Mr. Jean Charest: You published an opinion letter a few days ago and reading it, I felt a certain uneasiness. Truth be told, I noticed a questionable selection of carbon tax aspects highlighted to support your argument. First, Quebec is not subject to the federal carbon tax program; we have the Carbon Exchange that you set up. Secondly—and this will be the subject of this article—it is very good to inform Canadians about the impact of the carbon tax on households, but perhaps we should point out to them that more than 80 % of households receive more money than they pay?
In fact, that is what the study by the Parliamentary Budget Officer showed. The truth is that only the big polluters or, more generally, the wealthiest pay more in carbon taxes than they receive.
This is called a fiscally neutral tax; she gives all of what she takes, unconditionally. (I understand it’s popular in Quebec.) So that money doesn’t go into state coffers, but goes straight back to Canadian families.
Some might then wonder why we are taxing carbon if we are sending money to families.
The reason lies in the choice of individuals. Instinctively, people try to maximize their well-being when they are under budget constraint. If gasoline is more expensive, then consumers consider other options. This is what explains the meteoric rise in demand for electric vehicles in recent weeks; people are looking to save.
Consequently, people are turning to more sustainable modes of transport such as carpooling, public transport, cycling or even walking. They don’t do it out of environmental concern – well yes, a little – but simply to maximize their well-being; this is what makes them happiest, given this new price regime.
However, this option is sometimes more expensive. Take the example of a resident of Saint-Hyacinthe, my hometown. Public transport is far from optimal; the city lacks density. The latter is the result of deficient public policies that subsidize roads — and therefore urban sprawl — but only finance 50% of public transit. Cities also maximize their profits and choose free roads that bring recurring revenue through property taxes.
These development policies make it particularly difficult to introduce public transit in rural areas, and very few will dare to brave the storm by bicycle, on unsuitable roads. Consequently, the citizens of Saint-Hyacinthe — or rather of the majority of low-density Canadian cities — cannot turn to public transit. They can only buy an electric car or carpool to reduce their bills.
That’s why the Canadian government is giving families a carbon dividend: to provide them with a greater income and compensate for rising costs. The government wants to ensure that the carbon tax is not at the expense of the poorest; it is redistributive for 80% of households. This policy is therefore not only a good climate policy; it reduces the social inequalities that plague our society.
Moreover, the carbon dividend works per capita. Families are therefore not disadvantaged; they are offered more carbon dividends.
In short, the federal carbon tax is excellent; it’s always a good time to raise the price of carbon. To tell the truth, not to do so would be selfish towards future generations.