October 23, 2020

An In-Depth Study of Trudeau’s Second Carbon Tax

An In-Depth Study of Trudeau’s Second Carbon Tax

Wednesday’s throne speech made one thing clear: the Liberals are not backing down from their unachievable net-zero goal. That means they are not backing down from their second carbon tax, the Clean Fuel Standard (CFS).

But we at CAE are not backing down either. In fact, we are committed to giving Canadians all the ugly facts about this very harmful tax.

Today we are releasing a new report, Assessment of the Proposed Canada-Wide Clean Fuel Standard. This report clearly outlines the high costs and low return rates that will result from it.  

The report focuses on three key issues with the regulation that will make its net cost outweigh any environmental benefits it may have: that the additional emission regulation undermines the efficiency of any existing carbon tax in reducing GHG emissions; that despite its cost the CFS will accomplish very little - especially in a growing economy; and that, depending on compliance options, the CFS may end up creating environmental challenges, not opportunities.

The problems of the Clean Fuel Standard (CFS) are truly represented in its name, which misleadingly suggests that the policy will deliver clean air. But Canada already has remarkably high clean air standards which are rarely violated. As the report points out, a more appropriate name for the regulation would be “Reduced CO2 Intensity Standard” as that is the true aim of the policy. 

The CFS, along with the current carbon tax, are pieces of the current government’s plan to meet emission reduction targets. But the race to reduce emissions is not an isolated pursuit. It affects Canadian industries, it affects our fragile economy, and most importantly it imposes additional costs on Canadian families. 

Our research has demonstrated that the proposed CFS regulation will lead to approximately 30,000 job losses nationally and will put approximately $22 billion of capital at risk of exiting the country to avoid investment losses.

If the Trudeau government is to pursue the lofty goal of zero emissions above all else, it will sacrifice the Canadian standard of living that has made our country a desirable place to live for so long. Trudeau will make it even harder to live in Canada.

This year has been an especially tough one for Canadians. Millions were - and still are - out of work. Millions have been left isolated and alone without the support of their communities, schools, and extended families. Canadians are feeling the financial, social, and emotional costs of the COVID-19 pandemic lockdowns imposed by governments. 

But now government is determined to make a bad situation worse.

The better option would be to do right by Canadians and abandon the Clean Fuel Standard before it does even greater damage to the Canadian economy.

Please read our Assessment of the Proposed Canada-Wide Clean Fuel Standard and its accompanying provincial case studies, which were completed for British Columbia, Alberta, Ontario, Quebec, and Newfoundland and Labrador.