Liberal leader Dion and the carbon tax

Neil McKenty

There must be a federal election by October 2009, or sooner if the Harper government falls on a confidence motion in the Commons.

In most Canadian federal elections there is no big issue. The major parties dive for the centre ground, leaving not much substantive difference between party platforms. Canadian voters, I would guess, make their decision on what they think of the leaders. Are they trustworthy, fair, competent, comfortable in their skins? Charisma is not a factor in current federal elections because no leader has much of it.

There hasn’t been a big issue in a federal contest since the Free Trade election of 1988. Could the next federal election be decided on a big issue?

It might well be. The issue currently being weighed on its pros and cons in party backrooms is the carbon tax.

The rationale behind a carbon tax is quite straight­forward: that we should tax less the things we want more of (work, savings, and investments) and tax more the things we want less of (pollution, greenhouse gas emissions, smog and waste). The intention of a carbon tax is to reduce emissions of carbon dioxide and slow global warming. Such a tax can be implemented by taxing the burning of fossil fuels – coal and petroleum products such as gasoline, aviation fuel and natural gas – in proportion to their carbon content.

This direct taxation is transparent. It can be popular with the public if it’s revenue-neutral – in other words, if the revenue from the carbon tax is returned to voters by reducing other taxes.

Could this be the defining issue that decides the next election? Indeed it could. And the man who is thinking of putting a carbon tax at the centre of his platform is Liberal leader Stéphane Dion.

Recently Dion ran the carbon tax up the flagpole for a Toronto business audience. “I’m prepared to fight an election on a richer, greener, fairer Canada, and I’ve said that for the last two years.”

Harper’s Conservatives are equally prepared to fight an election against the tax because they claim it would hurt our economy.

Other critics of the plan, including those in Dion’s own party who are nervous about any tax hike, especially on gasoline, say the proposed tax – to be officially unveiled next month – is confusing, expensive, and politically risky because many voters will see it as a money grab.

But Dion responds that his new tax, estimated to raise about $16 billion, will be revenue-neutral. “What can be clearer? We need to make polluters pay and put every single penny back into the hands of Canadians through the right tax cuts.”

Dion said jurisdictions like British Columbia, which will bring in the first carbon tax in North America this summer, have taken the lead in a movement he hopes will “sweep the nation.”

The latest polls show that 72 per cent of Canadians would support some form of carbon tax.

The Liberal leader also praised Quebec, which imposed a carbon-based tax last fall that pumps revenues back into programs supporting green technology.

The bigger fear among his own caucus members is that Mr. Dion, who at the best of times is not a great communicator in either official language, will be unable to sell his idea in 30 seconds at the door during an election campaign. One caucus member put the problem this way: “Voters do not want to hear how to build a watch, they just want to know the time.”

But the Liberal leader is planning his carbon campaign carefully. He has already dispatched 30-year-old rookie Ontario MP Navdeep Bains to sell the idea over this summer to young people.

One of his staff members, Nick Gzowski – son of the late broadcaster Peter Gzowski – has produced a TV ad about climate change inspired by the Make Poverty History campaign, in which film stars are seen snapping their fingers. In the carbon ad, Liberal MPs are featured clapping. Dion says, “We’re up to the challenge... Are you?”

There’s no question that Dion and the Liberals are playing a high-risk game. There’s also no question that a bold pol­icy to improve the environment and become a world leader in climate change could well engage the imagination of the Canadian voter, and be a political winner to boot.

It depends whether the Liberal leader can clearly explain the time, and not get bogged down trying to build a watch.