Mr. Speaker, I understand I have about five minutes to talk about climate change.
I want to reference page 149 of the budget, wherein the Liberals condense their approach to addressing climate change, with the main argument being, “Pricing carbon emissions will drive Canada’s transition to a stronger, more resilient, low-carbon economy and help Canada address the global climate change challenge.”
When it comes to pricing carbon, we have to consider something called the price elasticity of demand. Basically, what that means is we have to look at whether, if the price of something increases, the demand for that product will drop. Something is considered price inelastic when, even if the price is increased dramatically, the demand for that product might not necessarily drop. Historically, one could make a very good argument that what research is out there shows that oil, and certainly gasoline, is fairly price inelastic in the short term and even in the long term.
I have a question for the government, and I hope it will consider this. When it is looking at carbon pricing as a mechanism to address climate change, especially to address the targets it put in place at the Paris conference, will it look at whether or not the price that it is setting is actually going to have an impact on greenhouse gas emissions?
I read an article in the January 22 edition of The Globe and Mail. I will not have time to quote from it as it is quite lengthy. It talks about how regional differences in our economies can in fact have different strategies on greenhouse gas emission reduction targets.
I would caution the government that there is a large body of research—in fact, I was talking on Twitter the other night with Andrew Leach, an economist who had some involvement with the Alberta government's carbon pricing model—saying that it would likely be close to $100 a tonne that would be required as a price to have any sort of major reduction in greenhouse gas emissions.
My concern is this. I am not advocating for a $100 price on carbon. Actually, what I am trying to say is I am not sure that even if the government puts a carbon tax in place it will have any real reduction in greenhouse emissions, any effect on that, but what it will have an impact on is people's pocketbooks.
If the government is going to put a consumption tax on an inelastic good where there really are not substitute goods right now that would see a demand change over time, and I think that there is a good argument for that, the government should call it what it is. It is a consumption tax. All that a consumption tax on an inelastic good means is more revenue for the government and it does not really incent behaviour over time.
A consumption tax does a few things. It disproportionately affects the poor, especially on an inelastic good, such as oil. It is going to affect low-income people disproportionately. People still have to get around. It is going to affect the cost of public transit. It will affect small businesses disproportionately, because they do not have the same capitalization as larger businesses to be able to overcome the effects of a tax.
Again, it will not likely work. This will not likely see a reduction in greenhouse gas emissions. It will create even more investment uncertainty in different parts of the country, especially in my home province of Alberta, where we are looking at investment certainty as something that we absolutely need. Some of my colleagues here have talked about how this is all based on low commodity prices, the issues that are happening in Alberta. That is not true. For the government to send signals, like new taxes, certainly is very bad timing right now. It is not actually going to do anything. It is going to put a chill on economic growth, because when people have to pay more for a good that they have to buy, they have to make choices on how they are spending their money in other areas. That is true for families, as it is true for businesses. If their tax burden is increasing, they are going to have to figure out how they are going to get money from other places to pay for the things that they need. I think that is going to put a chill on investment and a chill on economic growth.
My advice for my colleagues is simple. If they are going to look at carbon pricing and they are going to look at some of the rhetoric saying that a price on carbon of $140 a tonne is working in Sweden, what does that mean in the context of a regionalized economy in Canada where we do not necessarily have the same economic structures or the same needs from province to province? I ask the Liberals to really consider this so that they do not promise Canadians that they are going to lower greenhouse gas emissions and do not, and worse, make Canadians pay more out of their pockets for something that is essentially a consumption tax.
If the Liberals want to raise taxes, which this does, then let us have a debate about raising consumption taxes, because Canadians would push back very strongly against that. That is a big concern I have with the budget.
I wish I had a lot more time to talk about this very important issue. I wish I had 20 minutes. I wish everyone a very good Thursday evening.