Yahoo Finance Terence Corcoran: After the carbon tax, axe Ottawa's tree plan
Before we launch into today’s theme song, which calls for taking a chainsaw to the Trudeau Liberals’ plan to plant two billion trees across Canada, I want to take a brief look back at the carbon tax increase and its endorsement last week by economists who signed an open letter released by the defunct Ecofiscal Commission. The letter was thoroughly deconstructed by Guelph University’s Ross McKitrick in FP Comment and by Steve Ambler at The Hub. But they missed a key point.
The letter begins with this statement: “Since federal carbon pricing took effect in 2019, Canada’s GHG emissions have fallen by almost eight per cent, although other policies were also at work.” The meaning is clear. The carbon tax, launched at 4.4 cents per litre of gasoline in 2019, helped drive down greenhouse emissions. The letter did not say how much of the eight per cent GHG decline could be attributed to the carbon tax. May I suggest the answer is zero: the carbon tax had no measurable impact on GHG emissions, for several good reasons.
First came the March 2020 COVID-19 lockdown that knocked five per cent off Canada’s GDP and sent millions of workers home. Then the world price of oil, fuelled by loose monetary policy and government debt, doubled to $100 a barrel by 2022. As oil rose, the price of gasoline shot up from $1.15 a litre in 2019 to about $2 a litre in the middle of 2022, a gain of about 70 per cent.
As the price of gasoline jumped to between $1.50 and $2 a litre, Canada’s gasoline consumption dropped 15 per cent in 2020. The carbon tax pennies were proportionately insignificant (see graph). Now it may be that the total impact of all climate policies drove down emissions more significantly than the economic slowdown and the oil price turmoil, but the reports issued by the Canadian Climate Institute (successor to the Ecofiscal Commission) are short on plausible evidence. Explain the modelling, please.
In summary, I say the claim that the carbon tax drove down GHG emissions does not stand up.
Now we turn to the Trudeau government’s 2019 2 Billion Trees program (known as 2BT), another climate effort that lacks supporting economic logic and/or modelling. At an announced cost of $3 billion, the objective of 2BT is to produce billions of seeds, find land and plant two billion carbon-absorbing trees over the next decade. Natural Resources Minister Jonathan Wilkinson claims the 2BT mission is a “significant step forward in Canada’s approach to tackle the dual crises of climate change and biodiversity loss.”
But even the CBC has taken to exposing the many uncertainties buried in the babbling brooks of Wilkinson’s promotional jargon. In an Easter weekend special on CBC Radio’s The House with Catherine Cullen, titled “The real dirt on the Liberals’ two-billion-tree pledge,” a CBC crew interviewed experts and arborists and visited facilities where seeds are grown and baby trees are planted.
The result is a documentary that exposed the improbability of the project. All guests argued that more trees are good for Canada, good for biodiversity and as shades and air filters in cities. But everyone cast doubt on the impact and viability of the plan.
The project will require the unprecedented production of billions of seeds in special facilities before planting as seedlings until they are ready for transfer to the wild — assuming enough land can be found across the country. Will planting two billion trees help Canada achieve GHG targets? “The flat answer is no,” said Akaash Maharaj, policy director with Nature Canada. He cited a study that found the government had “miscalculated” and that the program will actually be a “net emitter” of carbon until 2031.
Another problem is funding. A nursery manager said the plan needs long-term financial commitment from Ottawa, sort of like the EV industry. Only $3 billion won’t get the job done. He said trees take years to grow from seeds to seedling to plantable saplings that will survive. The tree industry, like the electric vehicle industry, needs to know that once it ramps up production, the demand and the subsidies will keep flowing for years to come.
Chop down that tree plan!
• Email: tcorcoran@postmedia.com
Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here.
