Mr. Speaker, I would like to begin by doing something that is unusual for me in this place, and that is to congratulate the government. I want to congratulate the government for acknowledging that the debate about its carbon tax is a fiscal one and not an environmental question. The Minister of Finance is here today representing the government on this question, and not the Minister of the Environment. That is because the government views the carbon tax not as an environmental policy, but as an opportunity to grow the coffers of governments by taking more money out of the pockets of everyday people.
For hundreds of years, our system of government has been based on the principle of no taxation without representation. Although many confuse this principle as being an American one, it actually has its origins in the Magna Carta of over 800 years ago, in the year 1215. Subjects of the crown said they were not prepared to pay any tariff or levy without their collective approval, through what would become the parliament, that is, a gathering of the common people. Hence, we have the term House of Commons.
The principle flowing from the Magna Carta and the meeting at Runnymede when King John signed it, is that for the crown to have the legal authority to extract a levy, a tax, or a fee from the population, it must have the approval of the population through their assembled members of what we now call and know as being parliament.
However, not only is there no taxation without representation, there is no taxation without information. Unfortunately, the government has provided precious little information about the cost of its carbon tax. Normally, matters of taxation are quite clear to anyone who is prepared to sharpen their pencil or pull out the calculator. Most Canadians do their taxes at the end of the year and they can determine how much they are paying in income tax. On a daily basis, they can take their bill from a night at the movies or at a restaurant and see what they paid in harmonized sales taxes or other consumption taxes.
Carbon taxes are insidious in a very special way. The cost of a carbon tax is embedded deep inside literally thousands of products that Canadians buy every single day. For example, a basket of fruit that is transported by a truck, was also transported by a train, and before that a ship. A carbon tax on all of the fossil fuels necessary to bring that basket of fruit to the grocery store, where a single mother buys it for her children, increases the cost of that fruit. Unfortunately, when that single mother goes to the cash register and pays that bill, she does not know what share of it is going to the government through carbon tax. Therefore, as an elector, as a common person, she cannot ultimately hold the crown accountable for what it is charging her to nourish her children with the vitamin C from that basket of fruit. She can hold the government accountable for the cost of the harmonized sales tax, because when she purchases various goods and services, she can look at the receipt and it will tell her what she paid. If she thinks it is too much, she can tell her local member of Parliament, and if he or she fails to act accordingly, she can vote against that member of Parliament in the forthcoming election.
No such accountability exists with the carbon tax. I endeavoured to create such accountability by filing numerous Order Paper questions and access to information requests, demanding that the government reveal the following information:
Documents such as briefing notes, analyses, projections, and emails regarding the impact of a $50-a-tonne price on carbon or carbon tax on the Canadian economy. Please include any analysis on how a price on carbon will impact the Consumer Price Index, median incomes, low-income household incomes, the poverty rate, the employment rate, and the unemployment rate.
Originally the government responded that it had no such data. It just did not exist. That was its original response to my Order Paper question. However, we later obtained documents showing that the government did in fact have the data. It had been calculated and it was in the possession of the Minister of Finance's department.
The government said secondarily that it was wrong, that it did have the information, but it would not tell us what it said. It released documents that were roughly 70% blacked out. For example, I have here a memo that was written on October 20, the day after the Liberal Party won the October 19 election, which says:
Imposing a price on carbon...either through a tax or a cap-and-trade system, would raise the cost of fossil fuels and energy. These...costs would then cascade through the economy in the form of higher prices, thus leading all firms and consumers to pay more for goods and services with higher carbon content. This would create distributional effects since the share of goods and services with high-carbon content may vary with households' income.
That is a quote from the document.
To simplify the overly complicated terminology here, distributional effects is an economics term for how the tax will shift income between rich and poor households. It would be effects on the gap between rich and poor, the poverty rate, and the income of the middle class.
I go back to quoting from the same document:
This [document] focuses on the potential impact of a carbon price on a households' consumption expenditures across the income distribution. Key findings are: [blacked out].
The key findings are blacked out and none of the information is included.
Now again, this memo advertises that the government will reveal the potential impact of a carbon price on a household's consumption expenditures across the income distribution. That word “distribution” is very important for those of us who are concerned about poverty. Distribution is used as a term by economists to describe how much money the very poor, the poor, the middle class, the affluent, and the rich have in this country. This document would tell us what impact the carbon tax would have on that distribution. How would it affect the very poor, the poor, the middle class, the affluent, and the rich? The House of Commons does not know. The finance minister does. He has this briefing, and, in his possession, that briefing is not blacked out.
Let me tell the House what else the finance minister has. He has a continuation of the backgrounder, which says:
A good predictor of the expected distributional effect of a price on carbon is to look at how the carbon intensity of a typical consumption basket varies across earnings groups.... This intensity is the result of the direct consumption of carbon intensive goods—like gasoline, natural gas and heating oil—and the indirect result from consuming goods with a high carbon [input]....
Let us return to common language, as we are in the House of the common people. Let us start again: “A good predictor of the expected distributional effect of a price on carbon..”. Simply put, how will a carbon tax affect the gap between rich and poor? A look at the carbon intensity of a typical consumption basket varies across earnings groups. What does that mean in plainer language?
It means that people with less money typically rely on things that have lots of carbon inputs in them, more so than do rich households, at least as a share of their income. That is because rich households can afford to spend more on luxuries rather than on basic survival. Poor households, it is proven, spend a third more of their household budget on things that the tax will apply to, like heating their home, turning on the lights, and feeding their families. If people are rich, they still have to do those things, it is just that those expenses represent a much smaller share of their household budget. Therefore, in percentage terms, the rich households are paying much less than the poorer households pay in carbon taxes.
If the members across the way disagree with my analysis, why do they not just remove all of the black ink on these documents and reveal what they say? It stands to reason, given the documented evidence from Statistics Canada, that the data contained here will show that poor families would be disproportionately hammered by this new tax because it is a larger share of their budget that would be taxed. In other words, as a percentage of income, a poor household would actually pay more than a rich household. That is the economic definition of regressive, from a government that tells us every day how progressive it is.
The Liberals also campaigned on transparency. Let us see if they lived up to that promise. In the September 11, 2015 documents, which calculated the impact of a carbon tax. I am going to quote what it says:
In the context of departmental work on the medium-term planning and transition advice on climate change, the memo provides the model based long run economic impacts of various policy scenarios to meet Canada's commitment to reduce greenhouse gas...emissions.
I would continue the sentence, but it is blacked out. It continues:
Environment Canada is in the process of updating their emissions projections and our analysis will be revised once these updated projections are available.
These are supposed to demonstrate what impact the carbon price will have on the emissions of greenhouse gases. Again, all the numbers are blacked out, so we do not even know if this expensive and damaging tax is going to have any successful impact on reducing greenhouse gases, which is the purported purpose of the tax. It goes on:
The estimated economic impacts from [greenhouse gas] mitigation scenarios are based on a computational general equilibrium...model of the world economy. The analysis shows that estimated economic costs (and the resulting carbon price) [will] vary greatly across the chosen mitigation policy.
How high does the tax have to be before it changes people's behaviour to be more conducive to the battle against climate change? Again, we do not know the answer to that question because it too is blacked out. I could go on and on. I have page after page here before me indicating that the government has data that it will not release because it does not want Canadians to know either the effectiveness of its policy or the cost that Canadians will have to bear in order to live under that policy.
I was very optimistic when I saw the finance minister stand in the House of Commons today to speak, that he would reveal the contents of these documents, given that they are housed within his own department and that it is his department that has blacked out those contents. However, no, he did not reveal any of that. Instead, he rambled on about all the spending and programs and government interference that his and the Prime Minister's administration are imposing under the ostensible pretext of battling climate change. If this were really about protecting the environment, then the government would ensure that every extra dollar in so-called carbon pricing that Canadians pay would be returned to them through lower income taxes or lower consumption taxes. The Liberals claim that these are revenue-neutral policies, but how can we possibly know that when they will not reveal what the tax will cost to begin with?
In every province the carbon tax has been imposed, there has been a net increase in government revenue. In other words, taxpayers have less so governments can have more. This is true even in British Columbia, which has the least damaging carbon tax regime. Recently, the Fraser Institute calculated that in British Columbia taxpayers will be net losers by about $500 to $700 as a result of the carbon tax. In other words, even as the government claims that it is reducing income taxes to compensate people for the higher cost of fossil fuel-based products, the taxpayer is actually a loser and the government, of course as is always the case, is the winner. Hence the need for transparency. Hence the need for Canadian taxpayers to have the ability to look at these documents and find out what in fact it will cost them.
Why is it that a carbon tax is so insidious? The answer is that its costs and impact are hidden. They are deeply embedded in literally thousands of products and it is mathematically impossible on a per unit basis to know what we are actually paying because the tax touches a product so many times as it moves through the supply chain. If a child asks his mother for a bicycle and she buys him one, the tires may have petroleum products in them and therefore the tax will have applied to the tires on that bicycle. There may be other plastics in the making of the bicycle. All of those plastics will have paid a carbon tax. The bicycle may have been transported by rail. Of course, our train lines burn fossil fuels to move products from one market to another. That bicycle is taxed as it travels gently along the railroad track.
I know how much the government and members across the way love bicycles. Many of them in municipal government have spent fortunes on bike lanes. We know how much they love bicycles, but that poor little child is now paying through his mother a carbon tax, probably many carbon taxes, just on the acquisition of that little harmless bicycle that he looks forward to riding down bike lanes in downtown Toronto and in downtown Ottawa.
That is the essence of an insidious tax: everything is hidden. Therefore, the reason we need government to be transparent about its own calculations is so that families know what they are paying. I say to my friends who support carbon taxes, surely if they believed this was not a net burden for taxpayers, if they were designing a revenue-neutral tax, surely if that were true, they would be delighted to release this data. In fact, it would be a great political benefit because they could walk up and down the streets and say this tax actually does not cost anything because it is revenue neutral, but the Liberals are hiding something. Why? What is the reason for hiding these costs?
I submit that the reason is the same reason that the provincial Liberals went to such great lengths to hide the costs of their so-called Green Energy Act. About eight years ago, the Government of Ontario passed this monstrosity of a bill that created something called the feed-in tariff, which saw the government pay 90¢ for a kilowatt hour of electricity produced by solar even though the market price of electricity in Ontario was 2.5¢. The idea was that this would save the environment and it was going to create all kinds of green jobs. That is what we were told.
We heard a very similar speech on that subject from the Minister of Finance, that there really would not be any extra costs to Ontarians because the resulting growth in green solar jobs would be so powerful that we would all be so rich that we would not even notice a change in our power bills. Therefore, this policy was rolled out and very few people spoke out against it. In fact, in Ottawa, the only major media personality who caught on to what was happening was the legendary Lowell Green from Ottawa. Mainstream media did not care and did not address it. The average person thought that because the government said that it would not cost any more, it sounded fine to them.
There is no magic trick here. When we pay 90¢ for something that is worth 2.5¢, that cost goes somewhere. Where did it end up? It was on the electricity bills of Ontarians, which have doubled since the passage of the so-called Green Energy Act. The result, according to the Ontario Association of Food Banks, has been that 60,000 people have had to go to a food bank in order to feed themselves because they could not pay their power bills. The Windsor food bank said it literally had people come in with their power bills and say, “If you can pay my food bill, then I can pay my power bill.”
The distributional effects of that, for those on the Liberal side who are so concerned about the gap between the rich and poor, were that some people became very rich. Let us make no mistake. Those insiders who were able to lock in the contracts to receive thousands of per cent's worth of price markups in order to sell wind and solar power to the electrical grid have made an absolute fortune. They, their children, their grandchildren, and their great, great, great, great grandchildren will be able to retire on the money that they have made off of this scam. Who cannot make money when they are selling something worth 2.5¢ for 90¢, with a government regulator that is forcing people to pay those prices? Who could not make money under those circumstances? As long as one has the connections to land the contracts, it is a pretty easy way to make money. That is the way that people get rich, when the government gets big.
In a free market, one gets rich by having the best product. In a government-run economy, one gets rich by having the best lobbyist. If one had a good lobbyist and was prepared to pay that lobbyist $500,000 or $600,000, the return on investment in Ontario was spectacular, because that $500,000 or $600,000 used to buy influence returned hundreds of millions of dollars in contracts to sell overpriced electricity into Ontario's grid.
What did this do for the environment? The Liberals will argue that, yes, people got poor, they ended up in the food banks, the gap between the rich and poor worsened, and that Ontario has the highest poverty rate of any province in Canada, after having had the fourth lowest under Mike Harris, but that they did it for the environment. They will say that all of those devastating economic impacts occurred and people suffered, but that it had to be done for the environment. What is the impact on the environment?
Right now, I am looking at the website of the organization that actually manages Ontario's electricity grid. It is called the IESO. It provides a breakdown of the sources of electricity that power our grid in Ontario. The amount of power we get from solar is 1%, the percentage of the power on our grid in Ontario that comes from wind is 6%, and from biofuels it is 1%, for a combined total of 8%. All of these literally tens of billions of dollars of subsidies mean that less than 8% of Ontario's electricity comes from the sources that were most subsidized. The irony of course is that clean, emissions-free electricity could have been bought from Quebec, which generates it for a couple of cents per kilowatt hour, or Manitoba, or nuclear production could have been expanded, which of course has no greenhouse gas emissions, and they could have paid 2¢, 3¢, 5¢, or 6¢ per kilowatt hour. Instead they paid 90¢.
What is the combined cost of this policy? According to an auditor general report in 2014, Ontarians, in the first eight years of the Green Energy Act, have overpaid for electricity by about $26 billion. The cost going forward for another 30 years is another $137 billion.
I have to say it hurts to say that, because I was part of a government that suffered a serious political controversy over a $90,000 expense claim that was repaid. These guys do not deal in $90,000. They go big. We are talking about hundreds of billions of dollars of wealth transfers, and after $28 billion of subsidies so far for these wealthy, so-called green energy entrepreneurs, we get 8% of our electricity from the sources that are subsidized. It is so much expense for so little benefit. All the more reason to have transparency in how all of these green taxes and green levies are administered on Canadian households, yet we have had nothing in the way of transparency from the government. The Liberals have been secretive and closed. In fact I am curious how many greenhouse gases were emitted to produce the black ink that was required in order to cover up the information about the cost of the carbon tax in these documents that came out through access to information.
If it does not make us laugh, it makes us cry. I have a tomato farmer in my riding, SunTech tomatoes. If we want to talk about a green energy company, it is SunTech tomatoes. It has learned how to make a profit growing tomatoes in Canada in the winter. For a government that talks about innovation, that is innovation. SunTech does not call itself an innovative supercluster, so maybe it does not have all the right terminology to get a grant from the government, but it is very innovative. It does not just talk innovation; it practices it.
I went to visit SunTech tomatoes, the little miracles of Manotick. I encourage all members to go there. They are fantastic tomatoes. However, it is more expensive to buy SunTech tomatoes in Ottawa than it is to buy Mexican tomatoes in Ottawa, even though a Mexican tomato is responsible for emissions of more greenhouse gases. After all, it has to be transported all the way across the continent, but of course Mexico does not pay carbon taxes, so even though eating a Mexican tomato in Ottawa causes more greenhouse gases than eating an Ottawa tomato in Ottawa, it is more expensive, due to Liberal carbon taxes, to eat the Ottawa tomato in Ottawa. Does that make any sense to members?
If already their heads are spinning, they are about to spin some more because I have some more information that will blow members away.
In order to help its plants grow, SunTech tomatoes actually releases CO2 into its greenhouse, because plants feed on CO2. The carbon tax applies to that CO2, even though its not released into the atmosphere. It is consumed by the plant. I have some more news. There is a 3-D printer that is capable of sucking greenhouse gases out of the air and turning it into a solid building product. They are called trees. Sun Tech tomatoes uses the very same technology to make tomatoes. It pulls CO2 right out of the air and turns it into an edible product. It is a 3-D printer.
I am trying to speak in the futuristic language that will get Liberals tingling over there and feeling excited because they want all of these innovative superclusters that will change the world. Here is an idea. If we want innovation, if we want a more dynamic futuristic economy, stop taxing the people who innovate and create that dynamic economy.
The problem with the Liberals is they think nothing good can happen except through them. Therefore, all good must travel through Liberal hands. Now, if a few Liberals get really rich along the way, all the better, but they are incapable of allowing prosperity to occur because of free people using their God-given gifts and talents to create good stuff. The last thing that the Liberal government wants to see is people being independent and producing positive outcomes on their own, because then they would not need the government.
One example in my riding is The WoodSource, which has a beautiful business right on Mitch Owens Road. It is a recycling and innovation business that has been taking down old barns and using the barn board to decorate coffee shops, libraries, and high-end restaurants, literally turning what some people think is trash into treasure. Abandoned barns that were filled with pigeons and mice now adorn the walls of fancy restaurants.
The WoodSource is taking something that was worthless and giving it great worth. It has had investment from a Belgian company. I did not know this, but across Europe there is demand for Canadian barnwood because it has such rich character and such incredible stories of the loggers, farmers, and pioneers who built those barns through post-and-beam. Those barns literally stood for 200 years, and now people want to have them inside their homes and coffee shops.
This business decided it was going to build a bigger shed to employ more people and provide more lumber across the Ottawa Valley. It took six years and $600,000 worth of paperwork to get it approved. Fifty years ago, a shed of exactly the same dimensions was built, and it took one page of paperwork stamped by an engineer for it to be approved. It was approved in one week.
My friends across the way say that is reckless and dangerous. I have news for them: the building is still standing today.
This entrepreneur went to talk to the local Liberal minister responsible for all the paperwork and burden he had borne in order to build this shed. It was $600,000, enough to hire 10 people at $60,000 a year. He said that he had made him do all this paperwork just to build a shed, and it had taken seven years when he could have been creating many jobs. What did the Liberal minister tell him? He told him to talk to his staff, that they could get him a grant to help him pay the cost to his business. He did not want a grant. He earns his own money. He said, “Why don't you just let me keep the money I earned?”
The reality is that if the government did that, then there would be no need for the Liberal minister. He would be unimportant. He would be airbrushed out of the selfie. To have a government that burdens this business, only to then come forward and offer it taxpayers' money as compensation, is part of the egoism of Liberal government that requires politicians be involved in everything.
As an example, the island airport expansion in Toronto is an opportunity to land more flights in downtown Toronto, which means less traffic from Pearson airport and fewer emissions, as people no longer need to be stuck in traffic idling their cars as they travel from a distant airport to a downtown business centre, and of course that would have led Porter Airlines to buy more jets from Bombardier, right?
The government says that the island airport cannot be expanded. It knows this will do damage to Bombardier because Bombardier will lose sales, but there is no reason to worry: it will give Bombardier a taxpayer-funded subsidy to cover the costs of all the damage wrought by the government in the first place.
The logic that leads the Liberals to block this privately funded infrastructure project at the Billy Bishop airport is the same logic that my friends at The WoodSource experienced when they spent over half a million dollars on paperwork to build a shed that only 50 years ago could be built with one page of approval, which is that the government and its cousins at provincial and municipal levels want to be involved in every aspect of human life. They want everything that people do to be approved by government and for people to bear the burden of administration and cost in every enterprise they undertake.
It is as Ronald Reagan said: the Liberal believes that if something moves, tax it, and if it keeps moving, regulate it, and when it finally stops moving, subsidize it. That is the Liberal approach. We see it played over and over again, but these policies are parasitic. They take, but they do not give. They consume, but they do not produce, and eventually the government runs out of other people's money. That is the trajectory on which the government is set right now.
For those reasons, Conservatives oppose the Liberal carbon tax, and I propose the following amendment. I move:
That the motion be amended by adding the following:
in particular, the interest of taking a realistic and achievable approach, as the previous government did, and finding the appropriate balance between protecting the environment and growing the economy in a way that does not increase the overall tax burden on Canadians.