June 23, 2020

Erin O'Toole's costly green adventure

Erin O'Toole's costly green adventure

CPC leadership candidate and Ontario MP Erin O’Toole released his platform a few weeks ago. Within 24 hours he had backtracked his positioning on energy. It seems that walking the line between keeping grassroots conservatives happy and maintaining a quasi-green image is a more difficult task than O’Toole anticipated. 

Memo to Erin: the greens are not your voters, despite what some policy appeasers might say.

In his original platform released on June 11, O’Toole promised to end fossil fuel subsidies as “a form of corporate welfare”. The next day he retreated from that promise and replaced it with a promise to “[simplify] the tax code to create confidence in the resource sector and support its actions toward emission reduction.”

According to O’Toole’s twitter his change was a reaction to “feedback” he received on his platform. Feedback? I bet. I suspect the “feedback” from his fellow Tories was rather strong! 

Green Tories (and here you can think of: MP Michael Chong; former MP, former Ontario Conservative Party leader and current Brampton Mayor Patrick Brown; and/or Senior Alberta government advisor to Premier Kenney, former Liberal and Conservative leader’s staffer, and former Executive Director of Canadians for Clean Prosperity Mark Cameron) have been pushing these kinds of ideas for a long time with anyone who would listen. These are the people who hope against hope that they can broaden their base by being green. Is Erin believing them? His policies suggest he is.

The “fossil fuel subsidies” that O’Toole originally wanted to end are, for the most part, made up of tax deductions for the oil and gas industries. Deductions for any sector – and by the way all kinds of sectors get them – are about lowering high tax rates in order to keep investment in the country. That investment would go elsewhere but for the deductions.  

Deductions are not subsidies: deductions mean lower taxes. Lower taxes allow businesses to grow, and then pay taxes from their profits. In other words, deductions help grow government tax revenues. In the case of the oil and gas industry, that has meant as much as $14 billion a year in tax revenue (depending on the market price of the commodity). Subsidies, on the other hand, are handouts of those tax revenues.

So rap Erin’s knuckles on that one.

But don’t stop there, because there is more.

Erin also promised to get to “net zero emissions” in the oil and gas industry. There is no timeline to meet this target. And it may be premature to assume he will adopt the current government’s 2050 goal. But it should be remembered that he is one of the many Conservative MPs who – after the U.S. withdrawal from the Paris Accord in 2017 – approved a Liberal motion that committed Canada to the implementation of that agreement. It too had an unattainable target - reducing emissions by 30% below 2005 levels by 2030.

O’Toole’s platform says he will meet Canada’s net zero target, “through the use of technologies like electrification generated from sources such as nuclear and wind and carbon capture”. That sounds a lot like Ontario’s Green Energy Act, Germany’s green surcharge, and the UK’s BSUoS. All of these expensive policies ended up driving out investment, shuttering manufacturing, and, once again, dramatically raising energy costs for customers. 

Canada’s carbon tax - that O’Toole has promised to repeal - is a policy created to meet a target, and it is getting more expensive every year. In his platform, Erin has vague language suggesting another mechanism for “taxing industry” which sounds a lot like a carbon tax of his own. 

Unattainable targets, expensive policies to pay for them, and taxpayers footing the bill.  The pattern keeps repeating itself, and Erin doesn’t seem capable of breaking from it.

Rather than championing Canada's hydrocarbon industry and creating economic growth with our country’s wealth of natural resources, O’Toole’s policies seem most focused on maintaining the what-seems-to-be-required, green-is-god image of so many politicians. In the French leadership debate last week, Candidate Peter MacKay was quick to critique O’Toole for these policies, going so far as to call him “Erin Trudeau.” 

The great green leviathan is alive and well, and green energy is the absolute sovereign. But this thinking does not make sense. It betrays a lack of knowledge about one of our country’s most important industries, about basic economics, and about what hurts Canadians in their homes and businesses. 

Our natural resources are an asset to this country, not a liability. They keep energy affordable, and give us one of the highest standards of living. O’Toole and other political candidates seem determined to remain blind to that fact.