxman will come knocking on New Brunswick’s door for higher taxes year after year.
In fairness, Higgs’ goal appears to be an attempt to save New Brunswickers money.
The federal carbon tax imposed on New Brunswickers added 4.4 cents per litre of gas (plus a tax-on-tax thanks to HST), or about $2.50 every fill-up.
In April, taxpayers will now pay a New Brunswick carbon tax that will be offset by a cut to provincial gas taxes, resulting in drivers paying 1 cent more per litre.
But like the similar carbon tax plan in neighbouring P.E.I., this New Brunswick carbon tax won’t keep Ottawa off the province’s back for very long.
That’s because the federal carbon tax is designed to rise year after year, in order to punish people for using gas and home heating fuels.
It’s hard to imagine people in Miramichi or Rothesay happily cutting back on driving to work or keeping their homes warm in the winter. And it’s especially grating for taxpayers in New Brunswick given the province has already reduced its emissions by 28 per cent from 2005 levels, meaning the province is mere inches away from meeting its share of the official national target of a 30 per cent reduction.
So the federal government will continue increasing carbon taxes to try to hit those national targets, and that means ratcheting up the pain: a recent report from the carbon tax-promoting EcoFiscal Commission found that Ottawa would need to impose a $210-per-litre carbon tax in 10 years time. That would increase the cost of gasoline by about 40 cents per litre or $20 more for every fill-up of a Honda Civic.
That’s something the unlucky people of Vancouver have already experienced.
By caving to Ottawa’s demands, Higgs may have bought taxpayers a little time, but it has also implicitly given Ottawa the green light to keep jacking up a carbon tax that taxpayers rightfully oppose.
In fact, some carbon tax advocates are already complaining that the New Brunswick carbon tax isn’t good enough precisely because it doesn’t make gas expensive enough. Perpetually increasing federal benchmarks mean that if Higgs refuses to follow suit and matches every increase with another tax cut, Ottawa will eventually step in anyway – and New Brunswick taxpayers will feel it.
In the last provincial election, Higgs campaigned and won on his clear opposition to Ottawa’s carbon tax. Caving in and cutting a deal with Trudeau reverses the promise Higgs made to New Brunswick taxpayers. And any short-term perks – even if well-intended – will certainly come with a long-term hangover that will leave both Higgs and taxpayers hurting.
Paige MacPherson is Atlantic Director and Aaron Wudrick is Federal Director of the Canadian Taxpayers Federation.