Carbon Tax in Canada

As we all know living in Canada, the Liberal Party of Canada has implemented Carbon Tax to which the Conservative Party of Canada has been causing opposition to the plan. To all those who do not know the political dilemma with regards to the implementation of Carbon Tax, Justin Trudeau the Prime Minister of Canada and the leader of the Liberal Party of Canada had brought forth the Carbon Neutral Tax which was ratified in 2018. Some provinces of Canada such as Quebec had already introduced a Carbon Tax in 2007, which was much before the federal government. However, with the growing popularity of the Conservative Party of Canada across provinces there have been disputes with regards to the implementation of Carbon Tax. The Province of Saskatchewan which has elected the Conservative Party went to court unsuccessfully against the Federal Government this year to opt out of the Carbon Tax.

What is Carbon Tax?

Carbon Tax is basically is a set price for carbon or a carbon fee per say. The carbon fee is charged on greenhouse gas pollution such as burning of fossil fuels. A monetary price is set by the amount of damage that takes place through climate change.  Through this fee levied on businesses, households and industry, a paradigm shift is meant to take place towards renewable technologies. In Canada, the households receive 90% of the revenues raised by carbon taxing through tax refunds and affected sectors such as small businesses and hospitals receive 10% of the revenues.

Alternatives?

There have been alternatives to Carbon Tax such as Cap and Trade program. The Cap and Trade program is less direct like the Carbon Tax and aims to reduce emissions as well. An emission limit or cap is set by the government and the limits decrease every year which forces polluters to buy unused emission quotas from other companies. The market determines the price of quotas and an auction takes place for the buying of the emission quotas. Companies though this system can benefit by moving towards green technologies and selling off their unused emission quotas to polluters. It gives an economic incentive to all the companies to become more environmentally conscious.  However, the issue arises that due to unfair lobbying and loopholes, bigger companies may get a larger emission quota for a lesser price. With regards to Carbon Tax, there is more direct control for governments. Also, it is easier to share the profits amongst the public.

In my opinion, I lean more towards Carbon Tax since it is easier to control. Yes, those heartless industries will increase the price of their goods slightly or fuel prices will increase. For me, paying slightly more to reduce climate change is still a win.

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