Will a Federal Carbon Tax cause a recession?
Doug Ford is going to new heights. And it isn't just something he has said in passing once now. He has even gone on record after the fact defending his claim.
But, is there any meat to it? No.
Put simply, Doug Ford is either an idiot, or says things which pander to idiots. I'm not sure which is true. One can't really argue that he has achieved enough success to get himself elected as Premiere of Ontario. So, perhaps he is cleverly manipulating the dim-witted majority.
In either case, there is absolutely no evidence to support his claim. And, there is circumstantial evidence to prove him wrong. And, there is one strong piece of evidence to destroy the argument.
The weak evidence against is, the one province currently rolling with something akin to the Federal Carbon Tax, British Columbia, is actually doing better economically since adopting the tax. As others have pointed out, it doesn't mean that the tax improved the financial situation of the province, or even if it did, that it contributes to the whole of the benefit. But, it does show quite clearly... a carbon tax in BC did NOT cause a recession.
The Ford argument I read was (paraphrased) "I don't understand how making stuff more expensive could possibly improve the economy". And this is the kind of comment where I'm not sure if he is really just an idiot, or just playing the idiots for fools.
Firstly, the carbon tax, like the cap and trade system before it aren't direct, universal taxes on individuals. As such, it is false to say that it makes everything more expensive. It certainly will make many things more costly. But, what is done with that money matters. If that money is pissed away into the ether... then sure, it absolutely will hurt the economy. But, that isn't how this tax will work.
The simplest solution to the problem is... spend all of the money by giving it back to those that are impacted most by the tax. Effectively, it becomes is an income redistribution mechanism then. It puts more money back into the hands of the people who will need it most, and are thus more likely to reinvest it. Which in turn means it actually promotes economic growth. Not a recession.
The more complex solution a mix of the simple and re-investing the money in green energy. Basically, if we can promote and foster an environment where green energy businesses boom, then we will eventually hit a point where no one actually needs to pay into a carbon tax, driving costs back down while paying out money to those who need it during the transition period.
But, the kicker is... we already know it won't CAUSE a recession. BECAUSE. WE. ALREADY. HAD. AN. EQUIVALENT. SYSTEM. IN. PLACE. FOR. YEARS. WHICH. DID. NOT. CAUSE. A. RECESSION. The Green energy program which Ford scrapped right after being elected. Remember that thing? Well, if it hadn't been dismantled, then the Federal Carbon Tax wouldn't apply to Ontario because we would have an equivalent system in place. And that system was NOT causing or even leading Ontario into a recession.
All of this points to yet another problem with Ford's rhetoric. We KNOW we can implement something that will both satisfy the governments requirements and NOT cause a recession. If the Ontario government is actually afraid of the Federal governments implementation... well, they simply need to revert back to what we had, or come up with something better.
Poorly implemented, there is no doubt that a carbon tax could hurt the economy. But, Ford has provided ZERO evidence to back his claim. He has referenced reports which the very author's have refuted back his claims and ignored all other evidence.
While a broken clock may be right twice a day. I don't think this is even one of those times. Ontario is more like BC or Quebec than a province like Alberta or Saskatchewan. While we certainly have pockets of reliance fossil fuels, we also have a very diverse work force and industries. I suspect that even in the face of a national or even global economic down turn, even with the "burden" of a carbon tax, Ontario will outperform the average province.
In fact, what scares me the most about Ford is that he seems to want to push Ontario towards a deeper dependence on fossil fuels at a time when the industry is clearly buckling under it's own weight. If you go look at gas or crude market prices over the past few years compared to, say 10 years ago, what you'll notice is that the market is much more volatile and in all the wrong ways. We're not getting anywhere near historic highs before plummeting back to or below 10 year lows. The markets overall appear to be trending downwards. And, if you pay any attention to market trends you'll understand why and why this isn't going to stop.
I'm not going to bother saying that a carbon tax can't be a contributing factor in a recession. But saying that the incoming one WILL be the CAUSE of one? That's lunacy. It is a baseless claim, beyond reason.
But, is there any meat to it? No.
Put simply, Doug Ford is either an idiot, or says things which pander to idiots. I'm not sure which is true. One can't really argue that he has achieved enough success to get himself elected as Premiere of Ontario. So, perhaps he is cleverly manipulating the dim-witted majority.
In either case, there is absolutely no evidence to support his claim. And, there is circumstantial evidence to prove him wrong. And, there is one strong piece of evidence to destroy the argument.
The weak evidence against is, the one province currently rolling with something akin to the Federal Carbon Tax, British Columbia, is actually doing better economically since adopting the tax. As others have pointed out, it doesn't mean that the tax improved the financial situation of the province, or even if it did, that it contributes to the whole of the benefit. But, it does show quite clearly... a carbon tax in BC did NOT cause a recession.
The Ford argument I read was (paraphrased) "I don't understand how making stuff more expensive could possibly improve the economy". And this is the kind of comment where I'm not sure if he is really just an idiot, or just playing the idiots for fools.
Firstly, the carbon tax, like the cap and trade system before it aren't direct, universal taxes on individuals. As such, it is false to say that it makes everything more expensive. It certainly will make many things more costly. But, what is done with that money matters. If that money is pissed away into the ether... then sure, it absolutely will hurt the economy. But, that isn't how this tax will work.
The simplest solution to the problem is... spend all of the money by giving it back to those that are impacted most by the tax. Effectively, it becomes is an income redistribution mechanism then. It puts more money back into the hands of the people who will need it most, and are thus more likely to reinvest it. Which in turn means it actually promotes economic growth. Not a recession.
The more complex solution a mix of the simple and re-investing the money in green energy. Basically, if we can promote and foster an environment where green energy businesses boom, then we will eventually hit a point where no one actually needs to pay into a carbon tax, driving costs back down while paying out money to those who need it during the transition period.
But, the kicker is... we already know it won't CAUSE a recession. BECAUSE. WE. ALREADY. HAD. AN. EQUIVALENT. SYSTEM. IN. PLACE. FOR. YEARS. WHICH. DID. NOT. CAUSE. A. RECESSION. The Green energy program which Ford scrapped right after being elected. Remember that thing? Well, if it hadn't been dismantled, then the Federal Carbon Tax wouldn't apply to Ontario because we would have an equivalent system in place. And that system was NOT causing or even leading Ontario into a recession.
All of this points to yet another problem with Ford's rhetoric. We KNOW we can implement something that will both satisfy the governments requirements and NOT cause a recession. If the Ontario government is actually afraid of the Federal governments implementation... well, they simply need to revert back to what we had, or come up with something better.
Poorly implemented, there is no doubt that a carbon tax could hurt the economy. But, Ford has provided ZERO evidence to back his claim. He has referenced reports which the very author's have refuted back his claims and ignored all other evidence.
While a broken clock may be right twice a day. I don't think this is even one of those times. Ontario is more like BC or Quebec than a province like Alberta or Saskatchewan. While we certainly have pockets of reliance fossil fuels, we also have a very diverse work force and industries. I suspect that even in the face of a national or even global economic down turn, even with the "burden" of a carbon tax, Ontario will outperform the average province.
In fact, what scares me the most about Ford is that he seems to want to push Ontario towards a deeper dependence on fossil fuels at a time when the industry is clearly buckling under it's own weight. If you go look at gas or crude market prices over the past few years compared to, say 10 years ago, what you'll notice is that the market is much more volatile and in all the wrong ways. We're not getting anywhere near historic highs before plummeting back to or below 10 year lows. The markets overall appear to be trending downwards. And, if you pay any attention to market trends you'll understand why and why this isn't going to stop.
I'm not going to bother saying that a carbon tax can't be a contributing factor in a recession. But saying that the incoming one WILL be the CAUSE of one? That's lunacy. It is a baseless claim, beyond reason.
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